The Reinsurance Directive was approved by the European Parliament in June 2005. European Member States have until 10 December 2007 to implement the Directive into their national law. For many countries within the EU the Directive will introduce regulation of the reinsurance industry for the first time. The Directive is an interim measure introducing a minimum level of harmonised prudential supervision of reinsurance across the EU, in advance of a wider directive applying to all insurers – Solvency II.
The Reinsurance Directive is expected to make a significant impact upon the reinsurance market as it will allow for the “passporting” of reinsurance business across the EU and is predicted to persuade the US to alter its rules on collateral requirements for non-US reinsurers. The Directive also allows Member States the option to establish Insurance Special Purpose Vehicles (ISPVs).
The UK has now completed its consultation process and implemented the Directive by making appropriate amendments to the FSA Handbook.
In this publication we examine the current state of reinsurance regulation in the EU, examine the consequences of the Reinsurance Directive and look at the implementation from the perspective of a number of key EU jurisdictions. This publication is written as a general guide only. It is not intended to contain definitive legal advice which should be sought as appropriate in relation to a particular matter.