The president of the National Association of Insurance Commissioners (NAIC), Ted Nickel, has voiced his disappointment about the lack of involvement of state regulators in the negotiations of the Covered Agreement between the US Treasury and the European Union (EU) now that the negotiations have concluded.
State insurance regulators and attorneys from the NAIC are now reviewing the agreement between the US federal government and the EU with intention to ensure consumers remain protected and US companies are not competitively disadvantaged relative to foreign insurers.
"After more than a year of secret meetings it’s disappointing that in the waning days of the administration we are finally seeing the details of what purports to be a covered agreement between the US and EU," said Nickel.
Filed on January 13, the deal was negotiated between the European Commission and the Federal Insurance Office, a US body created by the 2010 Dodd-Frank Act.
The bilateral agreement aims to enhance consumer protection and lead to the elimination of collateral and local presence requirements for EU and US reinsurers operating in these markets.
By contrast, The American Council of Life Insurers (ACLI), the American Insurance Association (AIA), and the Reinsurance Association of America (RAA) issued a joint statement in response to the conclusion of the negotiations in which they applauded the agreement.
The statement said: “We welcome the successful conclusion of covered agreement negotiations between the United States and European Union. This agreement, which was reached on January 13, seeks to resolve significant insurance and reinsurance regulatory issues for companies doing business in both jurisdictions. We have long supported the covered agreement process and look forward to reviewing the details."
Nickel, who is also Insurance Commissioner for the state of Wisconsin, continued: "As most state regulators were not allowed to participate in the process, the NAIC is coordinating a thorough review of the agreement to ensure consumer protections are not compromised through the preemption of state law, and we encourage Congress to do the same.
“Of great concern is the potential to use this agreement as a backdoor to force foreign regulations on US companies."
The NAIC has said that it will continue to support its members in determining if the agreement meets the threshold of a covered agreement under law and what potential impact the agreement may have on US consumers and companies.
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NAIC, Ted Nickel, North America, European Union, Covered Agreement