The US Department of the Treasury and the Office of the US Trade Representative have issued a public noticed of intent to sign the covered agreement with the European Union, and officials from the Trump administration are expected to sign in the coming weeks.
The covered agreement eliminates collateral and local presence requirements for qualified reinsurers and aims to streamline group supervision requirements for insurers and reinsurers operating in both jurisdictions.
The Treasury believes this singing is an important step in making US companies more competitive in domestic and foreign markets, along with making regulations more efficient and effective.
"The Bilateral Agreement benefits the US economy and consumers by affirming America's state-based system of insurance regulation, providing regulatory certainty, and increasing growth opportunities for US insurers," Treasury said in a statement.
Various trade bodies have welcomed the news that the US intends to sign the covered agreement, noting that it provides greater certainty for reinsurers on both sides of the Atlantic.
Tracey Laws, senior vice president and general counsel of the Reinsurance Association of America, said: “The reinsurance industry applauds this Agreement as it provides regulatory certainty for US and EU companies conducting business in both jurisdictions.”
Frank Nutter, president of the Reinsurance Association of America, said: "We thank the many individuals in the federal and state government who worked tirelessly during the past two years to advance this important initiative. The covered agreement enhances the ability of US companies to do business in the EU. The US and European Union are establishing a model of regulatory cooperation that other jurisdictions should follow.”
Dave Matcham, chief executive of the International Underwriting Association, said: "I am delighted that 20 years of supporting the case for mutual recognition between regulatory authorities is being recognised at the most senior levels of government on both sides of the Atlantic. This is great news for both the EU and the London Market. It sets an important precedent and makes it much easier for the UK to conclude its own covered agreement with the US post-Brexit. The deal also includes certain provisions which could be used as a template for further free trade agreements with other countries."
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US Department of the Treasury, Office of the US Trade Representative, Donald Trump, European Union, North America