After more than 20 years of discussions and one year of formal negotiations, the European Union and the United States on Friday 22 September signed the transatlantic agreement on the insurance and reinsurance sectors.
This is a major step forward that will offer increased regulatory security whilst maintaining solid consumer protection, the European and American authorities state in a joint press release.
Under this agreement – the signing of which was authorised by the Council of the EU at the end of May (see EUROPE 11797) – American and European insurance companies operating on the other market will only be subject to the supervision of the supervisory authorities of their parent jurisdiction, meaning that the American authorities will retain primacy for the supervision of their insurance companies, and vice versa.
Furthermore, EU reinsurance companies active in the US will no longer have to constitute guarantees to back up their reinsurance contracts with American insurers and they will no longer be required to have a local presence.
With nearly $40 billion in funds mobilised by European reinsurers to provide reinsurance guarantees in the United States, the Commission puts the opportunity cost of these measures at nearly $400 million a year.
Although the agreement of the European Parliament and Council is required for the agreement to enter into force, a number of provisions may already be applied provisionally. (Original version in French by Marion Fontana)