Constructive discussions between the US and Europe are contributing to arriving at a clear understanding of the solvency regulations, says Frank Nutter.
In 2012, a formal dialogue was initiated between insurance commissioners from the US (the National Association of Insurance Commissioners—NAIC) and the EU (the European Insurance and Occupational Pensions Authority—EIOPA) together with the new US Federal Insurance Office (FIO) and the European Commission.
The dialogue was initiated to improve the understanding of each system of insurance regulation and explore the possibility of some form of recognition between the two systems. The over-arching goal has been to improve regulation of internationally active insurers and facilitate cross-border transactions. Believing the EU should already recognise its unique system of regulation, US insurance regulators did not submit to an equivalence process under the EU Solvency II regime.
EIOPA and the EU Commission have proceeded to assess Switzerland, Bermuda and Japan for full equivalence and nine other jurisdictions for temporary equivalence. The EU Commission is scheduled to make these equivalence determinations in early 2015. The potential for mutual recognition between the US and the EU in a similar time frame, however, is still uncertain.
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Frank Nutter, Reinsurance Association of America