Finalising bilateral agreement critical for US reinsurers to do business in the EU

The Reinsurance Association of America (RAA) has urged the European Union and the US to finalise the bilateral agreement relating to prudential re/insurance matters.

RAA is particularly concerned that negotiations have not yet concluded in a covered agreement that will benefit companies doing business on a cross-border basis in the EU and the US.

The agreement must be finalised as soon as possible, RAA said, as it is critical to US reinsurers who continue to encounter new challenges doing business in the EU as Solvency II is implemented across the member states.

The introduction of Solvency II in Europe has, in some countries, restricted the access to the global reinsurance capacity. While Solvency II rules aiming to harmonise the regulatory regime in the EU, some countries made it harder for reinsurers of other jurisdictions to underwrite risk after translating EU legislation into local law. Among these countries are Germany, Poland and the Netherlands.

Frank Nutter, president of the RAA, commented: “While we are encouraged that the negotiators continue to narrow the issues, an immediate and successful conclusion is a priority to bring certainty to US companies doing business in the EU.”