US trade groups move to save Covered Agreement
In a letter to Treasury Secretary Steven Mnuchin, four insurance industry trade bodies in the US including the Reinsurance Association of America have reiterated their strong support for the Covered Agreement that was recently negotiated by the US and EU that resolved significant prudential insurance and reinsurance matters.
The move comes after The National Association of Insurance Commissioners (NAIC) asked the Secretary Mnuchin to clarify and potentially renegotiate several aspects of the agreement.
Frank Nutter, president of the Reinsurance Association of America (RAA), said: “We urge Secretary Mnuchin to support and sign the Agreement as negotiated. It is a significant win for U.S. state-based regulators and for US insurers and reinsurers. The Agreement makes US companies competitive in the EU and supports the US argument that that international regulatory bodies must recognize the strength and structure of the US insurance regulatory system.”
The agreement will affirm the US integrated system of insurance regulation, including the state role and approach as the primary regulators of insurance business; allow US reinsurers to conduct business on a cross-border basis throughout the EU from their US operations;
And ensure the EU will not attempt to subject US holding companies (or other US entities) that are “upstream” from their EU entities to Solvency II’s standards.
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