Trade bodies welcome certainty US-EU covered agreement will bring
Trade bodies have welcomed the news that the US intends to sign a covered agreement with the European Union noting that it provides certainty for reinsurers on both sides of the Atlantic.
Though the actual signing date is still being determined, The US Department of the Treasury and the Office of the US Trade Representative have issued a public notice of intent to sign the covered agreement with the European Union.
The covered agreement eliminates collateral and local presence requirements for qualified reinsurers and it meaningfully streamlines group supervision requirements for insurers and reinsurers operating in both jurisdictions.
Without a signed agreement, US companies would have been unable to renew or write new business in the EU without first establishing a local presence in each EU Member State in which they intend to write business.
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 U.S. 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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