U.s. Eu Covered Agreement
On September 22, 2017, the U.S. Treasury, the USTR and the European Union announced that they had formally signed a covered agreement. The agreement obliges states to eliminate reinsurance guarantees within 5 years or risk pre-theft. In return, the EU will not impose local presence requirements on US companies operating in the EU and will actually have to refer to the regulation of US group capital for US companies of companies established in the EU. The agreement between the US and the EU was the result of lengthy negotiations that were notified in advance to the US Congress on 20 November 2015 by the FIO and the USTR. Similarly, the European Council had previously ordered the European Commission to negotiate an agreement with the United States. It is unclear whether the UK will be able to secure a covered deal with the US or the terms of an agreement. The consensus is that a deal is more than likely, but the deal between the UK and the EU could complicate a deal with the US. Historically, the US has been more central than the EU to the development of the London market and there may be a new focus on the US. The UK has a respected regulatory system and will likely guarantee Solvency II equivalence, but closer alignment of UK regulation with the US may be seen as the right way forward. After Brexit, there will be an appetite to grow and expand the business into new markets, which would allow insurers to try to expand their ties. Whatever the outcome and the initial phase of change, there is no indication that the UK cannot adapt and continue to thrive.
Problem: A covered agreement provides for a watch authorization for the U.S. Treasury and the Office of the U.S. Trade Representative (USTR) to address, if necessary, areas where U.S. state insurance laws or regulations deal with non-Americans. Insurers are different from U.S. insurers, such as.B. reinsurance consumer protection warranty requirements. A covered agreement may serve as a basis for the pre-acceptance of State law only if the agreement relates to measures substantially equivalent to those granted to consumers by State law. A covered agreement is an international agreement on the recognition of prudential measures relating to insurance or reinsurance activities and which achieves a level of protection for insurance or reinsurance consumers, which corresponds essentially to the level of protection achieved under public insurance or reinsurance regulation. As regards reinsurance, the covered agreement eliminates guarantees and local presence requirements as conditions for concluding a reinsurance contract. Therefore, it prohibits a public regulatory authority in the US from imposing on an EU supply reinsurer local guarantees or presence requirements that it does not impose on a local US reinsurer as a precondition for a reinsurance agreement and vice versa. Certain financial and contractual conditions must be met, but this should not be a problem for international insurance companies.
Reinsurance. Under certain conditions, the U.S. S.-U.K. The Covered Agreement prevents the United States and the United Kingdom (referred to respectively as « Party ») from requiring a reinsurer established in the other Party to deposit collateral to (i) enter into reinsurance contracts with a cedar company established in The First Party or (ii) the ability of the transferring company to take out accounting credits for such reinsurance; where such a requirement would lead to less favourable treatment of that reinsurer than that of reinsurers who take their registered office or reside in the first part.