No Match Found
In September 2017, the European Commission and the US Department of the Treasury and Office of the Trade Representative signed a formal bilateral agreement on prudential measures regarding (re)insurance (the ‘Agreement’).
The Agreement represents a major step forward in US/EU cooperation on (re)insurance. It holds benefits to EU and US re(insurers) operating across the Atlantic, by offering them enhanced regulatory certainty, while maintaining robust consumer protections.
The key elements of the Agreement include the progressive elimination of collateral requirements common for EU reinsurers active in the US and removal of duplication of group supervision requirements for international groups headed in the US or EU. The Agreement will come into force five years after signing, except for the group supervision elements, which apply provisionally from 7 November 2017. This writeup addresses the group supervision elements only.
What does this mean?
The Agreement provides that US insurers and reinsurers can operate in the EU without the US parent being subject to the group level governance, solvency and capital, and reporting requirements of Solvency II. The group ORSA or equivalent documentation should be shared with the various supervisors of the relevant (re)insurers in the group.
EU group supervision could still be required at the level of the ultimate EEA parent of groups with an ultimate global parent in the US.
Firms should consider the impact of the Agreement on their circumstances and start a dialogue with the regulator where appropriate.