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U.S. to Sign Insurance Covered Agreement with EU

The U.S. Treasury Department and the Office of the U.S. Trade Representative announced their intent to sign the covered agreement reached between the United States and the European Union...
July 18, 2017

The U.S. Treasury Department and the Office of the U.S. Trade Representative announced their intent to sign the covered agreement reached between the United States and the European Union (EU). Officials say it would relieve U.S. primary insurers of potentially billions of dollars in Solvency II compliance costs and provide some collateral requirement relief for EU reinsurers operating in the United States.

The agreement’s possible effect on U.S. state-based regulation was a bone of contention as the agreement was being negotiated by Treasury and its Federal Insurance Office (FIO). State insurance regulators have expressed concern that it could potentially undermine state regulation. The National Association of Insurance Commissioners (NAIC) has been critical of the agreement. NAIC President Ted Nickel said in April that the NAIC is worried about efforts by the International Association of Insurance Supervisors (IAIS) to develop an international capital standard that appeared to favor a European framework.  The National Association of Mutual Insurance Companies (NAMIC) “continues to have significant concerns” with the covered agreement, according to Jimi Grande, senior vice president of government affairs for the group.