A public hearing on the reinsurance collateral provisions of a covered agreement between the United States and the European Union (EU) was held this week by the National Association of Insurance Commissioners (NAIC).
The agreement – called the Bilateral Agreement Between the United States of America and the EU on Prudential Measures Regarding Insurance and Reinsurance – eliminates reinsurance collateral requirements for EU reinsurers that meet certain criteria.
The international agreement was signed by the U.S. Department of the Treasury’s Federal Insurance Office (FIO) and the U.S. Trade Representative (USTR) with the EU on Sept. 22, 2017.
The hearing was in response from state insurance regulators, who requested more information to determine the best approach to complying with the covered agreement’s provisions.
“We brought together regulators and interested parties to keep the focus on maintaining the protections insurance consumers expect and deserve,” Julie Mix McPeak, NAIC president and Tennessee Commissioner of Commerce and Insurance, said.
Attendees at the hearing learned how the NAIC and the states can address the challenge of refining the current solvency system. Also discussed was the need to protect the financial interests of policyholders.
“There are a variety of paths states could follow in order to conform with this agreement,” Maria Vullo, superintendent of the New York State Department of Financial Services and NAIC Reinsurance (E) Task Force chair, said. “It is certainly our hope that we will agree to an approach and that all states will take action to preserve their authority in this area.”