At a recent congressional subcommittee hearing, the National Association of Insurance Commissioners’ Ted Nickel voiced his opposition to a covered agreement that he says does not achieve the goal of putting U.S. insurers on equal footing with European counterparts.
The hearing, “Assessing the U.S.-EU Covered Agreement,” was held by the Housing and Insurance subcommittee of the U.S. House Financial Services Committee. The covered agreement – a specific type of international agreement defined by the Dodd-Frank Act – was negotiated jointly by the U.S. Treasury’s Federal Insurance Office (FIO) and the United States Trade Representative (USTR) with foreign authorities.
“The NAIC is very concerned with the disparate treatment some EU jurisdictions are imposing on U.S. insurers, and is committed to working with Congress and the administration to address this important issue,” testified Nickel, the Wisconsin Insurance Commissioner who also serves as NAIC president.
“While a covered agreement is one way to resolve these issues, we oppose this one. We urge Congress and the administration, with the direct involvement of the states, to expeditiously reopen negotiations with the EU to reach an agreement which brings finality to these issues, and better protects U.S. consumers, insurers, and the state regulatory system.”
Nickel said the goals of the process were to gain equivalence for the treatment of U.S. companies operating in the EU and recognition by the EU of the U.S. regulatory system. However, he told the subcommittee, that wasn’t adequately addressed in the agreement.
“State regulators can support an agreement which achieves clear and permanent mutual recognition for our time-tested U.S. insurance regulatory system, includes meaningful state regulator input and transparency in its drafting and execution, and is unambiguous in its terms and finality,” Nickel said. “A renegotiation of the agreement using a better, more transparent process led by an administration that is not in its final days, with the full participation of insurance regulators will lead to a better result for the United States.”