The U.S. Treasury Secretary Steve Mnuchin and U.S. Trade Representative Robert E. Lighthizer signed last week the covered agreement between the United States and European Union (EU) on Prudential Measures Regarding Insurance and Reinsurance.
The covered agreement, created by the Dodd-Frank Act, sets mutual acknowledgment of prudential supervision in the EU and United States. The Treasury Department said this agreement will make U.S. companies more competitive in domestic and foreign markets. Further, it employs the United States’ state-based system of insurance regulation.
The deal has gained the support of leading insurance associations, including the American Insurance Association (AIA).
“AIA welcomes today’s news and greatly appreciates the hard work from U.S. and EU officials to get us here,” Stef Zielezienski, AIA senior vice president and general counsel, said. “When negotiations began, U.S. insurance and reinsurance groups were facing growing obstacles to their ability to do business in Europe, but this agreement removes those barriers – affirming not only each other’s regulatory systems, but also their commitments to non-discriminatory treatment and open, reciprocal, competitive insurance markets. As both sides now turn to implementation of this important agreement, the industry stands ready to help in any way we can.”
The American Council of Life Insurers (ACLI) also backs the agreement, saying it provides regulatory certainty for insurers and reinsurers.
“ACLI members will benefit from the assurance provided by the covered agreement, allowing them to dedicate resources to protecting the financial security of their customers. Through retirement and insurance products provided by life insurance companies, 75 million American families are better able to plan, save and guarantee their savings for a secure retirement,” ACLI President and CEO Dirk Kempthorne said.
Further, as the covered agreement upholds the U.S. state-based insurance regulatory system, state regulators will play a critical role as the agreement is implemented, he said.