07 Feb United States and European Union Reach Insurance Regulation Agreement
On January 13th, the United States and European Union officially reached an agreement regarding insurance and reinsurance regulations. Since announcing their negotiations in November of 2015, talks between U.S. and EU representatives have settled on a covered agreement regarding their prudential measures regarding insurance.
According to reports, this new agreement will cover three areas regarding insurance: reinsurance, group supervision, and the exchange of insurance information between regulators. That includes lifting requirements for insurers to hold more capital against risks, which is expected to lower costs in the market. In addition, Reuters emphasizes that the move plans to encourage an increased market share for EU companies as the United States can more easily share policies across the Trans-Atlantic barriers.
However, while the agreement is indeed noteworthy, some organizations remain skeptical over the announcement. Insurance Journal reported statements from the National Association of Mutual Insurance Companies (NAMIC) and the National Association of Insurance Commissions (NAIC) that express doubt about the proposals. NAMIC refers to the agreement as “a proposed solution to an invented problem,” noting that some provisions appeared temporary. Meanwhile, NAIC fears the negotiation would limit customer protection by forcing foreign regulations onto U.S. companies. Nevertheless, U.S. and EU representatives pushed forth this agreement after several talks occurring in February, July, May, and September of the previous year.
Still, while an agreement has been made, it is up to the European Parliament and the U.S. Congress to ultimately approve of the deal. In the meantime, these representatives will observe any impact the agreement could have on companies as well as customers regarding new regulations.