Access to European Union law
<a href="https://eur-lex.europa.eu/content/help/eurlex-content/experimental-features.html" target="_blank">More about the experimental features corner</a>
Choose the experimental features you want to try
EUR-Lex
Access to European Union law

This document is an excerpt from the EUR-Lex website

You are here
Use quotation marks to search for an "exact phrase". Append an asterisk (*) to a search term to find variations of it (transp*, 32019R*). Use a question mark (?) instead of a single character in your search term to find variations of it (ca?e finds case, cane, care).
Search tips
Need more search options? Use the Advanced search

Summaries of EU Legislation

EU-US Agreement on Insurance and Reinsurance

SUMMARY OF:

Bilateral agreement between the EU and the United States on prudential measures regarding insurance and reinsurance

Decision (EU) 2017/1792 — signing, on behalf of the EU, and provisional application of the bilateral agreement between the EU and the United States on prudential measures regarding insurance and reinsurance

Decision (EU) 2018/539 — conclusion of the bilateral agreement between the EU and the United States on prudential measures regarding insurance and reinsurance

WHAT IS THE AIM OF THE AGREEMENT AND THE DECISIONS?

  • The agreement aims to:
    • strengthen regulatory certainty and ensure a level playing field for insurers and reinsurers1 operating in the EU and the United States;
    • improve protection for policyholders and other consumers;
    • promote cooperation and exchange of confidential information between supervisors on both sides of the Atlantic.
  • Council Decision (EU) 2017/1792 approves the EU’s signature to the bilateral agreement. Council Decision (EU) 2018/539 approves the agreement itself.

KEY POINTS

The agreement:

  • eliminates the imposition of any local presence, collateral2 or similar requirements on a company (‘assuming reinsurer’) which is not based in the same jurisdiction as the original insurer (‘ceding insurer’);
  • specifies that to benefit from equal treatment, an assuming reinsurer must comply with certain financial and market conduct conditions, such as
    • having at least €226 million where the ceding insurer is based in the EU or $250 million if they are domiciled in the United States;
    • maintaining a certain solvency ratio;
    • providing documentation to the host country’s authorities when requested; and
    • paying promptly any claims under the insurance agreement;
  • sets out the procedure the host authority must follow if it wishes to impose any conditions because it considers an assuming reinsurer no longer meets all the listed requirements;
  • confirms that supervision of a reinsurance company rests with the authorities in the jurisdiction where the parent is based, although host authorities may become involved in certain circumstances;
  • encourages supervisory authorities in the EU and the United States to exchange information while respecting confidentiality — an annex details how to conduct the exchanges;
  • establishes a joint committee of EU and US representatives to meet regularly and oversee the implementation of the agreement;
  • allows either party, after consulting the other, to terminate the agreement provided certain procedures are followed.

DATE OF ENTRY INTO FORCE

The agreement entered into force on , although it had already applied provisionally since .

BACKGROUND

  • Insurance companies often take out reinsurance to reduce their risk, especially when facing possible major environmental or other disasters. The reinsurer, in exchange for a premium, pays a share of any claims against the original insurer.
  • The EU and the United States are major trading partners in reinsurance services. However, state insurance laws in the United States required non-US reinsurers, except those based in France, Germany, Ireland and the United Kingdom, to post 100% collateral for the risks involved — a significant deterrent for many companies in the EU.
  • EU insurance harmonisation through the Solvency II directive (Directive 2009/138/EC — see summary) opened the way in 2015 for insurance and reinsurance negotiations with the United States. These were completed in January 2017.
  • For more information, see:

KEY TERMS

  1. Reinsurer: a company that provides financial protection to insurance companies.
  2. Collateral: assets such as cash and credit letters.

MAIN DOCUMENTS

Bilateral agreement between the European Union and the United States of America on prudential measures regarding insurance and reinsurance (OJ L 258, , pp. 4-21)

Council Decision (EU) 2017/1792 of on the signing, on behalf of the Union, and provisional application of the bilateral agreement between the European Union and the United States of America on prudential measures regarding insurance and reinsurance (OJ L 258, , pp. 1-2)

Successive amendments to Decision (EU) 2017/1792 have been incorporated into the original text. This consolidated version is of documentary value only.

Council Decision (EU) 2018/539 of on the conclusion of the bilateral agreement between the European Union and the United States of America on prudential measures regarding insurance and reinsurance (OJ L 90, , pp. 36-37)

last update

Top