Today , the U.S. Department of Treasury and the Office of the U.S. Trade Representative (USTR) announced the successful completion of negotiations for a covered agreement with the European Union (EU). Under Title V of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Secretary of the Treasury, through the Federal Insurance Office (FIO), and USTR are authorized to jointly negotiate a covered agreement with one or more foreign governments, authorities, or regulatory entities.
“We are pleased the U.S. and EU were able to conclude this Agreement which resolves uncertainty for U.S. insurers and reinsurers,” said U.S. Trade Representative Michael Froman. “This agreement will provide opportunities for U.S. insurers and reinsurers doing business in the EU while continuing to ensure a high standard of protection for U.S. and EU consumers.”
The Dodd-Frank Act requires that Treasury and USTR jointly consult with the House Committee on Financial Services, the House Committee on Ways and Means, the Senate Committee on Banking, Housing, and Urban Affairs, and the Senate Committee on Finance for any covered agreement. Read full press release.
"This is the first exercise of FIO’s authority to enter into any agreement on insurance regulation, and under the agreement FIO can preempt state reinsurance location and collateral requirements if the states do not make modifications to their existing laws that are consistent with the agreement," Jim Sivon, partner at Barnett, Sivon and Natter commented, "and while the agreement addresses reinsurance and group supervision, two issues of importance to underwriters, it will not significant affect bank agencies.
Read full press release.
Read full agreement.
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