U.S. to Negotiate Insurance Agreement with the European Union
The United States Department of the Treasury and the Office of the U.S. Trade Representative (USTR) have announced their intention to begin negotiating a covered agreement regarding insurance with the European Union.
A covered agreement between the U.S. and one or more foreign governments relates to insurance or reinsurance prudential measures. Treasury publicly called for a covered agreement in a 2013 report from the Federal Insurance Office (FIO), a Treasury agency.
“Negotiating a covered agreement with the European Union is a critical step toward leveling the playing field for American insurers and reinsurers,” said Michael McRaith, Director of FIO. “As we begin negotiations with our European counterparts, I look forward to consultation and engagement with Congress, state regulators, and other stakeholders so that we can pursue a covered agreement that provides tangible benefits for the U.S. insurance industry and consumers.”
Insurance premiums paid for life, health, property and casualty insurance sectors totaled more than $1.1 trillion in 2012, representing seven percent of the U.S. gross domestic product. As of the year of 2012, insurers help $7.3 trillion in total assets of which $6.8 trillion were invested assets.
Treasury and USTR earlier sent letters to 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. In addition to ongoing consultation with Congress, Treasury and USTR intend to engage periodically with stakeholders, including state insurance regulators, throughout the covered agreement negotiations.
The 2013 FIO report recommended that Treasury and the USTR “pursue a covered agreement for reinsurance collateral requirements based on” a model law developed by the National Association of Insurance Commissioners in order “to afford nationally uniform treatment of reinsurers.”