The United States and European Union have come to an agreement to boost this international marketplace.
On Friday, the United States and European Union came to an agreement to shrink legal and capital hurdles to the transatlantic insurance market. The goal was to give a boost to both the insurance and reinsurance marketplaces.
The transatlantic insurance and reinsurance markets are currently worth a combined $3 billion.
This transatlantic insurance market accord is one that has been under negotiation for over a year. It is a follow-up to an agreement that was already established in 2016 on derivatives. Reps from both the United States and the European Union released a joint statement describing the deal that had been reached.
Within the statement, they said this agreement “will ensure ongoing robust insurance consumer protection and provide enhanced regulatory certainty for insurers and reinsurers operating in both the U.S. and the EU.”
The transatlantic insurance market deal will lift several insurer and reinsurer requirements.
Among those requirements is the need for reinsurers to maintain greater capital against risks if they operate from the opposite side of the ocean. This completely removes one significant barrier for expanding internationally.
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Insurance companies will also be able to take advantage of reduced supervisory requirements. This component was worked into the agreement in order to decrease costs. According to Valdis Dombrovskis, EU financial services commissioner, “This is a major deal that is set to benefit insurers, reinsurers and policy holders on both sides of the Atlantic.”
This new agreement also lays a path for European insurance companies to be able to boost their American market share. Simultaneously, it makes it easier for American insurers to sell insurance policies within the 28 countries making up the European Union.
The agreement still requires approval from both U.S. Congress and European Parliament. Two high-level U.S. Democrats on congressional committees released a statement with their intention to review the deal to ensure that its outcome will be improved treatment of American insurers.
In a statement about the transatlantic insurance market deal, Representative Richard Neal (D-Massachusetts) said “I look forward to closely studying the agreement and consulting with stakeholders to ensure that the agreement successfully addresses EU discrimination against the U.S. insurance and reinsurance industries.”