The International Underwriting Association has welcomed a move to open talks between the EU and US on reinsurance.
A mandate has been issued by the Council of the EU authorising the negotiation of an agreement to improve trading conditions and streamline supervision procedures.
Dave Matcham, Chief Executive of the IUA, said: “This is an important step forward. A covered agreement on reinsurance between Europe and the US could be used to help eliminate rules requiring foreign firms to post collateral against American liabilities. This would reduce industry costs and provide clients with greater choice.
“The IUA has long argued for such a solution which became legislatively possible after the passing of the Dodd-Frank Act and it now appears to have momentum with authorities on both sides of the Atlantic.
“Virtually all mature insurance markets now operate with such regulations for foreign companies. A sliding scale of collateral requirements implemented in 2011 has already demonstrated that the US can operate with reduced collateral without any collection problems and that it is possible to rely on the regulatory systems of other countries.
“A covered agreement would make trading reinsurance significantly simpler and much better co-ordinated.”
The EU Commission will negotiate on behalf of the EU in consultation with a Council committee. Any agreement will be concluded by the Council with the consent of the European Parliament.
About the IUA
The International Underwriting Association of London (IUA) represents international and wholesale insurance and reinsurance companies operating in or through London. It exists to promote and enhance the business environment for its members.
The IUA’s London Company Market Statistics Report shows that premium income for the company market in 2013 was £17.445bn with a further £6.831bn controlled by London but written elsewhere. These results are based on a comprehensive survey of 57 companies and combined give an overall intellectual and economic premium total of £24.276bn for the London company market.