PURPOSE: to conclude, on behalf of the European Union,
the Bilateral Agreement between the European Union and the United
States of America on prudential measures regarding insurance and
reinsurance.
PROPOSED ACT: Council Decision.
ROLE OF THE EUROPEAN PARLIAMENT: Council may adopt the
act only if Parliament has given its consent to the act
BACKGROUND: on 21 April 2015, the Council authorised
the Commission to start negotiations with the United States of
America for the conclusion of an Agreement on insurance and
reinsurance.
The Commission negotiated a Bilateral Agreement with
the US on prudential measures regarding insurance and
reinsurance in the course of 2016.
The conclusion of the Agreement will lead
to:
- enhanced regulatory certainty in the application of insurance and reinsurance
regulatory frameworks for insurers and reinsurers operating in the
European Union and the United States of America;
- improved policy-holders and other consumers'
protection through cooperation
between supervisors on the exchange of information.
It is now necessary to approve this Agreement on
behalf of the European Union.
CONTENT: this proposal for a Council Decision
constitutes the legal instrument for the conclusion of the
Bilateral Agreement between the European Union and the United
States of America on prudential measures regarding insurance
and reinsurance.
The Agreement sets out the conditions for group
supervision in both Parties of their respective insurance and
reinsurance groups:
- reinsurers of one Party operating in the other Party
will not be subjected to any requirement to post collateral or to
establish a branch or subsidiary, if they meet the prudential
conditions laid down in the Agreement;
- insurance groups of one Party operating in the other
Party which meet the conditions will not be subjected to a
requirement to carry out a group solvency calculation for their
worldwide activities nor to other aspects of group supervision for
their worldwide activities.
Supervisors can exercise group supervision on groups
established within the territory of their Party, and can require
information to be provided about worldwide activities which
risk seriously harming policy-holders in their jurisdiction or
threatening financial stability.
The Agreement:
- lays down the prudential conditions to be applied for
the removal of local presence and collateral requirements for
reinsurers regulated and supervised in the other Party;
- contains provisions and, in an annex, a model
memorandum of understanding for the exchange of information
between supervisory authorities in the EU and the US;
- provides for the setting up of a Joint
Committee to discuss the application and implementation of the
Agreement as well as the possibility for the Parties to amend or
terminate the Agreement.
Full application of every Article of the Agreement,
which starts on either the date 60 months following the date of
signature of the Agreement, or the date of entry into force of the
Agreement, whichever is later. Where entry into force of the
Agreement is prior to the date 60 months following signature of the
Agreement, certain parts of the Agreement start to apply on earlier
dates. Certain parts of the Agreement shall apply provisionally
before the entry into force of the Agreement.