The European Council has approved a covered agreement between the European Union (EU) and the US on insurance and reinsurance matters, which is set to enhance regulatory certainty in transatlantic (re)insurance operations.

The decision was adopted at a recent meeting of the Competitiveness Council, and provides for provisional application of certain provisions within the new (re)insurance agreement, dependent on the completion of procedures needed for its conclusion, says the Council.

The covered agreement between the EU and the US has been under negotiation for some time, and looks to provide legal certainty for insurers and reinsurers on both sides of the Atlantic in the application of regulatory frameworks.

Furthermore, the Council explains that the agreement provides policyholders and other consumers with greater protection via improved cooperation between both supervisors and the exchange of information.

The Council explains that a joint committee will oversee the implementation of the agreement, once finalised, and that the Council also requested the consent of the European Parliament for conclusion of the agreement.

Earlier this year the National Association of Insurance Commissioners (NAIC) called for more work to be done on the proposed covered agreement amidst areas of uncertainty and ambiguity.