The US Treasury and US Trade Representative’s office have announced that they intend to sign a new bilateral agreement with the UK that aims to provide regulatory certainty and market continuity for the UK and US (re)insurance markets following the UK’s departure from the European Union in March 2019.
The new US-UK covered agreement will uphold the terms of the US-EU covered agreement, signed in 2017, which outlined prudential measures for (re)insurers operating between the US and EU member states.
The agreement aims to protect insurance and reinsurance policyholders and other consumers while respecting each country’s existing system for supervision and regulation.
It will provide for the exchange of confidential information between US and UK supervisory authorities and make other practical arrangements for cross-border cooperation following Brexit.
In a letter to Congress, secretary of the Treasury Steven Mnuchin and US Trade Representative Robert Lighthizer explained that the agreement would ensure the continued benefits of the US-EU agreement to US (re)insurers operating in the UK or assuming business from UK ceding insurers.
The US Department of the Treasury also claimed that the agreement would provide market stability, make US companies more competitive in domestic and foreign markets, and make regulations more efficient, effective, and appropriately tailored.
Commenting on the news, Dave Matcham, CEO of the International Underwriting Association said: “The IUA warmly welcomes the US Treasury’s announcement that it intends to sign a US-UK covered agreement.”
“This move is the result of close cooperation between regulators on both sides of the Atlantic and provides important certainty for companies as they look to service their clients’ needs post Brexit,” he continued.
“It reflects both the strong trading relationships between the London Market and the US and the international nature of our industry,” he added.
Malcolm Newman, chairman of the London Market Group’s (LMG’s) government affairs workstream, said: “The LMG welcomes the news of a new bilateral insurance agreement between the United States and the United Kingdom, which will provide much needed certainty and market continuity for UK firms operating in the US.
“It is a vindication of London’s position as the world leader in providing specialty insurance and reinsurance and offers a significant opportunity for the London Market to continue to grow over the coming years, a case that LMG member associations have been making to HM Treasury over the past year.”