Washington DC
18 May 2017
Reporter: Becky Butcher
RIMS expresses support towards US-EU covered agreement
The Risk Management Society (RIMS) has written to Steven Mnuchin, secretary of the US Treasury, expressing its support for the recently proposed US-EU covered agreement on reinsurance.

The letter, submitted by RIMS president Nowell Seaman on 11 April, extolled the benefits to RIMS members, including the elimination collateral requirements, resulting in additional capital; the increase of reinsurance capacity; the requirement for the appointment of insurance commissioners for service; and streamlining the dispute process by clarifying jurisdiction and payment of final judgements.

It stated: “Although risk managers are not directly affected by the agreement, they will benefit indirectly via additional capital that would otherwise be tied up in collateral requirements as well as from increased reinsurance capacity.”

“This could have a positive impact on competition and prices for reinsurance. Risk managers would also benefit in the event of disputes with a non-local assuming insurer. By requirements to be eligible for the benefits of the agreement, such insurers must appoint insurance commissioners for service of process, agree to the jurisdiction of US courts, and agree to recognise and pay final judgments of US courts.”

The agreement, which was finalised in January but has yet to be signed, provides a mutual agreement of prudential supervision in the EU and the US, which will eliminate the increasing barriers to US groups operating in Europe.

Under the agreement, EU supervisors will acknowledge and affirm the US insurance regulatory framework, promising to allow US insurers and reinsurers to compete in their markets without the regulations being imposed on them under Solvency II. In exchange, EU insurers and reinsurers will receive fair reciprocal treatment and be able to compete in US markets.

The agreement covers a number of areas of prudential insurance oversight, including reinsurance, group supervision and the exchange of insurance information between supervisors.

According to a joint statement from EU and US representatives, insurers operating in the other market will only be subject to worldwide prudential insurance group oversight by the supervisors in their home jurisdiction.

The RIMS president added: “For risk professionals to support their organisations’ expansion into global markets, it is important that RIMS advocates for regulation that facilitates opportunities for our members’ to effectively achieve their objectives. RIMS is encouraged by the US-EU covered agreement on reinsurance and looks forward to working with the Department of the Treasury to help bring this agreement to fruition.”

More Industry news
The latest news from Captive Insurance Times
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
Arkansas captive tweaks a 'positive step forward', say lawyers
21 July 2017 | Little Rock | Reporter: Becky Butcher
Recent modifications to the captive insurance law in Arkansas are “a positive move forward to support and grow” the industry in the state
Notice 2016-66 missing from Treasury list
20 July 2017 | Washington DC | Reporter: Becky Butcher
Notice 2016-66 is a notable absence from the US Treasury’s Donald Trump-ordered review of tax regulations, despite the Self-Insurance Institute of America (SIIA) asking for its inclusion
North Carolina captive industry sees ‘rapid growth’
19 July 2017 | Raleigh | Reporter: Becky Butcher
The North Carolina captive insurance industry experienced rapid growth in 2016, according to the state’s Department of Insurance
NSU to launch new surety captive
17 July 2017 | Philadelphia | Reporter: Stephanie Palmer
National Surety Underwriters has raised $11.5 million in funding for the capitalisation of a new special-purpose surety reinsurance captive, the National Fidelity Reinsurance Company
Risk Strategies snaps up employee benefits duo
13 July 2017 | Boston | Reporter: Becky Butcher
Risk Strategies Company has welcomed Kate Genovese and Pauline Sobelman to its employee benefits practice group
Severe US weather outbreaks cause £3bn in losses
13 July 2017 | Chicago | Reporter: Becky Butcher
Worldwide economic and insured losses during June were largely driven by several major severe weather outbreaks in the US, according to Aon Benfield’s Impact Forecasting
ILS continues to drive innovation
11 July 2017 | Zurich | Reporter: Becky Butcher
The insurance-linked securities (ILS) market will continue to drive innovation and efficiency in risk financing for the benefit of protecting buyers and investors, according to Christoph Buerer of Twelve Capital