The Transatlantic insurance relationship could receive a boost if a joint proposal from both sides of the pond is applied, says Alberto Corinti.
The CEA believes that the Transatlantic Economic Council (TEC), which was set up after the EU-US Summit of April 2007 and which held its second meeting on 13 May, is an initiative that can pave the way to settling outstanding trade issues between the European Union and the United States.
Most important among those issues for European reinsurers is the longstanding, onerous and unfair requirement that those doing business post 100% collateral in US trust funds irrespective of their financial strength or track record. This requirement is inefficient and ties up large amounts of capital, making it expensive for European reinsurers to do business in the US.
The CEA, as the European insurance and reinsurance federation, has developed a good working relationship with the supervisors and regulators on the other side of the Atlantic on behalf of our members. But until now progress in creating a more level playing field in the area of collateral has been slow.
That is why the CEA is pleased with the clear commitment made after the TEC meeting in May to identify the steps needed to create a true level playing field for EU and US insurance companies in each other’s jurisdiction. We hope that this initiative will give fresh impetus to the search for the regulatory reforms we have long been seeking.
We chose, before the May meeting, to signal our commitment to the TEC by issuing a joint statement with the American Council of Life Insurers. We pledged our support in tackling all issues relating to business between the world’s two largest financial services markets and explaining regulatory developments. The TEC?might also focus on the US Treasury Department’s recently released blueprint for financial services regulation.
The next TEC meeting is in November, by which time we hope that significant progress has been made towards evening out the regulatory landscape for US and European (re)insurers.