The United Kingdom The covered contract applies only to reinsurance contracts entered into, amended or renewed on the day or after the date on which a measure that reduces the warranty requirements takes effect in accordance with the United States and the United Kingdom. the covered agreement or covered agreement between the United States and the European Union and only with respect to losses and reserves declared from (i) on the date of the measure or (ii) on the effective date of a new reinsurance, modification or renewal contract. When NAIC held its first meeting since the covered agreement on February 20, 2018, delegates had a lot to say about the covered agreement, but the general consensus was that another covered agreement was not the answer. Delegates were more interested in extending the covered agreement to non-EU countries (due to a currently non-existent accession process), namely NAIC, which extends the lifting of safeguards to all qualified NAIC countries (currently including Bermuda, France, Germany, Ireland, Japan, Switzerland and the United Kingdom). As soon as the covered agreements are fully implemented, they will remove the warranty and local presence requirements for qualified US reinsurers operating in the EU and UK insurance market and remove the requirement for guarantees for qualified EU and UK reinsurers operating in the US insurance market as a condition for their US seedlings. , borrow for reinsurance. If the United States, as stipulated in the agreements, take appropriate steps to establish group capital standards, the covered agreements provide that US insurance groups operating in the EU and the United Kingdom are supervised only by the US insurance authorities in the U.S. insurance supervisory authority and that U.S. insurers in the EU and the United Kingdom are supervised globally only by the U.S. insurance supervisory authorities. EU and the UK.
On 12 December 2018, the Ministry of Finance and the USTR announced their intention to sign a covered agreement with the UK, which would extend the terms, which are almost identical to the EU-covered agreement, to insurers and reinsurers operating in the UK after Brexit. The UK Covered Agreement was signed on 19 December 2018. With respect to reinsurance, the covered contract removes local guarantees and requirements for presence as the terms of a reinsurance contract. Therefore, it prohibits an American regulator, an EU, from accepting to reinsurers either guarantees or local presence requirements that it does not impose on a local US company that accepts the reinsurer as a condition of a reinsurance contract, and vice versa. There are certain financial and contractual conditions that need to be met, but this should not be a problem for international insurance companies. It is difficult to say with certainty whether the Uk will be able to secure a covered agreement with the United States or the terms of an agreement. The consensus is that an agreement is more than likely, but the UK`s agreement with the EU could complicate a deal with the US. Historically, the United States has been more important than the EU for the development of the London market and the Us may be focusing again. The United Kingdom has a recognized regulatory system and will likely provide the equivalence of Solvency II, but the alignment of British regulations with the United States may be wise. After Brexit, there will be an appetite to expand and expand into new markets, so insurers could try to expand their connections.
Whatever the outcome and the first phase of change, there is no indication that the UK cannot adapt and continue to prosper. The covered agreement between the United States and the EU was the result of lengthy negotiations that the FIO and USTR had communicated to the US Congress on 20 November 2015.