U.S. House Financial Services Insurance Subcommittee To Review Impact of US-EU Dialogues on U.S. Insurance Markets Tomorrow, September 28

 

Federal Insurance Office Director Michael McRaith and Tennessee Insurance Commissioner and National Association of Insurance Commissioners Vice President Julie Mix McPeak will be on the witness panel for the U.S. House Financial Services Subcommittee on Housing and Insurance hearing entitled “The Impact of US-EU Dialogues on U.S. Insurance Markets” tomorrow, September 28, 2016, at 2 p.m. (ET).

To view complete meeting information, including a Congressional bulletin on the issue, click here.

The hearing is intended to examine the process by which the U.S. Treasury Department and the Office of the U.S. Trade Representative may enter into a covered agreement under Section 502 of the Dodd Frank Act of 2010. 

In addition, the witnesses have been asked to provide Subcommittee members with a better understanding of the various international regulatory standards being considered by the G-20, the Financial Stability Board, the International Association of Insurance Supervisors and other international supervisory authorities.

Mr. McRaith, who is the former Illinois insurance commissioner, has served as the Federal Insurance Office Director since June 2011.   His duties include: 

(1) consulting with state insurance regulators and coordinating federal involvement in, and policymaking relating to, international insurance matters; 

(2) representing the U.S. in insurance agreement negotiations taking place at the International Association of Insurance Supervisors, the mission of which is to establish “standards, principles, and guidance papers” and provide training for insurance regulators; 

(3) assisting the Secretary of the Treasury and advising the U.S. Trade Representative in negotiating trade agreements; and 

(4) determining whether state insurance laws that treat non-U.S. insurers less favorably than U.S. insurers are pre-empted by international agreements.

Defined as a “written bilateral or multilateral agreement regarding prudential measures with respect to the business of insurance or reinsurance,” a covered agreement with the EU is expected to level the regulatory playing field for U.S.-based insurers and reinsurers operating there, and further confirm that the existing U.S. insurance regulatory system serves the goals of insurance sector oversight, policyholder protection, and national and global financial stability.”

Some U.S.-domiciled insurance companies have expressed concern that measures being considered in these international fora could result in the imposition of a bank-like regulatory regime on U.S. insurers, draconian capital requirements that are ill-suited to the business of insurance, and potentially costly new accounting standards that could make U.S. insurers less competitive and impede their ability to expand and create U.S. jobs.

U.S. and EU representatives met in February 2016 to begin negotiating the covered agreement.  During this initial meeting, both sides agreed to move forward efficiently and expeditiously and affirmed their good faith pursuit of a covered agreement relating to group supervision, exchange of confidential information between supervisory authorities, and reinsurance supervision including collateral.  Additionally, both sides agreed to meaningful stakeholder consultation and engagement throughout the negotiations.  Talks continued in May 2016, at the conclusion of which U.S. and EU representatives expressed commitment to pursuit of an agreement that is expected to improve regulatory and supervisory treatment for insurers and reinsurers operating on both sides of the Atlantic. 

To view their most recent update, which was published this week, click here.

 

 

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