WASHINGTON (Reuters) - The U.S. Treasury and U.S. Trade Representative announced plans on Friday to negotiate a covered agreement on insurance with the European Union, a move it said will "level the regulatory playing field for U.S-based insurers and reinsurers."
Insurers and regulators from the European Union have long expressed frustration at U.S. reinsurance collateral requirements - they not only must comply with EU solvency rules but must also meet additional requirements when underwriting in the United States.
The EU said in April it would push harder to persuade the United States to free up the billions of euros in collateral it requires foreign reinsurers to set aside against policies.
European reinsurers, such as Munich Re (DE:MUVGn) and Hannover Re (DE:HNRGn) of Germany and syndicates on the market run by Lloyd's of London Ltd [LOL.UL], are put at a disadvantage to American rivals by increasing capital costs and making premiums more expensive.
The U.S. Treasury Department said it sent letters to various congressional committees to announce its intentions. The administration will consult with Congress throughout the negotiation process.
The Treasury said it was seeking "certain prudential measures" that would provide "tangible benefits" for U.S. insurers and consumers. It did not provide details on what these measures would be.