US supervisory rules should be treated as equal to Solvency II regardless of a deal on reinsurance collateral, urges Nelson
It would be “unnecessary and irresponsible” for US federal bodies to sign up to a reinsurance covered agreement with the European Union to smoothe the way for full Solvency II equivalence, according to the chief executive of the National Association of Insurance Commissioners (NAIC).
Talks between the US Treasury Department, the US Trade Representative (USTR) and the EU to agree a reduction in collateral requirements for foreign reinsurers in the US could needlessly override state laws protecting US consumers, said Senator Ben Nelson, speaking at the Insurance Risk North America conference in New York on November 4.
At the same time, European regulators should recognise US rules as fully equivalent to Solvency II, which is still an “untested” regime, he said.
The NAIC has opposed the negotiation of a covered agreement between the US and EU on reinsurance collateral, saying its own model law will achieve the same objective.