Statement from NAIC
We appreciate outreach from Treasury in advance of announcing initiation of a possible U.S./UK covered agreement, and a commitment to ongoing coordination with state regulators as the process moves forward.
The UK is an important market for U.S. transatlantic insurance activity, and while the UK is currently covered by the existing U.S./EU covered agreement, that will no longer be the case after Brexit. Although we continue to have concerns with the covered agreement mechanism itself, given the unique circumstances, if a final agreement between the U.S. and UK mirrors the terms, commitments, and U.S. policy statement of the existing U.S./EU covered agreement and simply reestablishes or replicates its application to the UK, we do not oppose its use in this instance. We would also stress that nothing in these negotiations should alter the direction or timing of our ongoing credit for reinsurance model law reforms. As the recent devastating hurricanes have demonstrated, the reinsurance sector plays an important role in protecting U.S. policyholders so it is paramount we conclude our work quickly to establish certainty in the rules for reinsurers from around the globe.