As we previously reported in March 2016, the United States initiated discussions with the European Union to enter into a Covered Agreement addressing: (1) the equivalence of the U.S. insurance and reinsurance regulatory regime in the context of the EU’s Solvency II initiative; and (2) credit for reinsurance collateral requirements. The Dodd-Frank Act introduced Covered Agreements as a means for limited federal intrusion into the regulation of the business of insurance and reinsurance by the states.

On May 27, 2016, the United States and the European Union released another joint statement on their continued negotiations for a Covered Agreement. U.S. and EU representatives met in Washington, D.C. on May 24-25 to discuss the future bilateral agreement. Both sides agreed to continue in good faith to pursue an agreement on matters relating to group supervision, exchange of confidential information between supervisory authorities on both sides, and reinsurance supervision. U.S. and EU representatives expressed their commitment to pursuing an agreement that will improve regulatory and supervisory treatment for insurers and reinsurers. Both sides are considering next steps to ensure the advancement of negotiations.