US Treasury, USTR Announce Intention To Negotiate Covered Agreement With The European Union

The U.S. Department of the Treasury and the Office of the U.S. Trade Representative (USTR) today announced their intention to begin negotiating a covered agreement with the European Union (EU).  Under the FIO Act, the Secretary of the Treasury, through the Federal Insurance Office (FIO), and USTR are authorized to jointly negotiate a covered agreement with one or more foreign governments, authorities, or regulatory entities. 

In the covered agreement negotiations, Treasury and USTR will seek recognition of certain prudential measures to ensure a more level playing field for U.S. firms.  A covered agreement is an agreement between the United States and one or more foreign governments, authorities or regulatory entities, regarding prudential measures with respect to insurance or reinsurance.  Treasury publicly called for a covered agreement in FIO’s 2013 Report, “How to Modernize and Improve the System of Insurance Regulation in the United States.”  

“Negotiating a covered agreement with the European Union is a critical step toward leveling the playing field for American insurers and reinsurers,” said Michael McRaith, Director of FIO.  “As we begin negotiations with our European counterparts, I look forward to consultation and engagement with Congress, state regulators, and other stakeholders so that we can pursue a covered agreement that provides tangible benefits for the U.S. insurance industry and consumers.”

“We are pleased by today’s announcement and look forward to working with Treasury on this effort,” said Deputy U.S. Trade Representative Robert Holleyman.

Treasury and USTR earlier today sent letters to the House Committee on Financial Services, the House Committee on Ways and Means, the Senate Committee on Banking, Housing, and Urban Affairs, and the Senate Committee on Finance.  The text of the letters is available here.  In addition to ongoing consultation with Congress, Treasury and USTR intend to engage periodically with stakeholders, including state insurance regulators, throughout the covered agreement negotiations.