On 14 March 2024, the European Commission decided to extend the provisional equivalence decision regarding the insurance and reinsurance solvency regime in force in the US. The regime applicable to insurance and reinsurance undertakings with head offices in the US is to be considered provisionally equivalent to the solvency rules related to the valuation of assets and liabilities, technical provisions, own funds, SCR, MCR and investment rules as laid down in Solvency II (SII). “EU insurance groups will be able to calculate capital requirements for their operations in the US on the basis of local rules. By eliminating the need to reconcile with EU rules, European groups can continue to operate on an equal footing with their American counterparts, and to benefit from alleviated administrative burden and reduced costs”, thus the Commission. Continue reading…

The Swiss Confederation and the United Kingdom of Great Britain and Northern Ireland signed an agreement on mutual recognition in financial services, also called the Berne Financial Services Agreement, on 21 December 2023. It has several sectoral annexes, each dealing with the details for a particular financial sector. Annex 4 deals with insurance. The purpose of the Agreement, the mutual recognition, is reiterated in the annex: “Covered Financial Services Suppliers are permitted to provide Covered Services to Covered Clients from the territory of one Party into the territory of the other Party, as set out and specified in the Sectoral Annexes”. The covered services for both Parties in the insurance field are not entirely the same. Continue reading…

After more than 2 years of negotiating, just a few days before Christmas, on 21 December 2023, Karin Keller-Sutter, the head of the Swiss Federal Department of Finance, and Jeremy Hunt, the UK Chancellor of the Exchequer, signed the Agreement between the Swiss Confederation and the United Kingdom of Great Britain and Northern Ireland on Mutual Recognition in Financial Services, also called the Berne Financial Services Agreement. According to both parties, the Agreement is unique in the world in the area of financial services in terms of scope – encompassing a broad range of financial services sectors – and also in terms of approach: a two-way, and not a one-way, equivalence recognition. It sends a strong signal for open and resilient financial markets, according to the Parties. The Agreement was borne out of a desire of both countries to establish a framework for mutual recognition of each other’s regulatory and supervisory frameworks applicable to certain financial services, while taking account of their respective constitutional, legal and regulatory systems. Parties want to achieve this (1) through the removal of obstacles to the provision of financial services and the reduction of regulatory frictions for cross-border activity, based on and safeguarded by mutual recognition as well as (2) close regulatory and supervisory cooperation. Continue reading…

The Economic and Monetary Affairs Committee of the European Parliament agreed on 18 July 2023 the Ferber reports on the Solvency II review. The Ferber reports took nearly two years of gestation, but were finally adopted, with a larger majority for the Solvency II amendments than for the proposal for an Insurance Recovery and Resolution directive (IRRD). The report on the Solvency II amendments was adopted with 55 in favour, 3 against and 1 abstention, the report on IRRD was adopted with 44 in favour, 7 against and 8 abstentions. The reports are now tabled in the next European Parliament’s plenary for announcement on the ECON vote and on the mandate to enter into interinstitutional negotiations.  Thereafter, the Spanish presidency, the Commission and the European Parliament can start the trilogue. Will this go smoothly? It depends. Continue reading…