Within the EU, Solvency II allows the European Commission to adopt equivalency rules for third countries with regard to certain areas of prudential regulation. Three elements can be considered equivalent: (1) reinsurance contracts – reinsurance contracts with reinsurers in an equivalent area are treated in the same way as contracts with reinsurers in the European Economic Area (EEA) (i.e. no guarantee or local requirement for presence is imposed); (2) Solvency control – An EEA insurance group may calculate the solvency of a subsidiary of third countries in a legal system equivalent to the calculation methods established by the third country in which the subsidiary of the non-EEA institution resides; and (3) Group control – Insurance groups that are subject to non-EEA prudential supervision in an equivalent territory are exempt from certain global prudential requirements for Solvency II. In the NAIC National Meeting 2019 case, Bermuda, Japan and Switzerland have been recognised as mutual jurisdictions – meaning that reinsurers established in these jurisdictions will effectively be equated with reinsurers headquartered in the EU/Great Britain, once the states have adopted the revised law and the credit model regulation and the credit regulation for reinsurance benefits. In addition, the revised legislation and the nAIC reinsurance model regulation were adopted effective September 1, 2022, and implementation is expected to begin on January 1, 2023. The revised models have been adopted as state accreditation standards on an expedited basis, in order to avoid the state`s pre-emption requirement on public reinsurance guarantees incompatible with EU-UK agreements. Yes, yes. The UK government has agreed with the EU on a transitional period for Brexit from 29 March 2019 to 31 December 2020. The United Kingdom will not be able to count on the agreement after the end of the transition period, unless the United Kingdom acts in overtime, which is unlikely. During the transition period or shortly thereafter, the United Kingdom will have to negotiate an agreement with the United States. If the UK is unable to negotiate an agreement that is due to start on 1 January 2021, the position may fall back to the position before the covered agreement.
At the National Association of Insurance Commissioners (“NAIC”) 2020 National Summer Meeting, a senior regulator of the Missouri Insurance Department stated that as of July 7, 2020, only 11 U.S. jurisdictions had adopted amendments to the Credit for Reinsurance Model Law (#785) and the Credit for Reinsurance Model Regulation (#786) (in the amended version of the Reinsurance Models Credit) in 2019, but 17 states have still assessed NAIC`s positions.