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The US Department of the Treasury and the Office of the US Trade Representative (USTR) have announced they intend to sign a bilateral insurance agreement with the UK, which should provide “regulatory certainty and market continuity” after Britain leaves the European Union (EU).
The US-UK Covered Agreement would maintain prudential measures regarding insurance and reinsurance in both countries. The Treasury and the USTR said the agreement would be consistent with a similar deal made with the EU in 2017.
Malcolm Newman, chairman of the London Market Group’s (LMG) government affairs workstream and managing director EMEA hub SCOR, commented: “The LMG welcomes the news of a new bilateral insurance agreement between the United States and the United Kingdom, which will provide much needed certainty and market continuity for UK firms operating in the US.
“It’s a vindication of London’s position as the world leader in providing specialty insurance and reinsurance, and offers a significant opportunity for the London Market to continue to grow over the coming years, a case that LMG member associations have been making to HM Treasury over the past year.”
The US Treasury said the agreement would make US firms more competitive in domestic and foreign markets, while also making regulations more efficient and effective. The agreement also benefits the US economy and consumers by affirming the US state-based system of insurance regulation and increasing growth opportunities for US insurers.
Britain’s trade commissioner for North America, Antony Phillipson, released a statement from the British embassy in Washington, saying: “I’m very pleased that we’ve been able to preserve the benefits of the EU-US covered agreement for UK firms in the US, the largest insurance market in the world, once the UK has left the EU.”
The Treasury and USTR announcement on December 11 triggered a 90-day notification period, which is required by US Congress before the US-UK Covered Agreement can be signed and made effective.
