BILATERAL AGREEMENT BETWEEN THE UNITED STATES OF

AMERICA AND THE UNITED KINGDOM ON PRUDENTIAL

MEASURES REGARDING INSURANCE AND REINSURANCE

Preamble

The United States of America (United States or U.S.) and the United Kingdom (UK), 

Parties to this Agreement,

Sharing the goal of protecting insurance and reinsurance policyholders and other 

consumers, while respecting each Party’s system for insurance and reinsurance

supervision and regulation;

Affirming that for the United States, prudential measures applicable in the UK, 

together with the requirements and undertakings provided for in this Agreement, 

achieve a level of protection for policyholders and other consumers with respect to 

reinsurance cessions and group supervision consistent with the requirements of the

Federal Insurance Office Act of 2010;

Acknowledging the growing need for co-operation between UK and U.S. 

supervisory authorities including the exchange of confidential information, given the

increased globalisation of insurance and reinsurance markets;

Taking into account that practical arrangements concerning cross-border cooperation 

are essential for supervision of insurers and reinsurers both during times of stability

and during times of crisis;

Taking into account information exchanged on each Party’s regulatory frameworks 

and after careful consideration of these frameworks;

Noting the benefits of enhancing regulatory certainty in the application of insurance

and reinsurance regulatory frameworks for insurers and reinsurers operating in the

territory of each Party;

Acknowledging risk mitigation effects of reinsurance agreements in a cross-border 

context provided applicable prudential conditions are fulfilled and taking into 

account protection of policyholders and other consumers;

Acknowledging that group supervision of insurers and reinsurers enables 

supervisory authorities to form sound judgments of the financial position of these

groups;

Acknowledging the need for a group capital requirement or assessment for insurers 

and reinsurers forming part of a group that operates in the territory of both Parties, 

and that a group capital requirement or assessment at the level of the worldwide

parent undertaking can be based on the approach of the Home Party;
Affirming the importance of specifications for the group capital requirement or 

assessment for group supervision and of, where warranted, the application of 

corrective or preventive or otherwise responsive measures by a supervisory authority

based on that requirement or assessment; and

Encouraging exchange of information between supervisory authorities in order to 

supervise insurers and reinsurers in the interest of policyholders and other 

consumers,

Hereby agree:

ARTICLE 1 

Objectives

This Agreement addresses the following:

(a) the elimination, under specified conditions, of local presence

requirements imposed by a Party or its supervisory authorities on an 

assuming reinsurer which has its head office or is domiciled in the other

Party, as a condition for entering into any reinsurance agreement with a

ceding insurer which has its head office or is domiciled in its territory or

for allowing the ceding insurer to recognise credit for reinsurance or

credit for risk mitigation effects of such reinsurance agreement;

(b) the elimination, under specified conditions, of collateral requirements 

imposed by a Party or its supervisory authorities on an assuming

reinsurer which has its head office or is domiciled in the other Party, as

a condition for entering into any reinsurance agreement with a ceding

insurer which has its head office or is domiciled in its territory or for

allowing the ceding insurer to recognise credit for reinsurance or credit 

for risk mitigation effects of such reinsurance agreement;

(c) the role of the Host and Home supervisory authorities with respect to 

prudential group supervision of an insurance or reinsurance group whose

worldwide parent undertaking is in the Home Party, including, under

specified conditions, (i) the elimination at the level of the worldwide

parent undertaking of Host Party prudential insurance solvency and

capital, governance, and reporting requirements, and (ii) establishing that 

the Home supervisory authority, and not the Host supervisory authority, 

will exercise worldwide prudential insurance group supervision, without 

prejudice to group supervision by the Host Party of the insurance or

reinsurance group at the level of the parent undertaking in its territory;

and
(d) the Parties’ mutual support for the exchange of information between 

supervisory authorities of each Party, and recommended practices for

such exchange.

ARTICLE 2 

Definitions

For the purposes of this Agreement the following definitions shall apply:

(a) “Ceding insurer” means an insurer or reinsurer that is counterparty to an

assuming reinsurer under a reinsurance agreement;

(b) “Collateral” means assets, such as cash and letters of credit, pledged by

the reinsurer for the benefit of the ceding insurer or reinsurer to guarantee

or secure the assuming reinsurer’s liabilities to the ceding insurer arising

from a reinsurance agreement;

(c) “Credit for reinsurance or credit for risk mitigation effects of reinsurance 

agreements” means the right of a ceding insurer under prudential 

regulatory framework to recognise amounts due from assuming

reinsurers relating to paid and unpaid losses on ceded risks as assets or

reductions from liabilities respectively;

(d) “Group” means two or more undertakings, at least one of which is an 

insurance or reinsurance undertaking, where one has control over one or

more insurance or reinsurance undertakings or other non-regulated 

undertaking;

(e) “Group Supervision” means the application of regulatory and prudential 

oversight by a supervisory authority to an insurance or reinsurance group 

for purposes including protecting policyholders and other consumers, 

and promoting financial stability and global engagement;

(f) “Home Party” means the Party in whose territory the worldwide parent 

of the insurance or reinsurance group or undertaking has its head office

or is domiciled;

(g) “Home supervisory authority” means a supervisory authority from the

Home Party;

(h) “Host Party” means the Party in which the insurance or reinsurance

group or undertaking has operations, but is not the territory in which the

worldwide parent undertaking of the insurance or reinsurance group or

undertaking has its head office or is domiciled;
(i) “Host supervisory authority” means a supervisory authority from the

Host Party;

(j) “Insurer” means an undertaking which is authorised or licensed to take

up or engage in the business of direct or primary insurance;

(k) “Parent” means a regulated or unregulated undertaking that directly or

indirectly owns or controls another undertaking;

(l) “Personal Data” means any information relating to an identified or

identifiable natural person;

(m) “Reinsurer” means an undertaking which is authorised or licensed to take

up or engage in the business of reinsurance activities;

(n) “Reinsurance activities” means the activity consisting of accepting risks 

ceded by an insurer or by another reinsurer;

(o) “Reinsurance agreement” means a contract whereby an assuming 

reinsurer has accepted risk ceded by an insurer or reinsurer;

(p) “Supervisory authority” means any insurance and reinsurance supervisor

in the UK or in the United States;

(q) “Undertaking” means any entity engaged in economic activity;

(r) “United Kingdom” or “UK” means the United Kingdom and any 

territory for whose international relations it is responsible and which was 

bound by the Bilateral Agreement Between the United States of America 

and the European Union on Prudential Measures Regarding Insurance 

and Reinsurance on 4 April 2018;

(s) “U.S. State” means any State, commonwealth, territory, or possession of

the United States, the District of Columbia, the Commonwealth of Puerto 

Rico, the Commonwealth of the Northern Mariana Islands, American 

Samoa, Guam, or the United States Virgin Islands;

(t) “Worldwide” means all operations or activities of a group wherever they

occur; and

(u) “Worldwide parent undertaking” means the ultimate parent undertaking

of a group.
ARTICLE 3

Reinsurance

1. Subject to the conditions in paragraph 4, a Party shall not, and shall ensure that 

its supervisory authorities or any other competent authorities do not, as a condition 

to allow an assuming reinsurer which has its head office or is domiciled in the

territory of the other Party (hereunder for the purpose of Article 3, a “Home Party

Assuming Reinsurer”) to enter into a reinsurance agreement with a ceding insurer

which has its head office or is domiciled in its territory (hereunder for the purpose of

Article 3, a “Host Party Ceding Insurer”):

(a) maintain or adopt any requirement to post collateral in connection with 

cessions from a Host Party Ceding Insurer to a Home Party Assuming

Reinsurer and any related reporting requirement attributable to such 

removed collateral, or

(b) maintain or adopt any new requirement with substantially the same

regulatory impact on the Home Party Assuming Reinsurer as collateral 

requirements removed under this Agreement or any reporting

requirement attributable to such removed collateral,

which, in the case of either (a) or (b), results in less favourable treatment of Home

Party Assuming Reinsurers than assuming reinsurers which have their head office or

are domiciled in the territory of the same supervisory authority as a Host Party

Ceding Insurer. This paragraph does not prohibit a Party in whose territory a ceding

insurer has its head office or is domiciled (hereunder for the purpose of Article 3, a

“Host Party”) or its supervisory authorities from applying requirements as a

condition to allow the Home Party Assuming Reinsurers to enter into a reinsurance

agreement with a Host Party Ceding Insurer if the same requirements apply to 

reinsurance agreements between a ceding insurer and an assuming reinsurer which 

have their head office or are domiciled in the territory of the same supervisory

authority.

2. Subject to the conditions in paragraph 4, a Host Party shall not, and shall ensure

that its supervisory authorities or any other competent authorities do not, as a

condition to allow a Host Party Ceding Insurer to take credit for reinsurance or for

risk mitigation effects of reinsurance agreements concluded with a Home Party

Assuming Reinsurer:

(a) maintain or adopt any requirement to post collateral in connection with 

cessions from a Host Party Ceding Insurer to a Home Party Assuming

Reinsurer and any related reporting requirement attributable to such 

removed collateral, or
(b) maintain or adopt any new requirement with substantially the same

regulatory impact on the Home Party Assuming Reinsurer as collateral 

requirements removed under this Agreement or any reporting

requirement attributable to such removed collateral,

which, in the case of either (a) or (b), results in less favourable treatment of Home

Party Assuming Reinsurers than assuming reinsurers which have their head office or

are domiciled in the territory of the same supervisory authority as a Host Party

Ceding Insurer. This paragraph does not prohibit a Host Party or its supervisory

authorities from applying requirements as a condition to allow a Host Party Ceding 

Insurer to take credit for reinsurance or risk mitigation effects of reinsurance

agreements concluded with a Home Party Assuming Reinsurer if the same 

requirements apply to reinsurance agreements between a ceding insurer and an 

assuming reinsurer which have their head office or are domiciled in the territory of

the same supervisory authority.

3. Subject to the conditions in paragraph 4, a Host Party shall not, and shall ensure

that its supervisory authorities or any other competent authorities, as applicable, do

not, as a condition of entering into a reinsurance agreement with a Host Party Ceding 

Insurer or as a condition to allow the Host Party Ceding Insurer to recognise credit 

for such reinsurance or credit for risk mitigation effect of such reinsurance

agreement:

(a) maintain or adopt any requirement for a Home Party Assuming

Reinsurer to have a local presence, or

(b) maintain or adopt any new requirement with substantially the same

regulatory impact on the Home Party Assuming Reinsurer as local 

presence,

which, in the case of either (a) or (b), results in less favourable treatment of a Home

Party Assuming Reinsurer than assuming reinsurers which have their head office or

are domiciled in the territory of the supervisory authority of the Host Party Ceding 

Insurer or which have their head office or are domiciled in the territory of the Host 

Party and are licensed or permitted to operate in the territory of the supervisory

authority of the Host Party Ceding Insurer. For a U.S. State, “permitted to operate”

shall mean, for purposes of this provision, admitted in that State.

4. Paragraphs 1 to 3 apply subject to the following conditions:

(a) the assuming reinsurer has and maintains on an ongoing basis,

(i) at least 226 million Euro, where the ceding insurer has its head 

office in the UK, or 250 million U.S. dollars, where the ceding

insurer is domiciled in the United States, of own funds or capital 

and surplus, calculated according to the methodology of its home

jurisdiction; or
(ii) if the assuming reinsurer is an association including incorporated

and individual unincorporated underwriters:

(A) minimum capital and surplus equivalents (net of liabilities)

or own funds, calculated according to the methodology

applicable in its home jurisdiction, of at least 226 million 

Euro, where the ceding insurer has its head office in the UK, 

or 250 million U.S. dollars, where the ceding insurer is 

domiciled in the United States; and

(B) a central fund containing a balance of at least 226 million 

Euro, where the ceding insurer has its head office in the UK, 

or 250 million U.S. dollars, where the ceding insurer is 

domiciled in the United States;

(b) the assuming reinsurer has and maintains on an ongoing basis:

(i) a solvency ratio of 100 percent SCR under Solvency II or an RBC

of 300 percent Authorized Control Level, as applicable in the

territory in which the assuming reinsurer has its head office or is 

domiciled; or

(ii) if the assuming reinsurer is an association including incorporated

and individual unincorporated underwriters, a solvency ratio of

100 percent SCR under Solvency II or an RBC of 300 percent 

Authorized Control Level, as applicable in the territory in which 

the assuming reinsurer has its head office or is domiciled;

(c) the assuming reinsurer agrees to provide prompt written notice and 

explanation to the supervisory authority in the territory of the ceding

insurer if:

(i) it falls below the minimum capital and surplus or own funds, as 

applicable, specified in subparagraph (a), or the solvency or capital 

ratio, as applicable, specified in subparagraph (b); or

(ii) any regulatory action is taken against it for serious noncompliance 

with applicable law;

(d) the assuming reinsurer provides written confirmation to the Host 

supervisory authority of consent to the jurisdiction of the courts of the

territory in which the ceding insurer has its head office or is domiciled, 

in accordance with applicable requirements of that territory for providing

such consent. Nothing in this Agreement shall limit or in any way alter

the capacity of parties to a reinsurance agreement to agree to alternative

dispute resolution mechanisms;
(e) where applicable for “service of process” purposes, the assuming

reinsurer provides written confirmation to the Host supervisory authority

of consent to the appointment of that supervisory authority as agent for

service of process. The Host supervisory authority may require that such 

consent be provided to it and included in each reinsurance agreement 

under its jurisdiction;

(f) the assuming reinsurer consents in writing to pay all final judgments, 

wherever enforcement is sought, obtained by a ceding insurer, that have

been declared enforceable in the territory where the judgment was 

obtained;

(g) the assuming reinsurer agrees in each reinsurance agreement subject to 

this Agreement that it will provide collateral for 100 percent of the

assuming reinsurer’s liabilities attributable to reinsurance ceded pursuant 

to that agreement if the assuming reinsurer resists enforcement of a final 

judgment that is enforceable under the law of the territory in which it was 

obtained or a properly enforceable arbitration award, whether obtained 

by the ceding insurer or by its resolution estate, if applicable;

(h) the assuming reinsurer or its legal predecessor or successor, where

applicable, provides the following documentation to the Host 

supervisory authority, if requested by that supervisory authority:

(i) with respect to the two years preceding entry into the reinsurance 

agreement and on an annual basis thereafter, its annual audited 

financial statements, in accordance with the applicable law of the

territory of its head office, including the external audit report;

(ii) with respect to the two years preceding entry into the reinsurance 

agreement, solvency and financial condition report or actuarial 

opinion, if filed with the assuming reinsurer’s supervisor;

(iii) prior to entry into the reinsurance agreement and not more than 

semi-annually thereafter, an updated list of all disputed and 

overdue reinsurance claims outstanding for 90 days or more, 

regarding reinsurance assumed from ceding insurers of the

jurisdiction of the ceding insurer; and

(iv) prior to entry into the reinsurance agreement and not more than 

semi-annually thereafter, information regarding the assuming

reinsurer’s assumed reinsurance by ceding company, ceded

reinsurance by the assuming reinsurer, and reinsurance recoverable

on paid and unpaid losses by the assuming reinsurer, to allow for

the evaluation of the criteria set forth in subparagraph (i) of

paragraph 4;
(i) the assuming reinsurer maintains a practice of prompt payment of claims

under reinsurance agreements. The lack of prompt payment will be

evidenced if any of the following criteria is met:

(i) more than 15 percent of the reinsurance recoverables are overdue

and in dispute as reported to the supervisor;

(ii) more than 15 percent of the reinsurer’s ceding insurers or

reinsurers have overdue reinsurance recoverables on paid losses of

90 days or more which are not in dispute and which exceed for

each ceding insurer 90,400 Euro, where the assuming reinsurer has 

its head office in the UK, or 100,000 U.S. dollars, where the

assuming reinsurer is domiciled in the United States; or

(iii) the aggregate amount of reinsurance recoverables on paid losses 

which are not in dispute, but are overdue by 90 days or more, 

exceeds 45,200,000 Euro, where the assuming reinsurer has its 

head office in the UK, or 50,000,000 U.S. dollars, where the

assuming reinsurer is domiciled in the United States;

(j) the assuming reinsurer confirms that it is not presently participating in

any solvent scheme of arrangement, which involves Host Party Ceding 

Insurers, and agrees to notify the ceding insurer and its supervisory

authority and to provide 100 percent collateral to the ceding insurer

consistent with the terms of the scheme should the assuming reinsurer

enter into such an arrangement;

(k) if subject to a legal process of resolution, receivership, or winding-up 

proceedings as applicable, the ceding insurer, or its representative, may

seek and, if determined appropriate by the court in which the resolution, 

receivership, or winding-up proceedings is pending, may obtain an order

requiring that the assuming reinsurer post collateral for all outstanding

ceded liabilities; and

(l) the assuming reinsurer’s Home supervisory authority confirms to the

Host supervisory authority on an annual basis that the assuming

reinsurer complies with subparagraph (b).

5. Nothing in this Agreement precludes an assuming reinsurer from providing to 

supervisory authorities information on a voluntary basis.

6. Each Party shall ensure that, in its capacity as a Host Party, with respect to its 

supervisory authorities, where the Host supervisory authority determines that a

Home Party Assuming Reinsurer no longer satisfies one of the conditions listed in 

paragraph 4, the Host supervisory authority only imposes any of the requirements 

addressed in paragraphs 1 to 3 if that Host supervisory authority follows the

procedure set out in subparagraphs (a) to (c),
(a) prior to imposing any such requirements the Host supervisory authority 

communicates with the assuming reinsurer and, except for exceptional 

circumstances in which a shorter period is necessary for policyholder and 

other consumer protection, provides the assuming reinsurer with 30 days 

from the initial communication to submit a plan to remedy the defect and 

90 days from the initial communication to remedy the defect, and 

informs the Home supervisory authority;

(b) only where, after the expiry of this period of 90 days or less under

exceptional circumstances as set out in (a), the Host supervisory

authority considers that no or insufficient action was taken by the

assuming reinsurer, the Host supervisory authority may impose any of

the requirements as set out in paragraphs 1 to 3; and

(c) the imposition of any of the requirements set out in paragraphs 1 to 3 is 

explained in writing and communicated to the assuming reinsurer

concerned.

7. Subject to applicable law and the terms of this Agreement, nothing in this 

Article shall limit or in any way alter the capacity of parties to a reinsurance

agreement to agree on requirements for collateral or other terms in that reinsurance

agreement.

8. This Agreement shall apply only to reinsurance agreements entered into, 

amended, or renewed on or after the date on which a measure that reduces collateral 

takes effect pursuant to this Article or to Article 3.8 of the Bilateral Agreement 

Between the United States of America and the European Union on Prudential 

Measures Regarding Insurance and Reinsurance, and only with respect to losses 

incurred and reserves reported from and after the later of (i) the date of the measure, 

or (ii) the effective date of such new reinsurance agreement, amendment, or renewal.

Nothing in this Agreement shall limit or in any way alter the capacity of parties to 

any reinsurance agreement to renegotiate such reinsurance agreement.

9. For greater clarity, in the event of termination of this Agreement, nothing in 

this Agreement prevents supervisory authorities, or other competent authorities, from 

requiring the local presence of Home Party assuming reinsurers, or requiring posting

of collateral and related requirements, or compliance with other provisions of

applicable law, with respect to any liabilities under reinsurance agreements described

in this Agreement.

ARTICLE 4

Group Supervision

For the purposes of Articles 9 and 10, the Parties set forth the following practices of

group supervision:
(a) Without prejudice to subparagraphs (c) to (h) and participation in 

supervisory colleges, a Home Party insurance or reinsurance group is 

subject only to worldwide prudential insurance group supervision

including worldwide group governance, solvency and capital, and 

reporting, as applicable, by its Home supervisory authorities, and is not 

subject to group supervision at the level of the worldwide parent 

undertaking of the insurance or reinsurance group by any Host 

supervisory authority.

(b) Notwithstanding subparagraph (a), Host supervisory authorities may

exercise supervision with regard to a Home Party insurance or

reinsurance group as set out in subparagraphs (c) to (h). Host supervisory

authorities may exercise group supervision, where appropriate, with

regard to a Home Party insurance or reinsurance group at the level of the

parent undertaking in its territory. Host supervisory authorities do not

otherwise exercise worldwide group supervision with regard to a Home

Party insurance or reinsurance group, without prejudice to group

supervision of the insurance or reinsurance group at the level of the

parent undertaking in the territory of the Host Party.

(c) Where a worldwide risk management system, as evidenced by the

submission of a worldwide group Own Risk and Solvency Assessment 

(ORSA), is applied to a Home Party insurance or reinsurance group

according to the applicable law, the Home supervisory authority that 

requires the ORSA provides a summary of the worldwide group ORSA:

(i) to the Host supervisory authorities, if they are members of the

insurance or reinsurance group’s supervisory college, without

delay, and;

(ii) to the supervisory authorities of significant subsidiaries or

branches of that group in the Host Party, at the request of those

supervisory authorities.

Where no such worldwide group ORSA is applied to a Home Party insurance or 

reinsurance group, according to applicable law, the relevant U.S. State or UK 

supervisory authority provides equivalent documentation which is prepared

consistent with applicable law of the Home supervisory authority as referred to in 

subparagraphs (i) and (ii) above.

(d) The summary of the worldwide group ORSA, or the equivalent 

documentation as set out in subparagraph (c), includes the following 

elements:

(i) a description of the insurance or reinsurance group’s risk

management framework;
(ii) an assessment of the insurance or reinsurance group’s risk 

exposure; and

(iii) a group assessment of risk capital and a prospective solvency

assessment. 

(e) Notwithstanding subparagraph (a), if the summary of the worldwide

group ORSA, or, where applicable, equivalent documentation as set out 

in subparagraph (c), exposes any serious threat to policyholder protection 

or financial stability in the territory of the Host supervisory authority, 

that Host supervisory authority may impose preventive, corrective, or

otherwise responsive measures with respect to insurers or reinsurers in 

the Host Party.

Prior to imposing such measures, the Host supervisory authority consults the 

insurance or reinsurance group’s relevant Home supervisory authority. The Parties 

encourage supervisory authorities to continue to address prudential insurance group 

supervision matters within supervisory colleges.

(f) Prudential insurance group supervision reporting requirements as set out 

in the applicable law in the territory of the Host Party do not apply at the

level of the worldwide parent undertaking of the insurance or reinsurance

group unless they directly relate to the risk of a serious impact on the

ability of undertakings within the insurance or reinsurance group to pay

claims in the territory of the Host Party.

(g) A Host supervisory authority retains the ability to request and obtain 

information from an insurer or reinsurer pursuing activities in its 

territory, whose worldwide parent undertaking has its head office in the

territory of the Home Party, for purposes of prudential insurance group 

supervision, where such information is deemed necessary by the Host 

supervisory authority to protect against serious harm to policyholders or

serious threat to financial stability or a serious impact on the ability of an 

insurer or reinsurer to pay its claims in the territory of the Host 

supervisory authority. The Host supervisory authority bases such 

information request on prudential supervisory criteria and, whenever

possible, avoids burdensome and duplicative requests. The requesting

supervisory authority informs the supervisory college of such a request.

Notwithstanding subparagraph (a), the failure of an insurer or reinsurer to comply 

with such an information request may result in preventive, corrective or otherwise 

responsive measures being imposed within the Host supervisory authority’s territory.

(h) With regard to a Home Party insurance or reinsurance group with 

operations in the Host Party and that is subject to a group capital 

assessment in the Home Party which fulfils the following conditions:
(i) the group capital assessment includes a worldwide group capital 

calculation capturing risk at the level of the entire group, including

the worldwide parent undertaking of the insurance or reinsurance

group, which may affect the insurance or reinsurance operations 

and activities occurring in the territory of the other Party; and

(ii) the supervisory authority in the territory of the Party where the

group capital assessment as set out in subparagraph (i) above is 

applied has the authority to impose preventive, corrective, or

otherwise responsive measures on the basis of the assessment, 

including requiring, where appropriate, capital measures;

the Host supervisory authority does not impose a group capital assessment or 

requirement at the level of the worldwide parent undertaking of the insurance or 

reinsurance group according to the applicable law in its territory.

Where a Home Party insurer or reinsurer is subject to a group capital requirement in 

the territory of the Home Party, the Host supervisory authority does not impose a

group capital requirement or assessment at the level of the worldwide parent 

undertaking of the insurance or reinsurance group.

(i) Notwithstanding any provision in this Agreement, this Agreement does 

not and is not intended to limit or restrict the ability of UK supervisory

authorities to exercise supervisory or regulatory authority over entities 

or groups that own or control credit institutions in the UK, have banking 

operations in the UK, or whose material financial distress or the nature, 

scope, size, scale, concentration, interconnectedness or mix of activities 

have been determined could pose a threat to the financial stability of the

UK, including through exercise of Directive 2002/87/EC of the European 

Parliament and of the Council of 16 December 2002 on the

supplementary supervision of credit institutions, insurance undertakings 

and investment firms in a financial conglomerate and amending Council 

Directives 73/239/EEC, 79/267/EEC, 92/49/EEC, 92/96/EEC, 93/6/EEC

and 93/22/EEC, and Directives 98/78/EC and 2000/12/EC of the

European Parliament and of the Council, Directive 2013/36/EU of the

European Parliament and of the Council of 26 June 2013 on access to the

activity of credit institutions and the prudential supervision of credit 

institutions and investment firms amending Directive 2002/87/EC and 

repealing Directives 2006/48/EC and 2006/49/EC (CRD IV), Regulation 

(EU) No 575/2013 of the European Parliament and of the Council of 26 

June 2013 on prudential requirements for credit institutions and 

investment firms and amending Regulation (EU) No 648/2012 (CRR), 

Directive 2014/59/EU of the European Parliament and of the Council of

15 May 2014 establishing a framework for the recovery and resolution 

of credit institutions and investment firms and amending Council 

Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 

2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 

2013/36/EU and Regulations (EU) No 1093/2010 and (EU) No
648/2012, of the European Parliament and of the Council, Regulation 

(EU) No 806/2014 of the European Parliament and of the Council of 15 

July 2014 establishing uniform rules and a uniform procedure for the

resolution of credit institutions and certain investment firms in the

framework of a Single Resolution Mechanism and a Single Resolution 

Fund and amending Regulation (EU) No 1093/2010 and Council 

Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific

tasks on the European Central Bank concerning policies relating to the

prudential supervision of credit institutions, or other related laws and 

regulations.

Notwithstanding any provision in this Agreement, this Agreement does 

not and is not intended to limit or restrict the ability of the applicable

U.S. supervisory authority to exercise supervisory or regulatory

authority over entities or groups that own or control depository

institutions in the United States, have banking operations in the United

States, or whose material financial distress or the nature, scope, size, 

scale, concentration, interconnectedness, or mix of activities have been 

determined could pose a threat to the financial stability of the United

States, including through exercise of authority pursuant to the Bank

Holding Company Act (12 U.S.C. § 1841 et seq.), the Home Owners’

Loan Act (12 U.S.C. § 1461 et seq.), the International Banking Act (12 

U.S.C. § 3101 et seq.), the Dodd-Frank Wall Street Reform and

Consumer Protection Act (12 U.S.C. § 5301 et seq.), or other related laws 

or regulations.

ARTICLE 5

Exchange of Information

1. The Parties shall encourage supervisory authorities in their respective

jurisdictions to cooperate in exchanging information pursuant to the practices set 

forth in the Annex. The Parties understand that the use of such practices will enhance

cooperation and information sharing, while respecting a high standard of

confidentiality protection.

2. Nothing in this Agreement addresses requirements that may apply to the

exchange of personal data by supervisory authorities.

ARTICLE 6 

Annex

The Annex to this Agreement shall form an integral part of this Agreement.
ARTICLE 7 

Joint Committee

1. The Parties hereby establish a Joint Committee, composed of representatives 

of the United States and representatives of the UK, which shall provide the Parties 

with a forum for consultation and to exchange information on the administration of

the Agreement and its proper implementation.

2. The Parties shall consult within the Joint Committee regarding this 

Agreement:

(a) upon mutual agreement of the Parties if either Party proposes 

consultation; 

(b) at least once within 180 days after the date of entry into force of this 

Agreement, and once per year thereafter, unless the Parties otherwise

decide;

(c) if a written request for mandatory consultation is made by either Party;

and

(d) if either Party provides written notice of intent to terminate.

3. The Joint Committee may address:

(a) matters related to the implementation of the Agreement;

(b) the effects of the Agreement, in the Parties’ jurisdictions, on insurance

and reinsurance consumers, and the commercial operations of insurers 

and reinsurers;

(c) any amendments to this Agreement proposed by either Party; 

(d) any matter that requires mandatory consultation;

(e) a notice of intent to terminate this Agreement; and

(f) other matters as may be decided by the Parties.

4. The Joint Committee may adopt rules of procedure.

5. The Joint Committee shall be chaired in turn on an annual basis by each of the 

Parties, unless decided otherwise. The Joint Committee may be convened by its Chair

at such time and manner as may be decided by the Parties.

6. The Joint Committee may convene any working group to facilitate its work.
7. The Parties shall consult within the Joint Committee within 90 days after the 

date on which this Agreement enters into force.

ARTICLE 8

Entry into Force

1. This Agreement shall enter into force on the date of the latter notification in an 

exchange of written notifications between the Parties certifying that they have 

completed their respective internal requirements and procedures, or on such other 

date as the Parties shall agree.

2. In submitting a notification or agreeing a date as specified in paragraph 1, the 

United Kingdom shall take account of its obligations arising in respect of 

any agreement between the European Union and the United Kingdom pursuant to 

Article 50 of the Treaty on European Union.

ARTICLE 9

Implementation of the Agreement

1. From the date of entry into force of this Agreement, the Parties shall encourage

relevant authorities to refrain from taking any measures which are inconsistent with 

any of the conditions or obligations of the Agreement, including with respect to the

elimination of collateral and local presence requirements pursuant to Article 3. This 

may include, as appropriate, exchanges of letters between relevant authorities on 

matters pertaining to this Agreement.

2. From the date of entry into force of this Agreement, the Parties shall take all 

measures, as appropriate, to implement and apply this Agreement as soon as possible

in accordance with Article 10.

3. From the date of entry into force of this Agreement, the United States shall 

encourage each U.S. State to promptly adopt the following measures:

(a) the reduction, in each year following 7 November 2017, of the amount 

of collateral required by each State to allow full credit for reinsurance by

20 percent of the collateral that the U.S. State required as of 1 January

2017; and

(b) the implementation of relevant U.S. State credit for reinsurance laws and 

regulations consistent with Article 3, as the method for adopting

measures in conformity with paragraphs 1 and 2 of that Article.
4. Provided that this Agreement has entered into force, on a date no later than the

first day of the month, 42 months after 22 September 2017, the United States shall 

begin evaluating a potential preemption determination under its laws and regulations 

with respect to any U.S. State insurance measure that the United States determines is 

inconsistent with this Agreement and results in less favourable treatment of a UK

insurer or reinsurer than a U.S. insurer or reinsurer domiciled, licensed, or otherwise

admitted in that U.S. State. Provided that this Agreement has entered into force, on

a date no later than the first day of the month 60 months after 22 September 2017, 

the United States shall complete any necessary preemption determination under its 

laws and regulations with respect to any U.S. State insurance measure subject to such 

evaluation. For the purposes of this paragraph, the United States shall prioritise those

States with the highest volume of gross ceded reinsurance for purposes of potential 

preemption determinations.

ARTICLE 10

Application of the Agreement

1. Except as otherwise specified, this Agreement shall apply on the date of the

entry into force, or 60 months from 22 September 2017, whichever is later.

2. Notwithstanding Article 8 and paragraph 1 of this Article:

(a) The UK shall apply Article 4 of this Agreement from the date of entry

into force of this Agreement by ensuring that supervisory authorities and 

other competent authorities follow the practices set forth therein.

The United States shall apply Article 4 of this Agreement from the date

of entry into force of this Agreement by using best efforts and

encouraging supervisory authorities and other competent authorities to 

follow the practices set forth therein.

(b) On the date of entry into force of this Agreement, or 22 September 2022, 

whichever is later:

(i) the obligations of a Party set forth in Article 3, paragraphs 1 and 2

and Article 9 shall be applicable only if, and thereafter for as long

as, the supervisory authorities of the other Party exercise

supervision as set forth in Article 4 and satisfy the obligations set 

forth in Article 3, paragraph 3;

(ii) the practices of a Party set forth in Article 4 and the obligations set 

forth in Article 3, paragraph 3 shall be applicable only if, and 

thereafter for as long as, the supervisory authorities of the other

Party satisfy the obligations set forth in Article 3, paragraphs 1 and 

2; and
(iii) the obligations of a Party set forth in Article 3, paragraph 3 shall 

be applicable only if, and thereafter for as long as, the supervisory

authorities of the other Party exercise supervision as set forth in 

Article 4 and satisfy the obligations set forth as in Article 3, 

paragraphs 1 and 2.

(c) Where under Article 4, subparagraph (i), measures are applied by the

applicable U.S. supervisory authorities outside the territory of the United 

States to a UK insurance or reinsurance group, the distress or activities 

of which the Financial Stability Oversight Council has determined could 

pose a threat to the financial stability of the United States, through 

application of the Dodd-Frank Wall Street Reform and Consumer

Protection Act (12 U.S.C. § 5301 et seq.), either Party may terminate this 

Agreement under an accelerated mandatory consultation and 

termination. Where, under Article 4, subparagraph (i), measures are

applied by a UK supervisory authority outside the territory of the UK to 

a U.S. insurance or reinsurance group, in relation to a threat to the

financial stability of the UK, either Party may terminate this Agreement 

under an accelerated mandatory consultation and termination.

(d) From the date of entry into force of this Agreement until 22 September 

2022 and without prejudice to the mechanisms set forth therein, the

reinsurance provisions of Article 3, paragraphs 1 and 2 shall apply with

respect to a UK reinsurer in a U.S. State on the earlier of:

(i) adoption by such U.S. State of a measure consistent with Article

3, paragraphs 1 and 2; or

(ii) the effective date of any determination by the United States under

its laws and regulations that such U.S. State insurance measure is 

preempted because it is inconsistent with this Agreement and

results in less favourable treatment of a UK insurer or reinsurer

than a U.S. insurer or reinsurer domiciled, licensed, or otherwise

admitted in that U.S. State.

(e) From the date of entry into force of this Agreement until 7 November 

2022, in the application of Article 4, subparagraph (h), supervisory 

authorities in the UK shall not impose a group capital requirement at the

level of the worldwide parent undertaking of the insurance or reinsurance 

group, with regard to a U.S. insurance or reinsurance group with 

operations in the UK.

(f) From the date of entry into force of this Agreement until 22 September 

2022, if a Party does not meet the obligations of Article 3, with respect 

to local presence requirements, the supervisory authorities of the other 

Party may, after mandatory consultation, impose a group capital 

assessment or group capital requirement at the level of the worldwide

parent undertaking on an insurance or reinsurance group which has its 
head office or is domiciled in the other Party.

(g) Article 3, paragraph 3 shall be implemented and applicable in the

territory of the UK no later than 24 months from 22 September 2017

provided that the Agreement has entered into force.

(h) Subject to subparagraphs (b) and (d), Article 3, paragraphs 1 and 2 shall 

be implemented and fully applicable in all of the territory of both Parties 

no later than 60 months from 22 September 2017, provided that the

Agreement has entered into force.

(i) From the date of entry into force of this Agreement, both Parties shall 

apply Articles 7, 11, and 12.

3. Where a Party does not adhere to paragraph 2 by the dates stipulated therein, 

the other Party may seek mandatory consultation through the Joint Committee.

ARTICLE 11

Termination and Mandatory Consultation

1. Following mandatory consultation, either Party may terminate this Agreement 

at any time by giving written notification to the other Party, subject to the procedures 

of this Article. Unless otherwise agreed by the Parties in writing, such termination 

shall be effective in 180 days, or 90 days with respect to termination described in 

Article 10, subparagraph 2(c), after the date of such notification. In particular, the

Parties may terminate this Agreement where either Party has failed to fulfil its 

obligations under this Agreement or has taken measures inconsistent with the 

objectives of this Agreement.

2. Prior to notifying a decision to terminate this Agreement, including with 

respect to the provisions of Article 10, a Party shall notify the Chair of the Joint 

Committee.

3. The Parties shall take the necessary steps to communicate to interested parties 

the effect of termination on insurers and reinsurers in their respective jurisdictions.

4. Mandatory consultation through the Joint Committee shall be required if

requested by either Party to the Chair of the Joint Committee, and shall commence

not later than 30 days, or 7 days if requested as described in Article 10, subparagraph 

2(c), after such request unless the Parties agree otherwise. The Party requesting

mandatory consultation shall provide written notice of the bases for the mandatory

consultation. The mandatory consultation may be hosted at a site determined by the

Parties, and if the Parties cannot agree on a location, then the Party requesting 

mandatory consultation shall propose three neutral sites outside of the territory of

either Party, and the other Party shall select one of the proposed three neutral sites.
5. Mandatory consultation will be required prior to the termination of this 

Agreement, including with respect to the provisions of Article 10.

6. If a Party refuses to participate in a mandatory consultation as provided in this 

Article, then the Party seeking to terminate may proceed to terminate the Agreement

as provided in paragraph 1 of this Article.

ARTICLE 12

Amendment

1. The Parties may agree, in writing, to amend this Agreement.

2. If a Party wishes to amend this Agreement, it shall notify the other Party in 

writing of a request to begin negotiations to amend the Agreement.

3. A request to begin negotiations to amend the Agreement shall be notified to 

the Joint Committee.

ARTICLE 13

References to EU Legislation

References to EU legislation in this Agreement are to be read as references to the EU 

legislation as incorporated, implemented or otherwise transposed into UK domestic 

law as at the date the UK ceases to be bound by the relevant EU legislation.
ANNEX – Model Memorandum of Understanding Provisions on Exchange of

Information between Supervisory Authorities

ARTICLE 1

Objective

1. The Supervisory Authority of (U.S. State) and the national Supervisory

Authority of the UK, the Authorities signing this Memorandum of Understanding, 

recognise the need for co-operation in exchange of information.

2. The Authorities recognise that practical arrangements concerning cross-border 

cooperation and information exchange are essential for both crisis situations and dayto-day supervision.

3. The purpose of this Memorandum of Understanding is to facilitate cooperation 

in the exchange of information between the Authorities to the extent permitted by

Applicable Law and consistent with supervisory and regulatory purposes.

4. The Authorities recognise that nothing in this Memorandum of Understanding

addresses requirements that may apply to the exchange of personal data by

supervisory authorities.

5. Applicable Law on exchange and protection of Confidential Information is in 

place in the territory of the Authorities, with the aim of protecting the confidential 

nature of data exchanged between Authorities under this Memorandum of

Understanding. Amongst other things, this Applicable Law seeks to ensure that:

(a) The exchange of Confidential Information is only for purposes directly

related to the fulfilment of the supervisory functions of the Authorities; 

and

(b) All persons gaining access to such Confidential Information in the course

of their duties will maintain the confidentiality of such information, 

except in certain defined circumstances as set forth in Article 7.

ARTICLE 2

Definitions

1. For the purpose of this Memorandum of Understanding, the following

definitions should apply:
(a) “Applicable Law” means any law, regulation, administrative provision 

or other legal practice applicable in the jurisdiction of an Authority

relevant to insurance and reinsurance supervision, the exchange of

supervisory information, the protection of confidentiality and the

handling and disclosure of information;

(b) “Confidential Information” means any Provided Information regarded

as confidential by the jurisdiction of the Requested Authority;

(c) “Insurer” means an undertaking which is authorised or licensed to take

up or engage in the business of direct or primary insurance;

(d) “Person” means a natural person, legal entity, partnership, or

unincorporated association;

(e) “Personal Data” means any information relating to an identified or

identifiable natural person;

(f) “Provided Information” means any information provided by a Requested

Authority to a Requesting Authority in response to a request for

information; 

(g) “Regulated Entity” means an insurer or reinsurer authorised or

supervised by a Supervisory Authority of the UK or the United States;

(h) “Reinsurer” means an undertaking which is authorised or licensed to take

up or engage in the business of reinsurance activities;

(i) “Requested Authority” means the Authority to whom a request for

information is made;

(j) “Requesting Authority” means the Authority making a request for

information; 

(k) “Supervisory Authority” means any insurance and reinsurance

supervisor in the UK or in the United States; and

(l) “Undertaking” means any entity engaged in economic activity.

ARTICLE 3

Cooperation

1. Subject to Applicable Law, the Requested Authority should consider requests 

from the Requesting Authority seriously and should respond in a timely fashion. It 

should provide the Requesting Authority with the fullest possible response to a

request for information consistent with its regulatory functions.
2. Subject to Applicable Law, the existence and content of any request for

information should be treated as confidential by both the Requested and the

Requesting Authorities, unless both Authorities mutually decide otherwise.

ARTICLE 4

Use of Provided Information

1. The Requesting Authority should only make requests for information if it has 

a legitimate regulatory or supervisory purpose for the request directly relevant to a

Requesting Authority’s lawful supervision of a Regulated Entity. It is generally not 

considered a legitimate regulatory or supervisory purpose for a Requesting Authority

to seek information on individuals, unless the request is directly relevant to the

fulfilment of supervisory functions.

2. The Requesting Authority should use Provided Information only for lawful

purposes related to the Authority’s regulatory, supervisory, financial stability, or

prudential functions.

3. Subject to Applicable Law, any Provided Information exchanged belongs to, 

and will remain the property of, the Requested Authority.

ARTICLE 5

Request for Information

1. Requests for information by the Requesting Authority should be in writing, or

in accordance with paragraph 2 where it is urgent, and include the following 

elements:

(a) the Authorities involved, the field of supervision concerned and the

purpose for which the information is sought;

(b) the name of the person or Regulated Entity concerned;

(c) details of the request which may include a description of the facts 

underlying the request, specific questions under investigation, and an 

indication of any sensitivity about the request;

(d) the information requested;

(e) the date by which the information is requested and any relevant legal 

deadlines; and
(f) if relevant, whether, how, and to whom any of the information may be

passed consistent with Article 7.

2. For urgent requests, a request can be presented orally, and should be followed 

by written confirmation without undue delay.

3. The Requested Authority should handle the request as follows:

(a) The Requested Authority should confirm receipt of the request.

(b) The Requested Authority should assess each request on a case-by-case

basis to determine the fullest extent of information that can be provided 

under the terms of this Memorandum of Understanding and the

procedures applicable in the jurisdiction of the Requested Authority. In 

deciding whether and to what extent to fulfil a request, the Requested 

Authority may take into account:

(i) whether the request conforms with the Memorandum of

Understanding;

(ii) whether compliance with the request would be so burdensome as 

to disrupt the proper performance of the Requested Authority’s 

functions;

(iii) whether it would be otherwise contrary to the essential interest of

the Requested Authority’s jurisdiction to provide the information 

requested; 

(iv) any other matters specified by the Applicable Law of the

Requested Authority’s jurisdiction (in particular those relating to 

confidentiality and professional secrecy, data protection and 

privacy, and procedural fairness); and

(v) whether complying with the request may otherwise be prejudicial 

to the performance by the Requested Authority of its functions.

(c) Where a Requested Authority denies or is unable to provide all or part of

the requested information, the Requested Authority should, to the extent 

practical and appropriate subject to Applicable Law, explain its reasons 

for not providing the information and consider possible alternative ways 

to meet the supervisory objective of the Requesting Authority. A request

for information may, in particular, be denied by the Requested Authority

where the request would require the Requested Authority to act in a

manner that would violate its Applicable Law.
ARTICLE 6

Treatment of Confidential Information

1. As a general rule, any information received under this Memorandum of

Understanding should be treated as Confidential Information except where otherwise

indicated.

2. The Requesting Authority should take all lawful and reasonably practicable

actions to preserve the confidentiality of Confidential Information.

3. Subject to Article 7 and Applicable Law, the Requesting Authority should

restrict access to Confidential Information received from a Requested Authority to 

persons working for the Requesting Authority or acting on its behalf who:

(a) are subject to the Requesting Authority’s obligations in its jurisdiction to 

prevent unauthorized disclosure of Confidential Information;

(b) are under the supervision and control of the Requesting Authority;

(c) have a need for such information that is consistent with, and directly

related to, a lawful regulatory or supervisory purpose; and

(d) are subject to ongoing confidentiality requirements after leaving the

Requesting Authority.

ARTICLE 7

Onward Sharing of Provided Information

1. Except as provided in Article 7(2), a Requesting Authority should not transmit 

to a third party Provided Information received from the Requested Party, unless:

(a) the Requesting Authority has obtained prior written consent from the

Requested Authority for onward sharing of such information unless the

request is urgent, in which case it can be presented orally followed by

written confirmation without delay; and

(b) the third party commits to abide by restrictions which maintain a

substantially similar level of confidentiality as the one to which the

Requesting Authority is subject to as set forth in this Memorandum of

Understanding.
2. Subject to Applicable Law, if the Requesting Authority is subject to a legally

compelled demand for or under a legal obligation to disclose Provided Information, 

the Requesting Authority should provide the Requested Authority with as much 

notice as reasonably practical of such demand and any related proceedings to 

facilitate opportunities to intervene and assert privilege. If the Requested Authority’s 

consent to the production of Provided Information is not given, the Requesting 

Authority should take all reasonable steps where appropriate to resist disclosure, 

including by employing legal means to resist such disclosure and to assert and protect 

the confidentiality of any Confidential Information subject to potential disclosure.