The Honorable J eb Hensarling 

Chairman 

Committee on Financial Services 

U.S. House of Representatives 

Washington, DC 20515 

Dear Chairman Hensarling: 

January 13, 2017 

We write to inform you that we have negotiated a covered agreement with the European Union 

(EU) on behalf of the United States. The covered agreement will affirm our U.S. system of 

insurance supervision, protect insurance consumers, and provide meaningful benefits for U.S. 

insurers and reinsurers. The covered agreement addresses three areas of prudential insurance 

superv1s1on: group supervision, reinsurance, and exchange of information between supervisory 

authorities. 

Pursuant to 31 U.S.C. §314, the Federal Insurance Office (FIO) Act of2010 authorizes the 

Secretary of the Treasury (Treasury) and the United States Trade Representative (USTR) jointly 

to negotiate a covered agreement with one or more foreign governments, authorities, or 

regulatory entities. A covered agreement is a "written bilateral or multilateral agreement 

regarding prudential measures with respect to the business of insurance or reinsurance." 

On November 20, 2015, Treasury and USTR notified Congress that FIO and USTR would begin 

joint negotiations with the EU. These negotiations began in February 2016 and concluded in 

January 2017. The EU and the United States have agreed in writing that the attached text of the 

covered agreement is the final legal text negotiated between the United States and the EU. 

We are therefore pleased to inform you that we have concluded negotiations and, pursuant to the 

provisions of the FIO Act of 2010, are providing you the final legal text of the agreement. 

Jacob J. Lew 

Secretary of the Treasury 

Sincerely, 

Michael B. G. Froman 

U.S. Trade Representative 
Identical Letter sent to: 

The Honorable Maxine Waters 

The Honorable Kevin Brady 

The Honorable Richard E. Neal 

The Honorable Orrin Hatch 

The Honorable Ron Wyden 

The Honorable Mike Crapo 

The Honorable Sherrod Brown 
The Honorable Maxine Waters 

Ranking Member 

Committee on Financial Services 

U.S. House of Representatives 

Washington, DC 20515 

Dear Representative Waters: 

January 13, 2017 

We write to inform you that we have negotiated a covered agreement with the European Union 

(EU) on behalf of the United States. The covered agreement will affirm our U.S. system of 

insurance supervision, protect insurance consumers, and provide meaningful benefits for U.S. 

insurers and reinsurers. The covered agreement addresses three areas of prudential insurance 

superv1s10n: group supervision, reinsurance, and exchange of information between supervisory 

authorities. 

Pursuant to 31 U.S.C. §314, the Federal Insurance Office (FIO) Act of2010 authorizes the 

Secretary of the Treasury (Treasury) and the United States Trade Representative (USTR) jointly 

to negotiate a covered agreement with one or more foreign governments, authorities, or 

regulatory entities. A covered agreement is a "written bilateral or multilateral agreement 

regarding prudential measures with respect to the business of insurance or reinsurance." 

On November 20, 2015, Treasury and USTR notified Congress that FIO and USTR would begin 

joint negotiations with the EU. These negotiations began in February 2016 and concluded in 

January 2017. The EU and the United States have agreed in writing that the attached text of the 

covered agreement is the final legal text negotiated between the United States and the EU. 

We are therefore pleased to inform you that we have concluded negotiations and, pursuant to the 

provisions of the FIO Act of 2010, are providing you the final legal text of the agreement. 

Jacob J. Lew 

Secretary of the Treasury 

Sincerely, 

Michael B. G. Froman 

U.S. Trade Representative 
Identical Letter sent to: 

The Honorable J eb Hensarling 

The Honorable Kevin Brady 

The Honorable Richard E. Neal 

The Honorable Orrin Hatch 

The Honorable Ron Wyden 

The Honorable Mike Crapo 

The Honorable Sherrod Brown 
The Honorable Kevin Brady 

Chairman 

Committee on Ways and Means 

U.S. House of Representatives 

Washington, DC 20515 

Dear Chairman Brady: 

January 13, 2017 

We write to inform you that we have negotiated a covered agreement with the European Union 

(EU) on behalf of the United States. The covered agreement will affirm our U.S. system of 

insurance supervision, protect insurance consumers, and provide meaningful benefits for U.S. 

insurers and reinsurers. The covered agreement addresses three areas of prudential insurance 

superv1s1on: group supervision, reinsurance, and exchange of information between supervisory 

authorities. 

Pursuant to 31 U.S.C. §314, the Federal Insurance Office (FIO) Act of2010 authorizes the 

Secretary of the Treasury (Treasury) and the United States Trade Representative (USTR) jointly 

to negotiate a covered agreement with one or more foreign governments, authorities, or 

regulatory entities. A covered agreement is a "written bilateral or multilateral agreement 

regarding prudential measures with respect to the business of insurance or reinsurance." 

On November 20, 2015, Treasury and USTR notified Congress that FIO and USTR would begin 

joint negotiations with the EU. These negotiations began in February 2016 and concluded in 

January 2017. The EU and the United States have agreed in writing that the attached text of the 

covered agreement is the final legal text negotiated between the United States and the EU. 

We are therefore pleased to inform you that we have concluded negotiations and, pursuant to the 

provisions of the FIO Act of 2010, are providing you the final legal text of the agreement. 

Jacob J. Lew 

Secretary of the Treasury 

Sincerely, 

Michael B. G. Froman 

U.S. Trade Representative 
Identical Letter sent to: 

The Honorable Jeb Hensarling 

The Honorable Maxine Waters 

The Honorable Richard E. Neal 

The Honorable Orrin Hatch 

The Honorable Ron Wyden 

The Honorable Mike Crapo 

The Honorable Sherrod Brown 
The Honorable Richard E. Neal 

Ranking Member 

Committee on Ways and Means 

U.S. House of Representatives 

Washington, DC 20515 

Dear Representative Neal: 

January 13, 2017 

We write to inform you that we have negotiated a covered agreement with the European Union 

(EU) on behalf of the United States. The covered agreement will affirm our U.S. system of 

insurance supervision, protect insurance consumers, and provide meaningful benefits for U.S. 

insurers and reinsurers. The covered agreement addresses three areas of prudential insurance 

superv1s10n: group supervision, reinsurance, and exchange of information between supervisory 

authorities. 

Pursuant to 31 U.S.C. §314, the Federal Insurance Office (FIO) Act of2010 authorizes the 

Secretary of the Treasury (Treasury) and the United States Trade Representative (USTR) jointly 

to negotiate a covered agreement with one or more foreign governments, authorities, or 

regulatory entities. A covered agreement is a "written bilateral or multilateral agreement 

regarding prudential measures with respect to the business of insurance or reinsurance." 

On November 20, 2015, Treasury and USTR notified Congress that FIO and USTR would begin 

joint negotiations with the EU. These negotiations began in February 2016 and concluded in 

January 2017. The EU and the United States have agreed in writing that the attached text of the 

covered agreement is the final legal text negotiated between the United States and the EU. 

We are therefore pleased to inform you that we have concluded negotiations and, pursuant to the 

provisions of the FIO Act of 2010, are providing you the final legal text of the agreement. 

Jacob J. Lew 

Secretary of the Treasury 

Sincerely, 

Michael B. G. Froman 

U.S. Trade Representative 
Identical Letter sent to: 

The Honorable Jeb Hensarling 

The Honorable Maxine Waters 

The Honorable Kevin Brady 

The Honorable Orrin Hatch 

The Honorable Ron Wyden 

The Honorable Mike Crapo 

The Honorable Sherrod Brown 
The Honorable Orrin Hatch 

Chairman 

Committee on Finance 

United States Senate 

Washington, DC 20510 

Dear Chairman Hatch: 

January 13, 2017 

We write to inform you that we have negotiated a covered agreement with the European Union 

(EU) on behalf of the United States. The covered agreement will affirm our U.S. system of 

insurance supervision, protect insurance consumers, and provide meaningful benefits for U.S. 

insurers and reinsurers. The covered agreement addresses three areas of prudential insurance 

superv1s1on: group supervision, reinsurance, and exchange of information between supervisory 

authorities. 

Pursuant to 31 U.S.C. §314, the Federal Insurance Office (FIO) Act of2010 authorizes the 

Secretary of the Treasury (Treasury) and the United States Trade Representative (USTR) jointly 

to negotiate a covered agreement with one or more foreign governments, authorities, or 

regulatory entities. A covered agreement is a "written bilateral or multilateral agreement 

regarding prudential measures with respect to the business of insurance or reinsurance." 

On November 20, 2015, Treasury and USTR notified Congress that FIO and USTR would begin 

joint negotiations with the EU. These negotiations began in February 2016 and concluded in 

January 2017. The EU and the United States have agreed in writing that the attached text of the 

covered agreement is the final legal text negotiated between the United States and the EU. 

We are therefore pleased to inform you that we have concluded negotiations and, pursuant to the 

provisions of the FIO Act of2010, are providing you the final legal text of the agreement. 

Jacob J. Lew 

Secretary of the Treasury 

Sincerely, 

Michael B. G. Froman 

U.S. Trade Representative 
Identical Letter sent to: 

The Honorable Jeb Hensarling 

The Honorable Maxine Waters 

The Honorable Kevin Brady 

The Honorable Richard E. Neal 

The Honorable Ron Wyden 

The Honorable Mike Crapo 

The Honorable Sherrod Brown 
The Honorable Ron Wyden 

Ranking Member 

Committee on Finance 

United States Senate 

Washington, DC 20510 

Dear Senator Wyden: 

January 13, 2017 

We write to inform you that we have negotiated a covered agreement with the European Union 

(EU) on behalf of the United States. The covered agreement will affirm our U.S. system of 

insurance supervision, protect insurance consumers, and provide meaningful benefits for U.S. 

insurers and reinsurers. The covered agreement addresses three areas of prudential insurance 

superv1s10n: group supervision, reinsurance, and exchange of information between supervisory 

authorities. 

Pursuant to 31 U.S.C. §314, the Federal Insurance Office (FIO) Act of2010 authorizes the 

Secretary of the Treasury (Treasury) and the United States Trade Representative (USTR) jointly 

to negotiate a covered agreement with one or more foreign governments, authorities, or 

regulatory entities. A covered agreement is a "written bilateral or multilateral agreement 

regarding prudential measures with respect to the business of insurance or reinsurance." 

On November 20, 2015, Treasury and USTR notified Congress that FIO and USTR would begin 

joint negotiations with the EU. These negotiations began in February 2016 and concluded in 

January 2017. The EU and the United States have agreed in writing that the attached text of the 

covered agreement is the final legal text negotiated between the United States and the EU. 

We are therefore pleased to inform you that we have concluded negotiations and, pursuant to the 

provisions of the FIO Act of 2010, are providing you the final legal text of the agreement. 

Jacob J. Lew 

Secretary of the Treasury 

Sincerely, 

Michael B.G. Froman 

U.S. Trade Representative 
Identical Letter sent to: 

The Honorable Jeb Hensarling 

The Honorable Maxine Waters 

The Honorable Kevin Brady 

The Honorable Richard E. Neal 

The Honorable Orrin Hatch 

The Honorable Mike Crapo 

The Honorable Sherrod Brown 
The Honorable Mike Crapo 

Chairman 

Committee on Banking, Housing, 

and Urban Affairs 

United States Senate 

Washington, DC 20510 

Dear Chairman Crapo: 

January 13, 2017 

We write to inform you that we have negotiated a covered agreement with the European Union 

(EU) on behalf of the United States. The covered agreement will affirm our U.S. system of 

insurance supervision, protect insurance consumers, and provide meaningful benefits for U.S. 

insurers and reinsurers. The covered agreement addresses three areas of prudential insurance 

superv1s10n: group supervision, reinsurance, and exchange of information between supervisory 

authorities. 

Pursuant to 31 U.S. C. § 314, the Federal Insurance Office (FI 0) Act of 2010 authorizes the 

Secretary of the Treasury (Treasury) and the United States Trade Representative (USTR) jointly 

to negotiate a covered agreement with one or more foreign governments, authorities, or 

regulatory entities. A covered agreement is a "written bilateral or multilateral agreement 

regarding prudential measures with respect to the business of insurance or reinsurance." 

On November 20, 2015, Treasury and USTR notified Congress that FIO and USTR would begin 

joint negotiations with the EU. These negotiations began in February 2016 and concluded in 

January 2017. The EU and the United States have agreed in writing that the attached text of the 

covered agreement is the final legal text negotiated between the United States and the EU. 

We are therefore pleased to inform you that we have concluded negotiations and, pursuant to the 

provisions of the FIO Act of 2010, are providing you the final legal text of the agreement. 

Jacob J. Lew 

Secretary of the Treasury 

Sincerely, 

Michael B.G. Froman 

U.S. Trade Representative 
Identical Letter sent to: 

The Honorable Jeb Hensarling 

The Honorable Maxine Waters 

The Honorable Kevin Brady 

The Honorable Richard E. Neal 

The Honorable Orrin Hatch 

The Honorable Ron Wyden 

The Honorable Sherrod Brown 
The Honorable Sherrod Brown 

Ranking Member 

Committee on Banking, Housing, 

and Urban Affairs 

United States Senate 

Washington, DC 20510 

Dear Senator Brown: 

January 13, 2017 

We write to inform you that we have negotiated a covered agreement with the European Union 

(EU) on behalf of the United States. The covered agreement will affirm our U.S. system of 

insurance supervision, protect insurance consumers, and provide meaningful benefits for U.S. 

insurers and reinsurers. The covered agreement addresses three areas of prudential insurance 

superv1s1on: group supervision, reinsurance, and exchange of information between supervisory 

authorities. 

Pursuant to 31 U.S.C. §314, the Federal Insurance Office (FIO) Act of 2010 authorizes the 

Secretary of the Treasury (Treasury) and the United States Trade Representative (USTR) jointly 

to negotiate a covered agreement with one or more foreign governments, authorities, or 

regulatory entities. A covered agreement is a "written bilateral or multilateral agreement 

regarding prudential measures with respect to the business of insurance or reinsurance." 

On November 20, 2015, Treasury and USTR notified Congress that FIO and USTR would begin 

joint negotiations with the EU. These negotiations began in February 2016 and concluded in 

January 2017. The EU and the United States have agreed in writing that the attached text of the 

covered agreement is the final legal text negotiated between the United States and the EU. 

We are therefore pleased to inform you that we have concluded negotiations and, pursuant to the 

provisions of the FIO Act of 2010, are providing you the final legal text of the agreement. 

Jacob J. Lew 

Secretary of the Treasury 

Sincerely, 

Michael B. G. Froman 

U.S. Trade Representative 
Identical Letter sent to: 

The Honorable J eb Hensarling 

The Honorable Maxine Waters 

The Honorable Kevin Brady 

The Honorable Richard E. Neal 

The Honorable Orrin Hatch 

The Honorable Ron Wyden 

The Honorable Mike Crapo 
1

BILATERAL AGREEMENT BETWEEN THE EUROPEAN UNION

AND THE UNITED STATES OF AMERICA ON PRUDENTIAL MEASURES 

REGARDING INSURANCE AND REINSURANCE

Preamble

The European Union (EU) and the United States of America (United States or U.S.), 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 European Union, 

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 EU 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 
2

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
3

(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;
4

(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 

European Union or in the United States;

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

(r) “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;

(s) “Worldwide” means all operations or activities of a group wherever they occur;

and

(t) “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 
5

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, 
6

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 EU, 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 EU, 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 EU, 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:
7

(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;
8

(iii) prior to entry into the reinsurance agreement and not more than semiannually 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 semiannually 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 EU, 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 EU, 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 
9

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 Party 

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 pursuant to this Article 

takes effect, 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. 
10

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 Host 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.
11

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 EU 

Member State’s 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
12

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 EU supervisory authorities to 

exercise supervisory or regulatory authority over entities or groups that own or 

control credit institutions in the EU, have banking operations in the EU, 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 EU, 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 
13

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.
14

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 European Union, 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 or provisional

application of this Agreement, whichever is earlier, 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; 
15

(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.

Article 8 – Entry into force 

This Agreement shall enter into force seven days after the date the Parties exchange written 

notifications certifying that they have completed their respective internal requirements and 

procedures, or on such other date as the Parties may agree.

Article 9 – Implementation of the Agreement

1. From the date of entry into force or provisional application of this Agreement, whichever 

is earlier, 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 or provisional application of this Agreement, whichever 

is earlier, 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 or provisional application of this Agreement, whichever 

is earlier, the United States shall encourage each U.S. State to promptly adopt the following 

measures: 

(a) the reduction, in each year following the date of entry into force or provisional 

application of this Agreement, 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 the January 1 before signature of this Agreement; and 
16

(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 the date of signature of this Agreement, 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 an EU 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 the date of signature of this Agreement, 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 the date of signature of this Agreement, whichever is later. 

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

(a) the European Union shall provisionally apply Article 4 of this Agreement until the 

date of entry into force of this Agreement and then apply Article 4 thereafter by 

ensuring that supervisory authorities and other competent authorities follow the 

practices set forth therein from the seventh day of the month following the date on 

which the Parties have notified each other that their internal requirements and 

procedures necessary for the provisional application of this Agreement have been 

completed. 

The United States shall provisionally apply Article 4 of this Agreement until the 

date of entry into force of this Agreement and then apply Article 4 thereafter by 

using best efforts and encouraging supervisory authorities and other competent 

authorities to follow the practices set forth therein from the seventh day of the 

month following the date on which the Parties have notified each other that their 

internal requirements and procedures necessary for the provisional application of 

this Agreement have been completed.

(b) On the date of entry into force of this Agreement, or 60 months after signature of 

this Agreement, whichever is later:
17

(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 an EU 

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 an 

EU supervisory authority outside the territory of the European Union to a U.S.

insurance or reinsurance group, in relation to a threat to the financial stability of 

the EU, either Party may terminate this Agreement under an accelerated 

mandatory consultation and termination. 

(d) Until the date set forth in subparagraph (b), and without prejudice to the 

mechanisms set forth therein, the reinsurance provisions of Article 3, paragraphs 

1 and 2 shall apply with respect to an EU 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 an EU insurer or reinsurer than a U.S. insurer or 

reinsurer domiciled, licensed, or otherwise admitted in that U.S. State.
18

(e) from the date of provisional application as set out in subparagraph (a) and for 60 

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

authorities in the European Union 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

European Union. 

(f) from the date of signature of this Agreement, during the 60 month period referred 

to in subparagraph (b), 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 

EU no later than 24 months from the date of signature of this Agreement, 

provided that the Agreement has been provisionally applied or 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 the date of signature of this Agreement by both Parties, 

provided that the Agreement has entered into force; and

(i) as from the date of entry into force or provisional application of this Agreement, 

whichever is earlier, 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.
19

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 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. 
20

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 (EU 

Member State), 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 day-to-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;
21

(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 European Union 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 

European Union 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.
22

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;
23

(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.
24

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.