Comparative Reinsurance Regulation - European Union and United States

1. Supervisory Rules for Foreign Reinsurance Undertakings By: Greg Arnold Feb. 19, 2008 Course: Insurance Regulation In the European Union Visiting Professor Pierpaolo Marano

3. Supervisory Rules for Foreign Reinsurance Undertakings EU and U.S.

4. Sources of Foreign Reinsurance Supervision Rules EU Federal-Like Supervision US State Supervision

5. Sources of Foreign Reinsurance Supervisory Rules EU European Parliament and The Council Reinsurance Directive (RID) 2005/68/EC Actual Law (Uniform Rules, 27 EU Member Countries, 30 EEA Countries) US National Association of Insurance Commissioners Nonadmitted Insurance Model Act (NIMA) Recommended Model Laws (Regulation by 51 Jurisdictions)

8. Article 49 Principle and Conditions for Conducting Reinsurance Business A Member State shall not apply to reinsurance undertakings having their head offices outside the Community and commencing or carrying out reinsurance activities in its territory provisions which result in a treatment more favourable than that accorded to reinsurance undertakings having their head office in that Member State.

14. Implementation Into National Law UK Sources of Foreign Reinsurance Supervision EU European Parliament and The Council Reinsurance Directive (RID) 2005/68/EC Actual Law (Uniform Rules, 27 EU Member Countries, 30 EEA Countries) US National Association of Insurance Commissioners Nonadmitted Insurance Model Act (NIMA) Recommended Model Laws (Regulation by 51 Jurisdictions)

15. Implementation Into National Law UK Financial Services and Markets Act 2000 The RID came into force Dec. 10, 2005 and was originally to be implemented by Dec. 10, 2007 (extended to October 2008). The UK Financial Services Authority (“FSA”) states that most of the provisions of the RID had already been implemented by the UK prior to the planned effective date. The next slides will discuss what was done for full implementation.

16. Financial Services and Markets Act 2000 2006 Implementations (cont’d) On 31 December 2006 the FSA introduced prudential changes for insurers which included the introduction of a principles-based approach to asset admissibility, the reduction of certain reinsurance solvency requirements and the authorization and supervision of insurance special purpose vehicles. Source: Implementation of the Reinsurance Directive in the UK , Clyde & CO LLP Newsletter, January 2008, available at http://www.runoffmarket.com/docs/a014/Run-off-Jan-2008.pdf .

23. Sources of Foreign Reinsurance Supervisory Rules EU European Parliament and The Council Reinsurance Directive (RID) 2005/68/EC Actual Law (Uniform Rules, 27 EU Member Countries, 30 EEA Countries) US National Association of Insurance Commissioners Nonadmitted Insurance Model Act (NIMA) Recommended Model Laws (Regulation by 51 Jurisdictions)

28. Implementation Into National Law UK Adoption into State Law New York State Sources of Foreign Reinsurance Supervision EU European Parliament and The Council Reinsurance Directive (RID) 2005/68/EC Actual Law (Uniform Rules, 27 EU Member Countries, 30 EEA Countries) US National Association of Insurance Commissioners Nonadmitted Insurance Model Act (NIMA) Recommended Model Laws (Regulation by 51 Jurisdictions)