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British regulatory delegation seeks to energize US insurance relationship

British insurance regulators are meeting with U.S. policy experts and state insurance regulators this week, say sources familiar with the meetings.

The general purpose of the meetings appears to be weighing the direction of insurance regulation in the U.S. under the Trump Administration and at the state level. The visit comes at a time of uncertainty for European Union-U.S. regulatory relations due to the Brexit vote.

The fate of the recently forged but not yet adopted bilateral insurance agreement between the EU and the U.S. is also uncertain. Known as the "covered agreement," it strikes a deal to ease reinsurance collateral payments of European reinsurers in the U.S. market in exchange for lifting costly Solvency II obligations on U.S. companies in the EU market.

The first-of-its kind insurance covered agreement was forged Jan. 13 under the Obama Administration and is on a 90-day layover in Congress. At the end of 90 days, in mid-April, the Treasury Department and the Office of the United States Trade Representative, the agencies that negotiated the deal, must decide on the next steps they will take. The EU also must formalize signatures.

The British regulatory contingent is meeting with policy experts from Washington think tanks and policy centers such as the Brookings Institution, sources said. Brookings did not answer an email inquiry about a private breakfast held April 6. Legal representatives from major insurers and current and former government officials met with the British delegation, according to sources familiar with the series of meetings.

One person billed the visit as a "charm offensive" in the wake of the U.K. vote to begin the process of severing membership ties to the EU. The U.K. has a strong reinsurance market, and Lloyd's of London and others have been keenly interested in creating an even playing field with respect to reinsurance collateral when they engage in the U.S. markets.

The U.K. is trying to establish an identity separate from the EU while taking note in the U.S. of the political winds, various individuals familiar with the meetings said. The status of the covered agreement and reinsurance collateral are part of the discussions, according to sources.

The National Association of Insurance Commissioners confirmed that its spring national meeting in Denver will include a session with British insurance regulators, but the NAIC could not share the details of this private meeting. The Bank of England declined to comment. The U.S. Treasury and the USTR did not comment.

However, the British Embassy along with the U.K. Government Office is sponsoring an open reception "to celebrate the UK insurance sector" in Denver on April 7, according to an email sent to various NAIC representatives, state regulators and interested parties dealing with international insurance relations and cooperation at the NAIC.

The event promises a high-level delegation from the U.K., including, as described in an email invitation, Katharine Braddick, director general, Financial Services, for Her Majesty's Treasury; David Rule, executive director of insurance supervision for the Bank of England; and Gareth Truran, head of the insurance division for the Bank of England. The host is Benedict Wagner Rundell, an economic secretary with the British Embassy in Washington.

The British Embassy did not return an email query seeking comment.