Insurance Europe outlines “vital” need to remove key re/insurance access barriers
By Charlie Wood — Insurance Europe has underlined the importance of removing market access barriers between European re/insurers and the countries Argentina, Brazil, Canada, India and Indonesia.
The governing body believes this action is needed to help reduce protection gaps and avoid dangerous concentrations of risk in these jurisdictions.
Furthermore, avoiding a build-up of climate-related risks in any one jurisdiction and facilitating the sharing of natural catastrophe risk across markets is described as more important than ever.
In Argentina, foreign re/insurers are said to face several barriers, including restrictions on cross-border reinsurance, compulsory investment constraints and foreign exchange restrictions on reinsurance payments.
Barriers in Brazil include restrictions on the reinsurance and retrocession limits applicable to cessions to occasional reinsurers, minimum insurance retentions by local cedants and their right to first refusal of business.
The review of the Canadian reinsurance regulatory framework includes several potential market access barriers to foreign reinsurers that conduct business on a cross-border basis.
IE says this could increase Canada’s protection gap, as reinsurance capacity could be reduced significantly.
While recent changes in Indian re/insurance regulations have introduced some positive developments towards the further opening of the re/insurance sector, European re/insurers are said to remain concerned about several discriminatory measures concerning foreign investments and the situation of foreign branch offices.
Indonesia is described as moving gradually towards the liberalisation of market access for foreign re/insurers, but that new market access rules could create an uneven playing field between foreign reinsurers.