BRUSSELS The European Union and the United States agreed on Friday to reduce legal and capital barriers to boost the $3 billion (£2.4 billion) transatlantic insurance and reinsurance market.
The accord has been under negotiation for more than a year and follows an agreement last year on derivatives.
U.S. and EU representatives said in a joint statement they had reached a deal "that will ensure ongoing robust insurance consumer protection and provide enhanced regulatory certainty for insurers and reinsurers operating in both the U.S. and the EU."
Under the deal, EU and U.S. authorities will lift requirements for reinsurers to hold more capital against risks if they operate from the other side of the Atlantic, eliminating one key hurdle for cross-border expansion.
Insurers will also benefit from lower supervisory requirements, a move expected to reduce costs.
"This is a major deal that is set to benefit insurers, reinsurers and policy holders on both sides of the Atlantic," said the EU financial services commissioner, Valdis Dombrovskis.
The deal paves the way for EU companies to increase their market share in the United States and for US companies to sell their policies more easily in the 28 European Union countries.
The deal needs approval from the European Parliament and U.S. Congress.
Two powerful Democrats on U.S. congressional committees said in statements on Friday that they will review the agreement to make certain that it leads to more balanced treatment of U.S. insurance companies.
"I look forward to closely studying the agreement and consulting with stakeholders to ensure that the agreement successfully addresses EU discrimination against the U.S. insurance and reinsurance industries," said Representative Richard Neal of Massachusetts, the most powerful Democrat on the U.S. House Ways and Means committee.
(Reporting by Francesco Guarascio, additional reporting by Suzanne Barlyn; editing by Alissa de Carbonnel and Cynthia Osterman)