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By Brandon Ross
The Treasury Department is close to deciding whether to sign a U.S.-EU agreement that aims to grant insurers and reinsurers in both jurisdictions equal regulatory treatment, Treasury Secretary Steven Mnuchin said.
Appearing at a Senate committee hearing May 18, Mnuchin made his first public comments on the agreement, which is valued at billions of dollars in regulatory compliance savings to some companies, though not all insurers support it. Negotiations on the deal, called a covered agreement, were finished in the last week of the Obama administration; for it to become binding, both the Treasury Secretary and the U.S. Trade Representative are required to sign it.
“Now that the trade representative has been confirmed, we’ll be close to making a decision,” Mnuchin said at the Senate Banking, Housing and Urban Affairs Committee hearing on international and domestic policy. He wasn’t more specific on the time frame and didn’t tip his hand on the matter.
Robert Lighthizer, President Donald Trump’s nominee for the position of U.S. Trade Representative, was confirmed 82-14 on May 11.
The European Union is on track to approve the agreement through a lengthy process, but the Trump administration’s position on the deal has remained a mystery. House Financial Services insurance subcommittee members previously heeded the calls of anti-deal industry groups and state regulators by sending letters to Mnuchin and to the Office of the U.S. Trade Representative asking for additional written clarifications from the EU on the deal’s obligations. Meanwhile, pro-deal insurance groups and the lead negotiator on the deal have repeatedly warned that seeking such clarifications at this point is tantamount to reopening negotiations with the EU, which they say could sink the deal.
Mnuchin said there have been several internal Treasury briefings on the covered agreement and he’s now aware of the issues from both sets of stakeholders.
“This is another area that I am actually a lot more familiar with than when I first came during my hearings,” he said, following questions on the deal from Sen. Mike Rounds (R-S.D.).
The questions raised by anti-deal groups on the deal’s ambiguous obligations “should” be able to be answered before a decision is made, Rounds told Mnuchin.
Mnuchin said Treasury would get answers to the questions raised by the anti-deal stakeholders.
Although state regulators and some insurers complain of the deal’s ambiguity, pro-deal stakeholders have said they faced new and costly regulations in the EU throughout 2016. In anticipation of the deal being agreed to, EU regulators temporarily rolled back those regulations, pro-deal groups note, urging a swift signing of the deal.
To contact the reporter on this story: Brandon Ross in Washington at bRoss@bna.com
To contact the editor responsible for this story: Paul Hendrie at pHendrie@bna.com
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
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