EU Directive May Impact U.S. Reinsureds U.S.insurance companies that buy reinsurance from companies in Germany,Sweden or Great Britain may have more than hard market conditionsto consider once an EU “directive” is implemented in the secondquarter of this year.
The European Union directive, which creates guidelines forinsolvency procedures for insurance companies in EU countries, maycause reinsurance buyers to reconsider ceding business to companiesthat arent among the financially strongest players in thosecountries or from those reinsurers that also include directwritings among their coverage offerings.
The directive was issued in April 2001, and all EU countriesmust implement the procedures outlined in the directive by April30, 2003. Essentially, it creates a system for reorganization andwinding up proceedings for defunct insurance and reinsurancecompanies throughout the EU.
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