[LONDON] The European Union has endorsed insurance rules used in the United States, Switzerland and five other countries as being as strict as its own, avoiding fragmenting the sector and pushing up costs.
Deeming foreign rules "equivalent" to EU rules means that insurers from the seven countries and the 28-state bloc can operate in each other's markets while only having to comply with home regulation, thus avoiding a duplication in costs.
The EU is introducing new capital rules for insurers from January, known as Solvency II, and the sector wanted legal certainty ahead of time on which rules they will have to comply with.
"The decisions taken today will lead to more choice and competition for European consumers and also enable European insurers to compete more effectively in overseas markets," EU financial services chief Jonathan Hill said in a statement.
The five other countries are Australia, Bermuda, Brazil, Canada and Mexico.