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Concerns raised on protectionist measures in key international markets for EU (re)insurers

Insurance Europe has published updated country fact sheets for Argentina, Brazil, India, Indonesia, and Turkey, which highlight a number of protectionist measures in these jurisdictions.

Although India is considering significant changes to its regulatory framework for reinsurance, it still has a system of order of preference in place. This system favours domestic reinsurers over branches of foreign reinsurers. This is despite the latter being supervised by the Insurance Regulatory and Development Authority of India and being subject to the same regulatory requirements as Indian reinsurers.

Whilst positive steps have been taken in Brazil in 2017 to roll back restrictions on affiliates’ transactions and other barriers, key restrictions such as required minimum retentions by local cedants and a system of order of preference remain in place.

Indonesia, which is currently in negotiations with the EU for a free trade agreement, maintains a variety of market access and trade barriers for foreign (re)insurers. These include significant (re)insurance retention limits, foreign ownership limits for (re)insurance companies and restrictions on cross-border data flows.

These provisions not only represent market access barriers for European (re)insurers, but can also adversely affect economic development in local markets, diminish the possibility of diversifying risk and create significant local concentration risks in the event of a major loss event, such as a natural disaster.

Published 22 March 2018