Insurance Europe has published a series of country fact sheets that highlight the trade and market access barriers that European (re)insurers face in Argentina, Brazil, Canada, India and Indonesia.
Removing these barriers is vital to reduce protection gaps and to avoid dangerous concentrations of risk in these jurisdictions. Furthermore, to avoid a build-up of climate-related risks in any one jurisdiction and to facilitate the sharing of natural catastrophe risk across global (re)insurance markets, it is more important than ever that discriminatory barriers to trade and market access are removed.
In Argentina, foreign (re)insurers face several barriers, including restrictions on cross-border (re)insurance, compulsory investment constraints and foreign exchange restrictions on reinsurance payments. Despite some positive developments regarding the registration and licencing of foreign reinsurers, barriers in Brazil include restrictions on the reinsurance and retrocession limits applicable to cessions to occasional reinsurers, minimum insurance retentions by local cedants and their right to first refusal of business.
The review of the Canadian reinsurance regulatory framework concluded in early 2022, with the final guidelines including several potential market access barriers to foreign reinsurers that conduct business on a cross-border basis. This could increase Canada’s protection gap, as reinsurance capacity could be reduced significantly. Once implemented, the OSFI guidelines will create an unlevel playing field between registered and non-registered reinsurance, in favour of the former.
European (re)insurers are also concerned about the regulatory treatment of foreign branch offices in India. In addition, the recent introduction of new restrictions on foreign investments represents a worsening of the framework for foreign reinsurers, in contradiction with the Indian Government’s commitments and its objective to encourage growth and long-term investment in the Indian insurance market.
Indonesia is moving gradually towards the liberalisation of market access for foreign (re)insurers. However, new market access rules could create an uneven playing field between foreign reinsurers and affect the internal risk policies of international insurance groups.