Germany: BaFin issues an explanatory note regarding the conduct of reinsurance business by US reinsurers in Germany

In September 2017, the EU and the USA signed a bilateral agreement which, among other things, allows reinsurers from the USA to carry out reinsurance business with primary insurance or reinsurance undertakings in the EU without a branch being required in the relevant EU member state, if certain requirements (laid down in Article 3 (4) of the bilateral agreement) are met.

On 18 September 2019, the German Federal Financial Supervisory Authority, BaFin, issued an explanatory note ("Merkblatt") which further outlines BaFin´s expectations in this regard.

The explanatory note summarizes the documents and information which have to be submitted by the US Reinsurance undertaking to BaFin for the initial submission, as well as subsequent submissions, to be performed each year. It also further explains the submission process.

Original versions of all declarations by the US reinsurer must be submitted to BaFin in writing and signed by the governing body authorised to represent the reinsurer. Scans are not sufficient.

The documents can be filed in English. However, if no German translation is filed, an original version of a declaration, signed by the governing body authorised to represent the reinsurer, must be submitted in which the reinsurer undertakes to submit a translation of the documents on request.

BaFin also recommends providing contact details both of competent persons with the reinsurer to whom questions about the submissions can be sent and of the competent supervisory authority.

BaFin will respond in writing to submissions, which can be sent in advance by fax on request.

Lastly, BaFin states that in the future a summary table of US reinsurers which have submitted the necessary documents and information by 30 June of each year will be made available on their website (www.bafin.de), but only if the reinsurer in question has given its express consent. Moreover, where market participants send questions to BaFin about individual US reinsurers, BaFin will only provide information about the submissions if the reinsurer has consented to the communication of information about the status of the submissions.