Contents Page. March UK FSA Split (March 2013) 2. Europe IMD 2 Update 3

Transcription

1 March 2013 Contents Page UK FSA Split (March 2013) 2 Europe IMD 2 Update 3 UK Competition Law Developments in the Insurance Sector: December 2012 to March Asia Myanmar Agrees to Become a Signatory to the New York Convention 6 US Debate over Life Insurance Industry use of captive reinsurers and other affiliated special purpose vehicles continues 7 US NAIC s Mortgage Guaranty Insurance (E) Working Group 8 US Expedited Review for Potential Qualified Jurisdictions 9 US Updates to the ORSA Guidance Manual 10 US Insurers May Apply to Become Certified Reinsurers in Connecticut Pursuant to the Proposed Amended Regulations Implementing the Connecticut Credit for Reinsurance Law 10 US Seminar: Managing Cyber Security Threats in the Digital Age 12 Have you seen our Year in Review? 12 1 Global Corporate Insurance & Regulatory Bulletin

2 UK FSA Split (March 2013) The Financial Services Act 2012 (the Act ) received Royal Assent on 19 December The Act, which will come into force on 1 April 2013, will deliver the longawaited reform of financial regulation in the UK, replacing the old tripartite system. Among other things, the Act: gives the Bank of England responsibility for protecting and enhancing financial stability, bringing together macro and micro prudential regulation; introduces the Financial Policy Committee; and abolishes the FSA and replaces it with the twin peaks structure of the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). Secondary legislation under the Act, including regulations setting out how regulated activities will be divided between the new authorities has now been published and the new PRA and FCA Handbooks now appear on the FSA website. Insurers fall into the dual-regulated category of firms and as such will have to adapt to having two separate regulatory bodies. As such, the industry will be keen to get to grips with how this structure will operate in practice, notwithstanding that the FSA has for much of the last 12 months adopted a twin peaks shadow internal structure as a transitional step. It is a commonly held view that the success of the new regulatory regime will depend to some extent on the effective coordination between the different regulatory bodies and avoiding so far as possible unnecessary overlap. The former head of the FSA referred in a speech last year to the new structure as independent but coordinated regulation. Perhaps understandably, the industry has concerns about how effective the new structure will be for instance, the ARROW risk mitigation programme will be replaced by two separate risk mitigation programmes. Further, the memorandum of understanding between the PRA and the FCA first published in January 2012 remains in draft form. Inevitably, effective coordination can only be achieved over time but with an ever increasing regulatory burden, authorised firms will be keen to avoid unnecessary duplication in their dealings with their regulator(s). A further point to note is the new powers of direction that the regulator will have over unregulated parent undertakings. The Bank of England and the FSA have published a consultation paper containing a draft policy statement on the PRA s use of such powers, including a non-exhaustive list of possible scenarios in which the PRA may consider exercising such powers. The rationale behind these new powers is that the parent company of an authorised firm will often decide overall group strategy and organisation, group risk management policies, group recovery plans and intra-group flows of capital and liquidity. This is all part of the consolidated and holistic approach to supervision. The key point is that the PRA will have the power to intervene in a wide range of potential scenarios. Further, the non-exhaustive list of possible directions which the PRA may consider making include restrictions on dividend payments, a requirement to move funds, a requirement to restructure and to raise more capital. Interestingly, mayer brown 2

3 such a qualifying parent undertaking includes a UK incorporated parent undertaking or one with a place of business in the UK, which casts the net potentially wider. However, it is unclear how effective such a power could be in respect of a non-uk entity. In such event the regulator might turn its attentions to an intermediate UK-domiciled holding company. Europe IMD 2 Update On 22 March 2013, the European Parliament published the opinion of its Committee on Legal Affairs (JURI) regarding the proposed Insurance Mediation Direction (recast), known as IMD2. The key things to come out of this opinion are as follows: The scope of IMD2 should be narrowed: The inclusion of the activities of professional management of claims and loss adjusting in the scope of IMD2 is not justified. The inclusion of these activities does not relate to the sale of insurance products and, therefore, cannot be considered insurance mediation activities. An important factor in the removal of these activities from the scope of IMD2 is that they are already sufficiently covered by national legislation. Certain exceptions should remain: The exception for complementary insurances covering damage to, or loss of, baggage and other risks linked to travel booked with that provider should remain. It is believed that these insurances are usually simple products with low premium and short duration and, as a result, it is not necessary to include them within the scope of IMD2. The definition of contingent commission is widened: JURI has expressed that commissions are not only generated by achieving targets related to business placed, but also by the number of claims from clients of the intermediary. Consequently, the definition of contingent commission should include all elements influencing this remuneration. The hurdle of demonstrating appropriate professional experience is removed: JURI states that the requirement for intermediaries and members of staff of insurance undertakings to demonstrate appropriate professional experience should be removed on the basis that it would make access to the profession of insurance intermediaries practically impossible. However, JURI did highlight the importance of insurers possessing the appropriate knowledge and ability to complete their tasks adequately. The requirements for a detailed remuneration disclosures are deleted: JURI states that excessively detailed disclosures can be confusing for consumers and as such does not contribute to comer protection. Therefore, the disclosures requirements regarding the amount of the remuneration, and the nature and basis of the calculation of any variable remuneration, should be removed. 3 Global Corporate Insurance & Regulatory Bulletin

4 UK Competition Law Developments in the Insurance Sector: December 2012 to March 2013 Update on Competition Commission investigations: healthcare insurance and motor insurance 1) Private healthcare insurance On 28 February this year, the Competition Commission (CC) published provisional views on competition issues in the UK private healthcare market. Its investigation includes a key focus on the conduct of private medical insurers, including on whether certain insurers exercise buyer power in relation to individual consultants. The CC is concerned that this buyer power may mean that insurers only contract with those consultants who do not charge fees for their services beyond the maximums that insurers are willing to pay, and that this might be disadvantageous for patients, by restricting patient choice of consultants. The CC is also investigating the interrelationship between insurers and private hospital operators, in particular: whether private hospital operators have market power in negotiations with insurers and whether this could be leading to higher prices for patients; and whether volume-related discounts offered to insurers by hospital operators increase barriers to entry for new hospital operators. The CC is expected to publish its final assessment on the healthcare market in March ) Private motor insurance The CC in February 2013 published an update to its investigation into the UK private motor insurance market in the UK, which began in September The CC is concerned that prices of compensatory services (e.g. repair, legal and medical services) supplied following a road accident are increased due to the incentives created by the UK system of cost allocation. Under this system, the cost of compensatory services is paid by the fault-party insurer, but selected by the nonfault-party, so that the insurer paying for the services is not in control of its costs. The CC is also investigating whether consumers suffer harm as a result of the following characteristics of the motor insurance market: a potential lack of alignment between the interests of consumers and those of parties who procure post-accident services on consumers behalf; the prevalence of add-on insurance in the sector, for example, legal expenses cover, windscreen cover and breakdown cover. The CC considers that add-on insurance products can be complex, that it may be difficult for consumers to know exactly what is included or excluded, and that information available at the point of sale may not be sufficient to enable consumers to understand these products fully or estimate their value; mayer brown 4

5 no-claims bonuses disincentivising consumers from switching; whether certain clauses in contracts between insurers and price comparison may be harmful to competition; and in Northern Ireland alone, whether a limited choice of insurers is allowing insurers to charge higher prices or reduce the quality of service offered. Update on other competition investigations: add-on insurance and co(re) insurance 1) FSA study into add-on insurance In December 2012, the FSA announced a study into general add-on insurance products, such as insurance sold in conjunction with large purchases like cars or holidays. The FSA will assess whether the add-on market contributes to the weakening of competition, or driving poor consumer outcomes. In March 2012, in its Retail Conduct Risk Outlook, the FSA commented that the bundling of add-on insurance products, sometimes at a high profit margin, might impact on consumers understanding of the overall value and cost of the primary product. The FSA is undertaking this study in preparation for the transition to the FCA, a new financial services regulator which will also wield competition powers. The Handbook for the new FCA comes into force on 1 April ) European Commission study into co(re)insurance pools and subscription In February 2013, the European Commission (the Commission ) published a study of competition issues within co(re)insurance pools and agreements on the subscription market. A previous inquiry by the Commission into the business insurance sector, published in 2007, had flagged concerns that anti-competitive agreements or concerted practices might be leading to the alignment of premiums in the market for joint reinsurance. This year s study has found that the subscription market is competitive. The Commission found that such alignment is instead the result of market equilibrium following an intensely competitive auction process for the selection of the lead insurer in a pool and the competitive negotiation of terms and conditions, including premiums. However, despite this, the Commission did note that in relation to co(re) insurance pools and line slips, businesses are not conducting adequate competition self-assessments and there is only mixed awareness of the Insurance Block Exemption Regulation, which grants certain pools a safe harbour from certain competition restrictions. Payment protection products - final guidance Following the PPI mis-selling investigation, in January 2013 the OFT and FSA issued final guidance on a new generation of payment protection products ( PPP ). The guidance warns firms of the risks of PPP, such as firms not identifying, or tailoring their product to, their target market adequately, and provides tips on how a firm might design PPP in order to comply with the regulatory regime. 5 Global Corporate Insurance & Regulatory Bulletin

6 Asia Myanmar Agrees to Become a Signatory to the New York Convention On 6 March 2013, Myanmar s Parliament voted in favour of Myanmar becoming a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 ( the New York Convention ). The New York Convention can be signed by any Member State of the United Nations or any State which is a party to the Statute of the International Court of Justice. At present, 148 of the United Nations member countries have signed the New York Convention. The objective of the New York Convention is to prevent signatory states from discriminating against foreign arbitral awards and to ensure that foreign awards are recognised and capable of being enforced in the same way as domestic arbitration awards. The New York Convention also allows arbitration awards made in a signatory state to be enforced in any country which is a signatory to the New York Convention. Clearly, the reason behind Myanmar s decision to accede to the New York Convention is to continue to encourage direct foreign investment into Myanmar following the suspension of sanctions in When Myanmar accedes to the New York Convention, foreign entities investing in Myanmar can use a neutral arbitration centre such as Singapore or Hong Kong to resolve contractual disputes and enforce a favourable arbitration award obtained outside Myanmar against assets of the opposing party located within Myanmar. The announcement of the Myanmar Parliament is therefore to be applauded and is a step in the right direction in putting in place means by which the resolution of commercial disputes arising in Myanmar can be dealt with fairly and efficiently. Foreign investment in Myanmar, including investment from insurance companies, has been adversely affected by concerns about the transparency and impartiality of Myanmar s judicial system. The proposed accession by Myanmar to the New York Convention would go some way to allaying these concerns of foreign entities proposing to invest in Myanmar. Notwithstanding this welcome news, the timescale for Myanmar s proposed accession to the New York Convention remains unclear and domestic legislation will be required following accession to implement the provisions of the New York Convention. Again, it is unclear what the timetable is likely to be for the required legislation to be enacted. Other risks also exist, as has been seen in a number of other jurisdictions around the region. Even if a country accedes to the New York Convention and necessary domestic legislation is enacted, there are very often departures from the key provisions of the New York Convention relating to the enforcement of foreign arbitral awards and the grounds upon which domestic courts may refuse to recognise the validity of foreign awards. Although this recent development is, therefore, to be welcomed, it remains to be seen when and how the principles of the New York Convention will be implemented in Myanmar. mayer brown 6

7 US Debate over Life Insurance Industry use of captive reinsurers and other affiliated special purpose vehicles continues On March 14, 2013, the Captive and Special Purpose Vehicle Use (E) Subgroup of the National Association of Insurance Commissioners (NAIC) exposed for comments a revised draft of its White Paper (available here) discussing the use by US commercial life insurers of affiliated special purpose reinsurers for certain financing activities. The Subgroup s focus has been, and continues to be, primarily directed at transactions whereby life insurers transfer risks to affiliated special purpose reinsurers on blocks of (i) guaranteed premium term life insurance products subject to Regulation XXX and (ii) universal life insurance products with secondary guarantees subject to Actuarial Guideline 38 (also known as Regulation AXXX), in either case, to facilitate the financing of perceived reserve redundancies caused by the applicable regulation. Many US life insurers have used these types of financings as a means of capital relief since the advent of the regulations (dating back to the early 2000s), however, several 2011 articles suggesting that the use of special purpose reinsurers might constitute a shadow insurance industry prompted many US insurance regulators and the NAIC as a whole to re-examine such transactions in this post-financial crisis environment. The latest iteration of the White Paper reveals the continuing lack of consensus among regulators over the existence, scope and pervasiveness of possible abuses related to captive reinsurer financings. Most of the White Paper s recommendations point to the need for further information gathering and analysis rather than immediate legislative or regulatory action. Nevertheless, there are several subtle, but noteworthy changes in the current draft that appear to suggest that the Subgroup is tempering its posture in relation to reserve financings. First, all references to a shadow insurance industry were removed, which considerably softened the hostile tone of the prior draft. Second, the express purpose of the Subgroup s charge, which previously drew an unsubstantiated analogy between captive reinsurer financings and risky banking transactions, was changed to a less dramatic need to study whether policyholders of commercial insurers that had formed captive and special purpose vehicles could be subject to risk because of the differences in the regulation of such entities. Finally, each characterization of conditional or contingent letters of credit (which are currently some of the most popular forms of collateral for captive reserve financings) was modified from some form of the conclusive not permitted to a more ambiguous may not be permitted or not generally permitted, and language was added advising that non-traditional collateral forms warrant further consideration. Overall, the slight shift in approach reflected in the White Paper should give some comfort to proponents of life insurance reserve financings. At this point, US state insurance regulators who actively participate in the debate regarding captive financings appear to fall into three distinct camps: (i) those who view special purpose financing vehicles and life insurance reserve financing transactions the most skeptically, and would prefer they were abolished, (ii) those who are willing to tolerate complex financing structures as interim solutions pending the final adoption of a comprehensive principles-based reserving system that would negate the need for reserve financings and (iii) those who see life reserve financing structures as innovative tools for bringing much needed outside capital into the life 7 Global Corporate Insurance & Regulatory Bulletin

8 insurance industry. Since any principles-based reserving solution would require regulators in either New York or California to reverse their current positions, the groups described in (ii) and (iii) above combined may have the upper hand in the discussions of captive reinsurer financings for the time being. That could all change abruptly, however, in the event that the investigation that the New York Department of Financial Services (DFS) is independently conducting into the use of captive financings uncovers some blatant wrongdoing. The NAIC study of the use of captives for financing transactions, and the New York DFS investigation of insurers involved in such transactions, did not escape the attention of newly empowered US federal regulators. Just prior to the release of the latest White Paper draft, the Federal Insurance Office (FIO) indicated that it was separately investigating the use of captive reinsurers to finance life reserves. Toward that end, FIO Director Michael McRaith called for the creation of a federal task force that would report directly to the US Treasury Department. That announcement drew an immediate response from state insurance regulators. Connecticut Insurance Commissioner Thomas Leonardi said publicly that the FIO might be unnecessarily overlapping state turf and that duplications of efforts are costly, inefficient and an ineffective way to find solutions to issues. This promises to be perhaps the first, but certainly not the last, difference of opinion between state and federal regulators regarding the most efficient and effective ways to regulate the business of insurance. See also the articles on Life Reserve Financing and Regulatory Scrutiny of Use of Captives and Special Purpose Vehicles in our Global Insurance Industry 2012 Year in Review (available here). US NAIC s Mortgage Guaranty Insurance (E) Working Group At the end of 2012, the National Association of Insurance Commissioners ( NAIC ) created the Mortgage Guaranty Insurance (E) Working Group (the MGIWG ). The MGIWG was created to consider what changes might be necessary, if any, to the solvency regulation of mortgage guaranty insurers in the United States and to make recommendations for any such proposed changes to the NAIC s Financial Condition (E) Committee including possible changes to the NAIC s Mortgage Guaranty Insurance Model Act (the MGI Model Act ). On February 19, 2013, the MGIWG exposed for comment a draft document called Concepts - List of Potential Regulatory Changes (available here), which set forth the problems that the MGIWG has identified in the current regulation of mortgage guaranty insurance that might warrant changes to the MGI Model Act. In the draft, the MGIWG listed three problems that it believes have to be addressed: 1) the overconcentration of mortgage origination in a small number of banks places competitive pressure on insurers to either take all the business from a given bank or receive no business from that bank; 2) mortgage guaranty insurance is used as a form of economic catastrophe insurance, which is thought to lead to a distortion of corporate income taxes and stockholder dividends for companies in this line of business; 3) profitability of mortgage guaranty insurance during long periods of great profitability is thought to create a disincentive to underwrite the business attentively. mayer brown 8

9 In response to these issues, the MGIWG s draft document proposes several potential regulatory changes, including: Requiring minimum underwriting standards; Considering changes to minimum capital requirements; Updating and modifying contingency reserve requirements; Abolishing reinsurance requirements to concentrate resources and cut unnecessary overhead expenses; Prohibiting captive reinsurance arrangements with originating banks; Limiting dividends to force insurers to retain capital in long profitable time periods for availability during periods of severe losses; Creating a mutual reinsurance company that all insurers would be required to use to house additional reserves for bad times; Creating some FDIC-like government entity as a backstop where premiums are paid in over an entire business cycle; Establishing new reporting requirements that break out the types of risk/ exposures and are used to help determine/assess leverage and potentially used for capital requirements; Re-establishing the Home Owners Loan Corporation to facilitate greater uniformity in the workout process for borrowers that meet criteria indicating that they are viable prospects for retaining home ownership; Modifying investment limitations; and Establishing rights and responsibilities for mortgage guaranty insurers concerning rescissions of insurance policies and certificates. On February 28, 2013, the MGIWG held a conference call to discuss problems with and potential recommendations regarding the current situation of mortgage guaranty insurance. The discussion points from that conference call and comments to the draft exposed by MGIWG, which were due by March 29, 2013, will be considered further at the NAIC Spring National Meeting in Houston, Texas on April 5, US Expedited Review for Potential Qualified Jurisdictions On November 28, 2012, the Qualified Jurisdiction Drafting Group (the Drafting Group ) of the NAIC s Reinsurance Task Force exposed a draft document regarding the NAIC Process for Developing and Maintaining the List of Qualified Jurisdictions under the revised NAIC Credit for Reinsurance Model Law and Regulation (the NAIC Reinsurance Model Law and Regulation ). The Drafting Group is developing a documented evaluation process for creating and maintaining the NAIC s list of qualified jurisdictions from which reinsurers will be able to apply to qualify as certified reinsurers and thus be eligible to post less than 100% collateral as permitted under the revised NAIC Reinsurance Model Law and Regulation. Comments on the draft document were due by March 22, Global Corporate Insurance & Regulatory Bulletin

10 During a conference call on March 6, 2013, the Drafting Group discussed a possible expedited review process to identify certain conditionally qualified jurisdictions. Expedited review would allow several major jurisdictions to become qualified relatively quickly, albeit on a conditional basis pending the completion of the formal qualification process, and would, in turn, allow reinsurers from such jurisdictions to apply for reduced collateral eligibility. In the absence of such an expedited review, it could take a fairly long time for a jurisdiction to complete the qualification process. At this time, the Drafting Group has proposed that Bermuda, Germany, Switzerland and the United Kingdom should be among the jurisdictions considered for the proposed expedited conditional qualification process. During the March 6th conference call, certain interested parties suggested that France and Japan also be considered for expedited review. The Drafting Group has noted that the completion of the qualified jurisdictions list is a high priority for the NAIC in The Drafting Group has stated that it intends to distribute an updated draft of the full evaluation process document in advance of the NAIC Spring National Meeting. US Updates to the ORSA Guidance Manual As reported previously, the NAIC approved the Risk Management and Own Risk and Solvency Assessment Model Act in September In connection with the model act, the NAIC s Own Risk and Solvency Assessment (E) Subgroup of the Financial Condition (E) Committee (the ORSA Subgroup ) is tasked with revising the Own- Risk Solvency Assessment Guidance Manual (the ORSA Guidance Manual ) to outline the reporting requirements that insurers will be required to report under the model act. In March 2013, the ORSA Subgroup approved an updated version of the ORSA Guidance Manual (available here), which reflects comments from insurers participating in a pilot program to test how the ORSA disclosures mandated by the model act will work in practice. Significant changes to the document include added language as to what insurers should include in their Summary Report, such as the basis of accounting, a summary of material changes from the prior year, a comparative view of group capital from the prior year and a description of which entities within the group that are included or an organizational chart. The updated document also adds a glossary of terms in the Appendix. A second pilot program is expected to test the updated ORSA Guidance Manual policies later this year. In the meantime, the ORSA Guidance Manual updates will have to go through the NAIC s approval process, but it is expected that the NAIC will approve all of the updates. US Insurers May Apply to Become Certified Reinsurers in Connecticut Pursuant to the Proposed Amended Regulations Implementing the Connecticut Credit for Reinsurance Law The Connecticut Insurance Department (the Department ) issued Bulletin No. FS-25 (available here) on March 1, 2013 (the Bulletin ), allowing insurers to apply to become certified reinsurers in Connecticut pursuant to the Credit for Reinsurance law, which was amended effective October 1, Connecticut is one of 10 states mayer brown 10

11 that now permit credit for reinsurance for amounts ceded to or assumed by a certified reinsurer. The other nine states are: California, Delaware, Georgia, Indiana, Louisiana, New Jersey, New York, Pennsylvania and Virginia. The October 1, 2012 amendments to Connecticut s Credit for Reinsurance Law reflect the amendments to the NAIC Credit for Reinsurance Model Law, which create the category of certified reinsurers that are eligible to post less than 100% collateral and allow ceding insurers to receive reinsurance credit for amounts ceded to or assumed by such reinsurers. The Department has proposed amendments to the Connecticut Credit for Reinsurance regulations to implement the amended statutory provisions. The proposed amended regulations must be approved by the Legislative Regulation Review Committee of the General Assembly and filed with the Secretary of State before becoming operational. However, the Bulletin provides that while the approval of the proposed amended regulations is pending, reinsurers may apply to become certified reinsurers by meeting the statutory requirements and the requirements in the proposed amended regulations. To be eligible for certification, a reinsurer must: Be domiciled and licensed to transact insurance or reinsurance in a qualified jurisdiction, as identified by the Commissioner; Maintain minimum capital and surplus requirements (no less than $250 million) or their equivalent in an amount prescribed by the Commissioner pursuant to the regulations concerning credit for reinsurance; Maintain financial strength ratings from two or more rating agencies that are deemed acceptable by the Commissioner pursuant to the amended regulations concerning credit for reinsurance; Standard & Poor s; Moody s Investors Service; Fitch Ratings; A.M. Best Company; or Any other nationally recognized statistical rating organization Agree to submit to the jurisdiction of the State of Connecticut and appoint the Commissioner as its agent for service of process in the state; Agree to provide security for 100% of such insurer s liabilities attributable to reinsurance ceded by domestic and foreign ceding insurers if the assuming insurer resists enforcement of a final judgment entered by a court in Connecticut or another state; Agree in the trust agreement, if the assuming insurer chooses to secure its obligations incurred under reinsurance agreements issued or renewed as a certified reinsurer in the form of a multi-beneficiary trust, that such assuming insurer shall, upon termination of any trust account of such trust, fund any deficiency of any other trust account of such trust out of the remaining surplus of the trust; 11 Global Corporate Insurance & Regulatory Bulletin

12 Agree to meet applicable filing requirements as prescribed by the Commissioner; and Comply with any other requirements deemed necessary for certification. The Bulletin provides a checklist, which should be used to complete an application for reinsurer certification. US Seminar: Managing Cyber Security Threats in the Digital Age The need to protect critical business operations, intellectual property and networks from cyber attacks continues to receive significant attention. High-profile cyber attacks and data breaches have led to new cyber security measures and discussions around the world about the appropriate baseline cyber security protections for business. Please join Mayer Brown, Good Harbor Security Management and our guest speakers as we discuss the impact of cyber attacks and potential new government requirements on business owners and operators. Key topics to be addressed include: Cyber security threats: What do they mean for homeland and economic security Implications of the Cyber Security Executive Order and proposed cyber security legislation for businesses Incident disclosure: What the SEC s cyber guidance means for you Legal risks to be aware of when exposed to with a cyber security breach Developing and implementing appropriate responses to cyber security incidents Defending against class action lawsuits over cyber security breaches Using insurance as risk mitigation for cyber security For further details and to register please go to the event page on the Mayer Brown website. Have you seen our Year in Review? We have recently released our Global Insurance Industry 2012 Year in Review, which discusses some of the more noteworthy developments and trends in insurance industry transactions in 2012 in the US, Europe, Asia and Latin America, with particular focus on mergers and acquisitions, corporate finance, and the insurancelinked securities and convergence markets. A request for the 2012 Year in Review can be made here. mayer brown 12

13 If you have any query in connection with anything in this Bulletin, please do not hesitate to get in touch with your usual Mayer Brown contact or one of the contacts referred to below. CO-EDITOR Martin Mankabady Partner CO-EDITOR David Alberts Partner CO-EDITOR Lawrence Hamilton Partner CO-EDITOR Vikram Sidhu Counsel Learn more about our Insurance Industry Group. Mayer Brown is a global legal services organisation advising many of the world s largest companies, including a significant portion of the Fortune 100, FTSE 100, DAX and Hang Seng Index companies and more than half of the world s largest banks. Our legal services include banking and finance; corporate and securities; litigation and dispute resolution; antitrust and competition; US Supreme Court and appellate matters; employment and benefits; environmental; financial services regulatory & enforcement; government and global trade; intellectual property; real estate; tax; restructuring, bankruptcy and insolvency; and wealth management. OFFICE LOCATIONS AMERICAS: Charlotte, Chicago, Houston, Los Angeles, New York, Palo Alto, Washington DC ASIA: Bangkok, Beijing, Guangzhou, Hanoi, Ho Chi Minh City, Hong Kong, Shanghai, Singapore EUROPE: Brussels, Düsseldorf, Frankfurt, London, Paris TAUIL & CHEQUER ADVOGADOS in association with Mayer Brown LLP: São Paulo, Rio de Janeiro Please visit our website for comprehensive contact information for all Mayer Brown offices. Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the Mayer Brown Practices ). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorised and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC ); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. Mayer Brown and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions The Mayer Brown Practices. All rights reserved ins March 2013 XXXX