The agreement will principally benefit EU reinsurers operating in the USA, the European Commission said, by progressively removing collateral requirements.
"For several decades, EU reinsurers have had to post collateral when signing reinsurance contracts in the US, while US reinsurers are not subject to such requirements," it said.
Local presence and collateral requirements will be fully eliminated after five years and US states will begin to reduce the collateral requirements for EU reinsurers immediately by 20% per year for five years.
"The volume of collateral posted by EU reinsurers amounts to $40 billion today, which could be invested in more productive parts of the economy. This represents opportunity costs of $400 million a year," the Commission said.
Group supervision requirements will be limited to only those of the 'home' jurisdiction rather than the added burden of having to comply with 'host' jurisdiction requirements.
The EU and US sides will regularly meet to discuss the implementation of the agreement, which foresees a mechanism of consultation in case of differences, the Commission said.
The European parliament and council have still to approve the agreement.