WASHINGTON–A pending agreement aimed at bringing Russia into the World Trade Organization has won U.S. property-casualty insurers' support after changes to its provisions, a carriers' trade group executive said today.

David Snyder, American Insurance Association (AIA) vice president and assistant general counsel, voiced industry backing for the agreement in principle negotiated by the U.S. Trade Representative.

He explained the new pact follows eleventh hour negotiations reducing insurance company concerns about a cap on foreign insurance involvement in the Russian economy that the U.S. insurance industry couldn't support.

He voiced support for the deal on behalf of insurers after Reuters reported that a Russian newspaper, Kommerstant, said that Russian and U.S. leaders are expected to announce next week that they have reached a bilateral agreement opening the way for Russia to join WTO.

The newspaper said the two countries could make the announcement at a meeting on the fringes of the Asia-Pacific Economic Cooperation (APEC) summit in Hanoi on November 18-19.

On Nov. 1, Mr. Snyder, speaking on behalf of the industry, had said insurers weren't supporting comments by a U.S. business group based in Russia for a prompt pact, citing the cap issue.

But today, Mr. Snyder said the industry could support the agreement because concerns about the cap on overall participation had been eased. “The cap still exists in theory, but its commercial impact has been significantly reduced by last-minute negotiations,” Mr. Snyder said.

For example, he said, the cap will not apply to insurance companies established in Russia before January 2007, and under the agreement it cannot be used to limit company's business writing once the company is already in the market.

“Many of these details came into focus at the 11th hour,” Mr. Snyder said. He said the pact is now acceptable to AIA members, particularly in the context of other issues that have also been resolved.

The other matters that have been handled include provisions that allow U.S. insurers branching privileges and the phasing out of limitations on foreign involvement in compulsory lines of insurance, such as auto liability, over a period exceeding five years. “These were late-breaking developments, some of which occurred as late as last week,” he said.

“We believe that this agreement in principle is much better than the positions that Russia started with on insurance branching, compulsory lines and the sector cap,” Mr. Snyder said.

He added, “It should provide mutual benefits for Russia and AIA's members. We have long desired an agreement on insurance because it will help Russia develop economically and democratically.”

He said the next step is finalizing the details of the U.S.-Russia agreement, followed by further multilateral talks aimed at bringing Russia into the WTO in the near future. “Years of difficult negotiations have produced much progress on all insurance-related matters,” Mr. Snyder said.

“Thanks to the U.S. government's efforts, Russia has committed to doing much more on insurance than it had in negotiations with other WTO members,” he concluded.

Special Reports /

Insurers Back New Trade Status For Russia

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