WASHINGTON–Insurance interests and the American government are making diplomatic efforts to resolve continuing roadblocks hampering expansion of U.S. insurance companies in China, a trade group representative said.

David Snyder, vice president and assistant general counsel for the American Insurance Association, said that China has one of the top markets for insurers in the world, with double digit annual growth for the past few years that is expected to continue.

Overall, he said, the country has made “significant progress” in modernizing and opening its insurance market. “It's a spectacular potential market,” he added, “and our companies remain committed to that market” and to the development of the insurance industry in China.

However, he added, foreign companies are consistently playing on an uneven field because the Chinese government has not lived up to the agreements it made in order to secure the nation's entry into the World Trade Organization.

Specifically, he mentioned six areas in which the Chinese government has placed burdensome requirements on foreign companies that place them at a disadvantage.

These include a requirement that foreign insurers obtain a license for each branch location they wish to open, and reinsurance rules that favor Chinese insurers.

Additionally, he noted that the Chinese government encourages foreign insurers to establish Chinese subsidiaries, but the approval process for those subsidiaries moves very slowly. Although Chinese law states that the approval should be granted within 60 days, Mr. Snyder said that some companies have waited as long as a year for their approval.

Chinese regulators are also slow at times to approve new types of coverage that already exist in other developed nations, Mr. Snyder noted, and also place restrictions on how foreign insurers can invest their assets.

In addition, he said that China “has not committed to a consistent regulatory process,” and that the rulemaking procedures does not consistently allow for public notice and comment.

In talks with Chinese regulators, Mr. Snyder said that they often claim the market is more open than it actually is, citing the number of companies that have established a presence in China.

“They tend to argue statistics,” he said, but fail to acknowledge that the foreign insurers operating in China operate at a disadvantage.

Mr. Snyder said the AIA has been documenting specific instances where it believes China has failed to live up to its obligations, but that any formal WTO action “would be a last resort.”

Instead, he said that the AIA will continue to push for a diplomatic solution through an ongoing joint effort between the insurance industry, the U.S. government and the National Association of Insurance Commissioners.

Mr. Snyder said that effort has been “a wonderful example” of public and private sector cooperation, and praised the work being done by the U.S. Trade Representative, the Departments of State and Commerce, and NAIC leaders who are helping to provide technical assistance to the Chinese regulators.

Special Reports /

Insurers Seeking End to China Business Snags

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