U.S. insurers, eager to expand globally and tap new markets, are finding their efforts tripped up in many regions by local speed bumps in the form of legal or even unofficial regulatory hurdles.

The past 12 months have been "a very active year" in terms of trying to advance the industry's agenda on a global scale, according to David Snyder, vice president and assistant general counsel for the American Insurance Association. "Companies are really interested in every part of the globe."

There continues to be a great deal of interest, Mr. Snyder noted, in increasing the industry's reach in major Asian markets, such as China, India and Korea. However, he added, there are still problems in some of these markets--mainly "protectionism in various guises, usually in the form of domestic regulations."

China continues to have restrictions over how much a company can expand within its borders, as well as on the products they can offer. As much potential as the Chinese market holds, and as much work that has been put into negotiating with Chinese regulators, Mr. Snyder said "there continues to be extreme difficulties" with Chinese regulators, who are "acting out of protectionist motives."

Such problems have stifled the ability of insurers to do business in China, while keeping the Chinese market from living up to its potential, industry officials complain.

"It is a market that should be much larger than it is," according to Mr. Snyder. Obstructionism on the part of the Chinese Regulatory Commission even runs counter to some of the policy statements coming from top Chinese leaders, he noted, who have said they want to expand the availability of financial services products to their citizens.

Despite such problems, Mr. Snyder said AIA appreciates the work that has been done by various U.S. representatives in negotiating with the Chinese. Talks--known as the Strategic Economic Dialogue--have been ongoing, and the Chinese have offered some assurance they will address issues raised by the insurance industry and U.S. negotiators.

Another major Asian market--India--faces similar problems. Foreign companies there, according to Mr. Snyder, are barred from owning a stake of more than 26 percent of a domestic insurer. "Repeated efforts" to fix that, he said, "have come to naught for political reasons."

There have been some areas of progress, however, he said, noting success in discussions with Korea that should make that market more attractive to U.S. insurers, as well as in the Middle East, where Mr. Snyder noted companies have begun taking an interest in "Takufel"--a sort of cooperative insurance product that has won the approval of Islamic religious authorities.

Russia, he said, is also emerging as a "potentially very significant market"--which has come as something of a surprise. "If you had mentioned Russia 10 years ago, you would've gotten a blank stare," he noted.

Overall, Mr. Snyder said insurers "don't yet have an international standard on transparency" in many emerging markets that would help ensure companies are given a chance to have their voices heard in the regulatory process, rather than rules being simply handed down for insurers to follow.

Additionally, he said insurers "continue to be concerned about the lack of progress in Geneva" regarding the World Trade Organization's Doha round of negotiations.

Much of the success thus far has been the result of bilateral agreements between the United States and other countries.

"For many emerging markets," however, according to Mr. Snyder, "there needs to be something from the WTO." The Doha round has been held up by agricultural issues, but Mr. Snyder remains optimistic that some of those conflicts could be resolved in the near future, clearing the way for insurance and financial services disputes to be addressed.

Overall, he said, "it's a generally upbeat picture, with some continuing protectionist problems."

For the companies providing coverage, Mr. Snyder said AIA and the industry are working to make it easier to do business abroad. Among the goals, he said, is establishment of "cross-border" coverage that would allow an insurer to offer multinational products for marine, aviation and other transport insurance.

Additionally, he said the industry is looking to establish a "global contract" that would allow large companies to buy protection for operations in multiple nations.

There are problems in realizing such goals, however, warned Mr. Snyder--specifically in trying to reach a uniform standard of recognition among countries that would allow them to recognize an insurance company and its coverage across borders, without the need for burdensome and potentially duplicative regulation.

Special Reports /

U.S. Insurers Hitting Speed Bumps Abroad

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