Two insurance trade organizations urged today that the government take steps to bring down worldwide barriers to the property-casualty insurance business at home and abroad.

Comments by the Council of Insurance Agents and Brokers and the American Insurance Association were made at a session in Washington where the International Trade Commission took testimony on “Property and Casualty Insurance Services: Competitive Conditions in Foreign Markets.”

The commission is an independent quasi-judicial federal agency that provides trade policy advice to both the legislative and executive branches of government.

David Snyder, AIA vice president and assistant general counsel, said there was no lack of desire to expand business by insurers, but in addition to economic conditions, they are stymied by “a patchwork of protectionist domestic regulation that hinders the growth of the private insurance markets.”

The worst regulations, he said, “restrict the mode of establishment, discriminate against foreign insurers, interfere with free market pricing, prevent necessary cross-border insurance for global commercial enterprises, and restrict the introduction of products to the marketplace.”

According to Mr. Snyder, “There is a huge, unrealized potential for the global expansion of property and casualty insurance and the loss reduction and compensation that insurers provide.”

Discussing problems abroad, Mr. Snyder mentioned restrictions on foreign ownership and operations in India, Japan, Korea, Malaysia, Costa Rica and United Arab Emirates.

Michael Moran, executive vice president for Aon Risk Services, speaking for the CIAB, mentioned problems in China as well.

Great progress has been made in opening foreign markets to U.S. insurance intermediaries, said Mr. Moran, but barriers still exist that impede their ability to provide services and products needed by clients around the world.

He said the emergence of a strong distribution network will drive the development of the insurance industry in China, India and the Middle East and will help those countries and regions realize the benefits of a strong insurance market.

“A strong insurance market efficiently transfers risk as well as facilitates asset accumulation, resource and infrastructure development,” Mr. Moran said.

The hearing was held in response to a letter from U.S. Trade Representative Susan C. Schwab asking the ITC to examine factors affecting insurance supply and demand in global markets.

Mr. Moran said in China, local brokers are held to a lower standard of corporate governance than foreign firms, and local companies are audited less stringently than foreign companies.

He said that often leads to local companies acting in ways that don't reflect well on the industry and puts foreign firms at a competitive disadvantage.

The Council also stressed the importance of being able to place master policies for clients with international risks in multiple jurisdictions. CIAB said many countries restrict cross-border placement by requiring the risk to be covered by local carriers, which defeats the purpose of global policies, particularly if the local market is limited in coverages it can handle.

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