Lawmakers, industry and government officials pushed for supervisory harmony and a robust role and involvement by the U.S. Federal Insurance Office (FIO) abroad to increase international competitiveness for the U.S. insurance industry in hearing May 17 before a House Financial Services Committee panel.
Insurers, regulators and consumer advocates were united in testimony that emphasized working together break down barriers to create a level playing field for domestic insurers, and create more clarity, consistency and cohesion so insurers can expand their market abroad and create jobs domestically by decreasing costly and imposing supervisory burdens.
The testimony was before the Insurance, Housing and Community Opportunity Subcommittee of the House Financial Services Committee, chaired by Rep. Judy Biggert, R-Ill.who said in her opening statement she wants to know what more Congress can do to help the insurance industry and help it remain competitive abroad.
Insurance executives pushed for the use of the federal megaphone of Congress, FIO, the office of United States Trade Representative (USTR) and other federal officials to emphasize the need to resolve conflicts over trade, transparency, capital standards, conflicting regulatory standards and other supervisory and free market concerns.
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FIO Director Michael McRaith testified FIO’s priorities were a strong American economy and job opportunities and spoke of a recent trip to China with Treasury Secretary Timothy Geithner to discuss on insurance trade issues.
The force and promise of FIO was repeatedly trumpeted in testimony and throughout the hearing. Indeed, there was a chorus of support for FIO’s role internationally and even domestically from all quarters.
“The FIO can be of particular help in ensuring the USTR’s success by using its bully pulpit to advance the interests of the U.S. insurance sector and by coordinating efforts to resolve any conflicts between the federal government and states over insurance, stated The Council of Insurance Agents and Brokers (CIAB) in submitted testimony.
FIO has the ability to enter into binding agreements with countries on trade issues and we hope Director McRaith can work settlement of issues rather than just discussion, Transatlantic Holdings Inc. CEO Michael C. Sapnar told the panel.
Another witness pushed for greater state regulatory uniformity lead by FIO.
In many foreign markets there are issues with market entry, product approvals, commitment of capital, and operations making business less predictable, according to MetLife, which trumpeted free trade agreements or FTAs to advance the industry’s cause, more business overseas and more jobs domestically.
“The hearing helped assured that insurance issues have a high place on the US international engagement agenda and puts outs the Congress on the field of play in representing U.S. interest, along with the FIO, USTR, other federal agencies and the NAIC,” said David Snyder, vice president of the American Insurance Association (AIA).
“To tap that overseas growth, it is essential to have free and open trade between nations, and agreements that recognize the importance of the services sector and create level playing fields for our business to compete in vibrant markets around the world. This is core to free trade agreements and why MetLife strongly supports the recently enacted free trade agreements with Colombia, Panama, and South Korea, and the pending TPP agreement,” testified MetLife Vice Chairman William Toppeta.
TTP is the Trans Pacific Partnership, a high-standard trade agreement being negotiated between the US, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam.
“Under the Kore a US Free Trade Agreement (KORUS FTA), for instance, US insurers will have notice of, and a more meaningful opportunity to comment on, Korea’s insurance regulations in a predictable manner and well in advance of these regulations taking effect,” Toppeta stated.
MetLife and the AIA, among others, pushed for Congress, FIO, the NAIC, and others to make US-European Union mutual understanding on solvency system a high priority. Solvency II has become somewhat bogged down in the debate about equivalence of structures in addition to outcomes, and the US industry and regulators have not been ready to sign on to a European solvency structure. See: http://www.lifehealthpro.com/2012/04/16/solvency-ii-what-it-means-in-europe-and-us-today