U.S. insurers seeking to wed non-U.S. suitors could face more scrutiny from a secretive national security review panel, not less.
Witnesses and lawmakers raised that possibility Tuesday, at a hearing organized by the House Financial Services monetary policy and trade subcommittee on the future of the Committee on Foreign Investment in the United States (CFIUS).
CFIUS reviews international mergers and acquisitions involving U.S. targets for potential national security concerns.
For life and health insurance agents, CFIUS may be best known as a federal agency slowing efforts by China Oceanwide Holdings Group Co. Ltd. to acquire Richmond, Virginia-based Genworth Financial Inc. Genworth — a major issuer of life insurance, annuities and long-term care insurance — has reported, in general statements included in documents filed with the U.S. Securities and Exchange Commission, that CFIUS, that CFIUS has expressed concerns about control over policyholders’ personally identifiable information.
At the House subcommittee hearing, lawmakers and witnesses focused mainly on matters such as changes in control over U.S. infrastructure and information technology.
But the participants also touched on other matters, such as whether Chinese deals for U.S. movie theaters could limit the kinds of films U.S. filmmakers can get distributed.
Derek Scissors, an analyst at the American Enterprise Institute, talked briefly about the concerns related to control over consumers’ personal information.
“A number of Chinese companies are now legitimately interested in acquiring U.S. counterparts which hold personal data for thousands of Americans or more,” Scissors said.
The problem is that, even if a Chinese company is privately owned, the Chinese government can get the personal data from the Chinese company, Scissors said.
The CFIUS is overloaded and takes a long time to rule on deals, Scissors said.
He said companies involved in deals often take use the delays as an excuse to withdraw, revise and re-file their applications, in some cases to try to get around CFIUS consumer data control concerns.