[Congressional Record Volume 140, Number 24 (Tuesday, March 8, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 8, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
    INTRODUCTION OF THE FAIR TRADE IN INSURANCE SERVICES ACT OF 1994

                                 ______


                          HON. JAMES A. LEACH

                                of iowa

                    in the house of representatives

                         Tuesday, March 8, 1994

  Mr. LEACH. Mr. Speaker, today I am introducing a bill to promote free 
and fair trade for our insurance companies who operate overseas. This 
legislation would establish a framework through which the U.S. 
Government can focus on opening markets for an industry in which 
America has excelled worldwide. In fact, there is no industry in 
America where we are more dominant in sophistication compared to the 
rest of the world than the insurance industry. The U.S. Government has 
as one of its highest priorities to insure that in a competitive 
international environment, our insurance companies can compete on an 
equal basis. In this regard, it should be stressed that it is in the 
best interest of world commerce that no insurance companies are 
afforded a competitive advantage due to trade barriers or unfair trade 
practices.
  Insurance has been held as one of four priority industries on which 
the United States and Japan have been focusing during the recent 1994 
trade talks. In fact, foreign firms hold about 2 percent of Japan's 
insurance market, the world's second-largest insurance market. In the 
United States and Europe, foreign insurers average between 10 percent 
and 33 percent of the market. Other foreign markets also have been 
specifically cited as being relatively closed to U.S. insurance 
operations. For these reasons, it is essential that insurance be 
included in fair trade in financial services initiatives being 
considered this Congress. My bill brings insurance directly into these 
discussions, and incorporates into statute the concept of reciprocal 
national treatment for insurance.
  In brief, this bill requires the President to identify those 
countries who do not accord effective national treatment to U.S. 
insurance organizations and determine whether the denial has a 
significant adverse impact on such organizations. If the President 
determines that the denial has a significant adverse impact, and after 
the USTR has initiated negotiations with that country, the President 
may publish that determination in the Federal Register. Certain 
exceptions are granted to those countries who are parties to certain 
national treatment commitments and other applicable bilateral and 
multilateral agreements. Existing insurance operations are also 
grandfathered. If negotiations do not prove fruitful, the President may 
recommend sanctions against insurance or other operations of the 
foreign country. To accomplish such a goal, the bill establishes a 
Federal registration mechanism through which sanctions can be imposed.
  In closing, I look forward to continuing to work with my colleague, 
Mr. Schumer, and others on fair trade legislation this Congress in an 
effort to effectuate the principle of equal treatment for U.S. 
financial firms, thereby lowering trade barriers throughout the 
financial services world.

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