[Congressional Record Volume 153, Number 107 (Friday, June 29, 2007)]
[Senate]
[Page S8740]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        CURRENCY REFORM AND FINANCIAL MARKETS ACCESS ACT OF 2007

  Mr. DODD. Madam President, I ask unanimous consent that the attached 
letter from the American Council of Life Insurers be printed in the 
Record, along with the materials I submitted for S. 1677, the Currency 
Reform and Financial Markets Access Act of 2007.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                            American Council on Life Insurers,

                                    Washington, DC, June 21, 2007.
     Senator Christopher Dodd,
     Senate Banking Committee, Dirksen Senate Building, 
         Washington, DC.
       Dear Chairman Dodd: I am writing on behalf of ACLI member 
     companies to applaud the focus you have given to market 
     access in Title II of the Currency Reform Act and Market 
     Access Act of 2007. I commend your bipartisan efforts to 
     introduce legislation that recognizes the importance of true 
     and improved market access for all U.S. financial services 
     firms to China's markets.
       A more effective, modern and efficient financial sector in 
     China is a prerequisite to successfully addressing a shift in 
     China's export-driven economic stance globally, as well as to 
     ameliorating issues that have complicated the U.S.-China 
     economic relationship, China's WTO implementation and the 
     trade imbalance.
       For ACLI member companies, access to China's market cannot 
     be overstated. China is the world's 11th largest insurance 
     market by total premium volume (8th by life insurance), up 
     from 16th in 2000, with premium volumes of almost $68 billion 
     in 2006--life premiums accounted for the lion's share at $48 
     billion, a near threefold increase since 2001. Although 
     ranked in the top ten globally, China's life market is under-
     penetrated. As China's burgeoning middle class grows, incomes 
     grow, and consumptions patterns change, average yearly per 
     capita expenditures on life insurance will surge--predictions 
     are that China will rank among the world's largest life 
     insurance markets by 2020.
       While China has come a long way in opening up its life 
     insurance market, in another arena, up until last year, there 
     was no formal supplementary retirement savings program in 
     China despite the fact that it began dismantling its ``cradle 
     to grave'' social safety net beginning in the 1980s. Pensions 
     are largely unfunded, under-funded or non-existent for scores 
     of citizens. China is only now beginning to appreciate the 
     critical role that enterprise annuities needs to play in 
     providing retirement security to Chinese households.
       To address the pension gap, Chinese regulators started in 
     the spring of 2005 to establish an Enterprise Annuity Pension 
     System (EA)--as a second pillar individual account, defined 
     contribution retirement program (similar to our 401(k)). 
     Conservatively, our estimates indicate that within 10 years 
     the assets under management for this program should be close 
     to $100 billion. Within 25 years they should reach $1 
     trillion. While a number of foreign firms have been licensed 
     to provide custodial, trustee, management, and related 
     services for pension assets, no American firm has been 
     licensed to underwrite pension products directly.
       Participating in the type of growth noted above is 
     paramount for firms in worldwide life insurance and 
     retirement benefits leadership positions. It is equally 
     important for China's economic leadership, regulators and 
     industry to view our greater involvement and participation as 
     win-win for the economy, consumers, and capital markets 
     generally.
       For these reasons, I look forward to working with you on 
     efforts such as this to shine light on market access issues 
     that can be addressed in China to improve opportunities for 
     ACLI companies to participate in the Chinese market.
           Sincerely,
     Frank Keating.

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