Congress took an important step toward opening the world’s insurance markets when it approved the Central American Free Trade Agreement (CAFTA), the American Insurance Association said.
“Costa Rica, one of the nation’s that will participate in CAFTA, has one of the world’s last government-owned insurance monopolies. This agreement will gradually open a private insurance market in that country, doing away with the state-run system,” stated David Snyder, AIA vice president and assistant general counsel.
A high level of regulatory transparency is one of the most important provisions. This includes notice and comment rulemaking–meaning any proposed regulation or rule must be published, time must be allowed for a public comment period, and regulators would have to respond to those comments, Snyder explained.
“CAFTA’s insurance provisions will foster overall economic development, reduce unnecessary loss of life and property, and help provide critical infrastructure such as roads, bridges, libraries and hospitals,” Snyder said.
The Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua, are the other nations to sign CAFTA. President Bush is expected to sign the CAFTA legislation.
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