Today Congress will view the issue of whether the U.S. should grant Permanent Normal Trade Relations (PNTR) to China. This is the first of several possible hearings.
Congressional enactment of PNTR for China will allow U.S. companies to benefit from the sweeping market access agreement on insurance between the U.S. and China in November as a condition to China’s accession to the World Trade Organization (WTO).
The American Insurance Association (AIA) provided support for legislation to help accomplish this goal. In a letter to House Ways and Means Committee Chairman Bill Archer, AIA President Robert Vagley stated that “U.S. property and casualty companies welcome this historic opportunity to truly open the Chinese insurance market and to invest significant resources and expertise there.”
The U.S.-China agreement on insurance contains vast market access opportunities for U.S. insurers, including:
– Elimination of numeric restrictions and economic needs criteria on the awarding of operating licenses in the country.
– The establishment of master policies, allowing a foreign insurance company to locate its physical operations in one Chinese city but sell products in other cities.
– The right to sell all non-life insurance products to both Chinese and foreign consumers in four years.
– A 51 percent ownership right for foreign, non-life insurance companies operating in China.
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