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The American Insurance Association noted that a new free trade agreement with Central American nations, which is expected to be presented to Congress early next year, “will encourage economic growth and help U.S. insurers expand.”
In the statement, issued Wednesday, the AIA praised the U.S. Trade Representative (USTR) for “negotiating an agreement that opens up Central American companies to greater insurance competition.” It said the pact would “allow all modes of establishing insurance enterprising – branching, joint ventures and 100 percent foreign-owned subsidiaries – after a relatively brief transition period. It also commits countries to an open and transparent regulatory process.”
David Snyder, AIA vice president and assistant general counsel, commented: “This is a very positive agreement, not only for U.S. business, but also because it will encourage growth in the economies of Central America. Insurance plays a key role in a country’s economic development by encouraging entrepreneurs to take on risk and to allow capital to be raised to build infrastructure.”
The AIA also commended USTR “for resisting the inclusion of Costa Rica in the current agreement because of that country’s refusal to open up its insurance markets, among other reasons. Negotiations with Costa Rica are continuing, and it may be included in a future Central American Free Trade Agreement.”
The bulletin noted that the AIA had “participated in numerous meetings with USTR and Central American delegations, exchanging information and views about insurance markets and regulatory schemes.”