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 Thursday.
“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 throughout the region is one of the most important provisions CAFTA provides. 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.
Along with providing entry for U.S. insurers, Snyder said “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.”
The Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua, are the other nations to sign CAFTA. “While this pact is important in its own right, it is viewed as a litmus test for the future of all U.S. trade efforts,” Snyder added.
President Bush is expected to sign the CAFTA legislation. “We salute the administration’s leadership on this issue and look forward to continuing to work toward implementation of this important trade agreement,” added Drew Cantor, AIA vice president and director of federal affairs.
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