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75–735 PDF 2012

U.S. INSURANCE SECTOR: INTERNATIONAL 

COMPETITIVENESS AND JOBS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

INSURANCE, HOUSING AND 

COMMUNITY OPPORTUNITY 

OF THE

COMMITTEE ON FINANCIAL SERVICES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

MAY 17, 2012 

Printed for the use of the Committee on Financial Services 

Serial No. 112–129 

( 

(II) 

HOUSE COMMITTEE ON FINANCIAL SERVICES 

SPENCER BACHUS, Alabama, Chairman 

JEB HENSARLING, Texas, Vice Chairman 

PETER T. KING, New York 

EDWARD R. ROYCE, California 

FRANK D. LUCAS, Oklahoma 

RON PAUL, Texas 

DONALD A. MANZULLO, Illinois 

WALTER B. JONES, North Carolina 

JUDY BIGGERT, Illinois 

GARY G. MILLER, California 

SHELLEY MOORE CAPITO, West Virginia 

SCOTT GARRETT, New Jersey 

RANDY NEUGEBAUER, Texas 

PATRICK T. MCHENRY, North Carolina 

JOHN CAMPBELL, California 

MICHELE BACHMANN, Minnesota 

THADDEUS G. McCOTTER, Michigan 

KEVIN McCARTHY, California 

STEVAN PEARCE, New Mexico 

BILL POSEY, Florida 

MICHAEL G. FITZPATRICK, Pennsylvania 

LYNN A. WESTMORELAND, Georgia 

BLAINE LUETKEMEYER, Missouri 

BILL HUIZENGA, Michigan 

SEAN P. DUFFY, Wisconsin 

NAN A. S. HAYWORTH, New York 

JAMES B. RENACCI, Ohio 

ROBERT HURT, Virginia 

ROBERT J. DOLD, Illinois 

DAVID SCHWEIKERT, Arizona 

MICHAEL G. GRIMM, New York 

FRANCISCO ‘‘QUICO’’ CANSECO, Texas 

STEVE STIVERS, Ohio 

STEPHEN LEE FINCHER, Tennessee 

BARNEY FRANK, Massachusetts, Ranking 

Member 

MAXINE WATERS, California 

CAROLYN B. MALONEY, New York 

LUIS V. GUTIERREZ, Illinois 

NYDIA M. VELA ́ ZQUEZ, New York 

MELVIN L. WATT, North Carolina 

GARY L. ACKERMAN, New York 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

MICHAEL E. CAPUANO, Massachusetts 

RUBE ́ N HINOJOSA, Texas 

WM. LACY CLAY, Missouri 

CAROLYN MCCARTHY, New York 

JOE BACA, California 

STEPHEN F. LYNCH, Massachusetts 

BRAD MILLER, North Carolina 

DAVID SCOTT, Georgia 

AL GREEN, Texas 

EMANUEL CLEAVER, Missouri 

GWEN MOORE, Wisconsin 

KEITH ELLISON, Minnesota 

ED PERLMUTTER, Colorado 

JOE DONNELLY, Indiana 

ANDRE ́ CARSON, Indiana 

JAMES A. HIMES, Connecticut 

GARY C. PETERS, Michigan 

JOHN C. CARNEY, JR., Delaware 

JAMES H. CLINGER, Staff Director and Chief Counsel 

(III) 

SUBCOMMITTEE ON INSURANCE, HOUSING AND COMMUNITY OPPORTUNITY

JUDY BIGGERT, Illinois, Chairman 

ROBERT HURT, Virginia, Vice Chairman 

GARY G. MILLER, California 

SHELLEY MOORE CAPITO, West Virginia 

SCOTT GARRETT, New Jersey 

PATRICK T. MCHENRY, North Carolina 

LYNN A. WESTMORELAND, Georgia 

SEAN P. DUFFY, Wisconsin 

ROBERT J. DOLD, Illinois 

STEVE STIVERS, Ohio 

LUIS V. GUTIERREZ, Illinois, Ranking 

Member 

MAXINE WATERS, California 

NYDIA M. VELA ́ ZQUEZ, New York 

EMANUEL CLEAVER, Missouri 

WM. LACY CLAY, Missouri 

MELVIN L. WATT, North Carolina 

BRAD SHERMAN, California 

MICHAEL E. CAPUANO, Massachusetts 

(V) 

C O N T E N T S 

Page 

Hearing held on: 

May 17, 2012 ..................................................................................................... 1 

Appendix: 

May 17, 2012 ..................................................................................................... 29 

WITNESSES 

THURSDAY, MAY 17, 2012 

Bartlett, Hon. Steve, President and Chief Executive Officer, The Financial 

Services Roundtable ............................................................................................. 8 

Kochenburger, Peter, Executive Director, Insurance Law Center, and Associate Clinical Professor of Law, the University of Connecticut School of 

Law ........................................................................................................................ 10 

McCarty, Hon. Kevin M., Commissioner, Florida Office of Insurance Regulation, on behalf of the National Association of Insurance Commissioners 

(NAIC) ................................................................................................................... 6 

McRaith, Hon. Michael T., Director, Federal Insurance Office, U.S. Department of the Treasury ........................................................................................... 5 

O’Bryant, Allan E., Executive Vice President, and Head of International 

Markets and Operations, Reinsurance Group of America, Inc. (RGA), on 

behalf of the Reinsurance Association of America (RAA) ................................. 12 

Sapnar, Michael C., President and Chief Executive Officer, Transatlantic 

Reinsurance Company, on behalf of the Reinsurance Association of America 

(RAA) ..................................................................................................................... 14 

Toppeta, William J., Vice Chairman, MetLife, Inc. .............................................. 15 

Vastine, J. Robert, President, Coalition of Service Industries (CSI) ................... 17 

APPENDIX 

Prepared statements: 

Dold, Hon. Robert ............................................................................................. 30 

Bartlett, Hon. Steve ......................................................................................... 32 

Kochenburger, Peter ......................................................................................... 38 

McCarty, Hon. Kevin M. .................................................................................. 46 

McRaith, Hon. Michael T. ................................................................................ 57 

O’Bryant, Allan E. ............................................................................................ 64 

Sapnar, Michael C. ........................................................................................... 76 

Toppeta, William J. .......................................................................................... 93 

Vastine, J. Robert ............................................................................................. 104 

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

Gutierrez, Hon. Luis: 

Letter to Treasury Secretary Timothy F. Geithner from the Financial 

Services Roundtable ...................................................................................... 112 

Hurt, Hon. Robert: 

Written statement of the American Insurance Association .......................... 115 

Written statement of The Council of Insurance Agents and Brokers .......... 121 

March 2009 report of the United States International Trade Commission 

entitled, ‘‘Property and Casualty Insurance Services: Competitive Conditions in Foreign Markets’’ ......................................................................... 125 

Written statement of the National Association of Mutual Insurance Companies (NAMIC) ............................................................................................ 233 

Page

VI 

Hurt, Hon. Robert—Continued 

Written statement of the Property Casualty Insurers Association of 

America (PCI) ................................................................................................ 237 

(1) 

U.S. INSURANCE SECTOR: INTERNATIONAL 

COMPETITIVENESS AND JOBS 

Thursday, May 17, 2012 

U.S. HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON INSURANCE, HOUSING

AND COMMUNITY OPPORTUNITY, COMMITTEE ON FINANCIAL SERVICES, Washington, D.C. 

The subcommittee met, pursuant to notice, at 2 p.m., in room 

2128, Rayburn House Office Building, Hon. Judy Biggert [chairwoman of the subcommittee] presiding. 

Members present: Representatives Biggert, Hurt, Capito, Dold; 

Gutierrez, Cleaver, Clay, Watt, and Sherman. 

Chairwoman BIGGERT. This hearing of the Subcommittee on Insurance, Housing and Community Opportunity will come to order. 

We will get through our opening statements and then hear from 

all the witnesses, and we thank you. 

And thank you, Director McRaith, for agreeing to have the two 

panels together. I think that this will work out well. So, thank you 

very much. 

And good afternoon. I would like to welcome our distinguished 

panel of witnesses to today’s hearing. 

As our subcommittee and others hold hearings, particularly on 

Dodd-Frank, one distinction has become increasingly clear: Insurance is not banking. We all saw how well the U.S. insurance sector, 

in contrast to the banking sector, weathered the financial crisis. 

That point was highlighted in the first annual report issued by the 

U.S. Financial Stability Oversight Council (FSOC). 

Nonetheless, domestic regulators continue to press for a bankcentric model of regulation for insurance providers. And today, we 

are expanding our oversight beyond our borders to international 

issues that have created uncertainty for U.S. insurance and reinsurance companies. Are we doing everything that we can to help 

our American businesses compete, export services, and create jobs 

here in the United States? I think we can do more. 

According to the Bureau of Economic Analysis, in 2011 the 

United States imported more insurance services than it exported, 

with U.S. exports totaling $15.4 billion and U.S. imports totaling 

$57.6 billion. Contrast that with the fact that other noninsurance 

financial services exports totaled $73 billion and imports totaled 

$15.1 billion. 

For our insurers and the domestic jobs they create, we must do 

better. Don’t get me wrong, the creation of the Federal Insurance 

Office, or FIO, which I supported, will help our U.S. insurers comVerDate Nov 24 2008 18:57 Sep 25, 2012 Jkt 075735 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 K:\DOCS\75735.TXT TERRIE
2 

pete abroad. And other organizations are working toward the same 

goal, including the National Association of Insurance Commissioners, or NAIC; State regulators; the U.S. Trade Representative; 

the Treasury and State Departments; and other insurance trade 

associations, including the American Council for Life Insurers, the 

American Insurance Association, the Reinsurance Association of 

America, and many others. 

But we can do more to help our insurers remain competitive and 

gain access to new markets abroad. According to a 2009 report 

issued by the U.S. International Trade Commission, liberalization 

of property-casualty foreign insurance markets would result in 

greater access for U.S. insurers, billions of dollars in increased 

sales, and increased employment at U.S.-based companies, among 

other economic benefits. 

That is why during today’s hearing, we will examine the international competitiveness of U.S.-domiciled insurance and reinsurance companies. We will hear from witnesses about the opportunities and challenges that regulatory changes, free trade agreements, 

and state-owned enterprises present to U.S. companies. And we 

will hear about the activities undertaken by our U.S. insurance experts in a variety of forums that establish international insurance 

standards and regulations. 

I look forward to today’s hearing, and again, I welcome our witnesses. 

And, with that, I will turn to our ranking member, Mr. Gutierrez, for his opening statement. 

Mr. GUTIERREZ. Thank you, Madam Chairwoman, and thank you 

for holding this important hearing. I also thank the witnesses. 

I think it is very important for our Members and the public to 

learn of the progress that has been made since the creation of the 

Federal Insurance Office. This is one area of the Dodd-Frank law 

where there is a great deal of consensus on both sides of the aisle 

and between the private sector and the Federal Government. 

Most observers of the international insurance sector agree that 

Federal action is needed in order to assist our U.S.-domiciled insurance companies and their global affiliates to achieve much more equitable treatment in the global insurance marketplace. Not including health insurance, we in the United States account for at least 

27 percent of all premiums in bulk volume, making the United 

States the world’s largest single country insurance market. 

Unfortunately, our exports and even affiliate sales of insurance 

products do not correspond to our share of premium space. In fact, 

we have a serious trade imbalance in international insurance, and 

the United States receives a relatively low proportion of its total 

insurance revenue from international sources. As with other sectors 

of the economy, the world is quickly growing smaller and much 

more complex. The extreme complexity of modern economies presents this Congress, as well as regulators and supervisors, with 

enormous challenges that need to be met head-on if we are to avoid 

a repeat of the recent and continuing economic issues. 

In order to assist the U.S.-domiciled insurance industry achieve 

a level playing field both domestically and internationally, Congress created FIO. I am pleased that its first Director, who is here 

3 

with us this afternoon, is former State of Illinois Insurance Commissioner Michael McRaith. 

And I am glad to welcome you as one of our distinguished witnesses today, Mr. McRaith. I am very much looking forward to 

hearing your testimony about the achievements of FIO in the international arena during the last few months since its inception. 

Madam Chairwoman, I would request unanimous consent to introduce into the record the March 14, 2012, letter from the Financial Services Roundtable to Treasury Secretary Geithner on international insurance issues and the role of FIO. 

Chairwoman BIGGERT. Without objection, it is so ordered. 

Mr. GUTIERREZ. Thank you. 

I think it is particularly important because this letter does speak 

to how there really is broad support. It says, ‘‘It has been clear for 

some time that the business of insurance is vitally important to the 

underpinnings of our national economy and should receive proper 

consideration at the Federal level. Congress recognized the Federal 

Government should develop more expertise on insurance issues by 

including in Dodd-Frank the creation of FIO, and we support full 

funding and staffing. The establishment of FIO for the first time 

places an expert in the Department of the Treasury to increase 

Federal understanding of the business of insurance, an industry 

that is unique from other financial services, both in terms of its 

business model and regulatory requirements.’’ 

I thank the gentlelady. 

Chairwoman BIGGERT. Thank you. 

I now recognize the gentlelady from West Virginia for 21⁄2 minutes. 

Mrs. CAPITO. Thank you, Madam Chairwoman. 

I would like to thank Chairwoman Biggert and Ranking Member 

Gutierrez for continuing what is an important debate under this 

subcommittee’s jurisdiction, and that is the international competitiveness of the U.S. insurance industry. 

I would like to thank our witnesses before us today, and I appreciate their input. 

I would like to welcome Director McRaith back to the committee 

and I look forward to hearing his testimony on the progress of the 

Federal Insurance Office and his office’s representation of the 

United States in the international community. I am interested to 

hear how Mr. McRaith uses his office’s broad authorities in international matters and also how the office consults with States on 

issues of domestic and international importance. 

We all know that the Dodd-Frank Act was implemented to address the flaws in our banking and security systems that led to the 

financial collapse of 2008. Throughout that time, however, the insurance industry as a whole was able to uphold a stable presence 

and was expected to be untouched by many of the laws and regulations implemented in the Act. 

Nevertheless, we are seeing that Dodd-Frank could have a far 

greater impact on many other parts of the economy than anticipated, including the insurance sector. The question for me is, will 

domestic regulations called for by provisions in Dodd-Frank adversely affect the industry and U.S. participation in the global market? 

4 

FIO’s voice in international regulatory affairs will be very significant, as effective and globally consistent standards could allow our 

U.S. markets to grow internationally without losing efficiencies. 

While the EU is currently modernizing its insurance industry— 

they have a lot on their hands, I would say—our understanding of 

how their structure will converge with ours can have a great impact, again, on our competitiveness abroad. 

In these deliberations, I think we should be mindful of what is 

in the best interests of the United States and our consumers. Our 

system of State-based regulation has proven to be a dependable 

and important model for the insurance industry, so it is important 

to keep that in mind when adopting international financial standards. Issues such as heightened capital requirements, varying accounting practices, and assessment of risk are all issues to be considered in an international framework, and how they might inhibit 

market access. 

Again, I would like to thank the Members for being here, and I 

would like to thank the chairwoman for holding the hearing. 

Chairwoman BIGGERT. Thank you. 

We have been called for our pesky votes, but I think I will just 

introduce all of the witnesses ahead of time, so that when we come 

back, we will immediately start with your testimony. However, we 

have four bills on the Floor, and the fourth one is the national flood 

insurance extension, so I am not leaving early from that. That bill 

is very important. 

We have with us the Honorable Michael McRaith, Director, Federal Insurance Office, U.S. Department of the Treasury; the Honorable Kevin McCarty, insurance commissioner, Florida Office of Insurance Regulation, on behalf of the National Association of Insurance Commissioners; the Honorable Steve Bartlett, president and 

chief executive officer, The Financial Services Roundtable; Mr. 

Peter Kochenburger, executive director, Insurance Law Center, and 

associate clinical professor of law and director of graduate programs, University of Connecticut School of Law; Mr. Allan E. 

O’Bryant, executive vice president, and head of international markets and operations, Reinsurance Group of America, on behalf of 

the Reinsurance Association of America; Mr. Michael Sapnar, president and chief executive officer, Transatlantic Reinsurance Company, on behalf of the Reinsurance Association of America; Mr. 

William Toppeta, vice chairman, MetLife, Incorporated; and Mr. J. 

Robert Vastine, president, the Coalition of Service Industries. 

So we will recess and come back after the four votes—I don’t 

know how long it will take, but at least 20 to 30 minutes. Thank 

you so much. 

[recess] 

Chairwoman BIGGERT. I think everybody will be back in a few 

minutes, but let’s get started. I am happy to announce that the bill 

passed. So, that is just one more step in a long road. 

Director McRaith, you are now recognized for 5 minutes. 

5 

STATEMENT OF THE HONORABLE MICHAEL T. MCRAITH, DIRECTOR, FEDERAL INSURANCE OFFICE, U.S. DEPARTMENT 

OF THE TREASURY 

Mr. MCRAITH. Chairwoman Biggert, Ranking Member Gutierrez, 

and members of the subcommittee, thank you for inviting me to 

testify today. I am Michael McRaith, Director of the Federal Insurance Office in Treasury. 

First, we know of the interest in our modernization report. I 

want to acknowledge that it is late. Once it is released in the near 

future, we trust you will find it to be of appropriate depth and 

quality. 

The Dodd-Frank Act created the Federal Insurance Office, or 

FIO, and gave it the authority to coordinate Federal efforts and develop Federal policy on prudential aspects of international insurance matters, including representing the United States at the 

International Association of Insurance Supervisors (IAIS). As an office within Treasury, FIO is well-positioned to express U.S. views 

and to work effectively with our international counterparts. As we 

fulfill our statutory mandate, we will work and consult with Commissioner McCarty and his State regulator colleagues as well as 

other Federal agencies and interested parties. 

The insurance sector is critical to the U.S. economy as a risktransfer vehicle, as a participant in capital markets, and as an employer. As this hearing illustrates, FIO’s creation could not arrive 

at a better time. The United States comprises more than 27 percent of global premium volume and is a major source of revenue 

for international insurers. The U.S. market itself is growing more 

international, and insurers generate far more revenue now than 

ever before from outside the home country. With these realities, the 

need for Federal Government involvement is clear. 

FIO has been involved with the IAIS since last July, and joined 

the executive committee in February. The IAIS is developing a 

methodology to identify globally significant insurers. FIO is, of 

course, also a member of the Financial Stability Oversight Council, 

or FSOC. At the IAIS, FIO’s aim is to shape international consensus so that the IAIS criteria, methodology, and timing are 

aligned with the Council. 

We share industry concerns about the confidentiality of nonpublic data produced by insurers in support of the IAIS work and 

will address these concerns in the coming months. The IAIS is developing a common framework, or ComFrame, for the supervision 

of internationally active insurance groups. We support ComFrame 

because it will lead to improved cross-border supervision and understanding. 

In bilateral matters, FIO established in January an EU–U.S. insurance dialogue that is now led by a steering committee including 

FIO, our EU counterparts, and State regulators, including Commissioner McCarty. The EU Solvency II framework proposes an 

equivalence assessment of the U.S. regulatory system, a prospect 

causing uncertainty for the transatlantic insurance sector. 

We initiated the dialogue not to decide a winner, but to compare 

factually the two regulatory regimes. The steering committee has 

been engaged constructively and in good faith, meeting twice at 

Treasury, once in Basel, and next in Frankfurt. Our staffs have 

6 

been engaged with information exchange and analyses. After ample 

chance for public input, we will finish and define the EU–U.S. path 

forward by the end of this year. 

I recently participated in the U.S.-China Strategic and Economic 

Dialogue, or S&ED, the first of many bilateral exchanges on insurance supervision. Iowa Insurance Commissioner Voss attended the 

S&ED at Treasury’s invitation, and we enjoyed meeting Chairman 

Xiang of the China Insurance Regulatory Commission (CIRC). We 

look forward to fulfilling the commitment between CIRC and FIO 

to strengthen cooperation in the development and implementation 

of prudential regulation in the insurance sector. We applaud 

CIRC’s May 1st announcement that it will open its market to thirdparty auto liability insurers, and I am optimistic about the growth 

prospects for U.S. insurers and brokers in China. 

Issues in Brazil, Argentina, and India illustrate the need to develop, implement, and enforce international insurance core principles. 

To be clear, in every forum, FIO priorities will be a strong American economy, job opportunities for the American people, and market opportunities for U.S.-based brokers and insurers. Chairwoman 

Biggert, I reaffirm our commitment to work with and to support 

Congress and this committee on these international topics that are 

of great local and national importance. 

Thank you for your attention. I am happy to answer any questions. 

[The prepared statement of Director McRaith can be found on 

page 57 of the appendix.] 

Chairwoman BIGGERT. Thank you so much, Director. 

Mr. McCarty, you are recognized for 5 minutes. 

STATEMENT OF THE HONORABLE KEVIN M. MCCARTY, COMMISSIONER, FLORIDA OFFICE OF INSURANCE REGULATION, 

ON BEHALF OF THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS (NAIC) 

Mr. MCCARTY. Chairwoman Biggert, Ranking Member Gutierrez, 

and members of the subcommittee, thank you for the opportunity 

to testify today. 

Chairwoman Biggert, I want to again thank you for participating 

in our commissioners’ meeting last month. We appreciate your support and leadership. 

My name is Kevin McCarty. I am the insurance commissioner of 

the State of Florida and the NAIC president. I present this testimony on behalf of the NAIC. Today, I will provide the committee 

with an overview of the NAIC’s involvement in recent international 

discussions, including standard setting, trade and economic development, and enhancement of regulatory communications. 

As the United States is the world’s largest insurance market, 

with more than a third of the global market share, insurance is key 

to our economy. State regulators provide international leadership 

by setting strong standards and developing creative solutions to 

regulatory challenges while focusing on protecting our policyholders. 

As a founding member of the IAIS, State regulators and the 

NAIC staff serve in various leadership roles, ensuring our system 

7 

has a prominent voice as we discuss global insurance principles 

and standards. We look forward to hosting the IAIS annual conference here in Washington this October. 

We were integral in the development of the updated IAIS insurance core principles, which provide the basis for the IMF insurance-sector assessment. When the IMF last assessed the U.S. regulatory system in 2010, it found our strong regulatory system contributed to the overall resilience of the insurance sector during the 

financial crisis. An IAIS priority is the development of ComFrame 

for the supervision of internationally active insurance groups. If 

done right, ComFrame has the potential to create more robust 

oversight while respecting differences among jurisdictions. 

In addition to the IAIS, the NAIC is actively involved in the 

OECD and the Financial Stability Board and through the Joint 

Forum, currently chaired by NAIC CEO Dr. Terri Vaughan. 

We are pleased to work alongside my friend and colleague, FIO 

Director Mike McRaith, on many of the international efforts. FIO 

has an important role as a representative of the Federal Government in these discussions. We are building a constructive relationship, which is crucial since State regulators retain ultimate responsibility for implementing any new international standards. It remains critical that any discussions or agreements on regulatory 

prerogatives be made with the full cooperation of the States. 

The insurance sector plays a significant role in promoting economic development. This demands a level playing field here and 

abroad in order to create and protect jobs in the United States. 

With that in mind, international trade and trade agreements are 

very important. As the USTR negotiates agreements such as the 

ongoing TPP agreement, and seeks to improve market access for 

U.S. insurers, the NAIC provides necessary technical expertise and 

advice. 

Our partnership with the USTR dates back to the early 1990s, 

when NAFTA and GATT were negotiated. In providing expert guidance to the USTR for the last 2 decades, State regulators and the 

NAIC have sought to promote stable practices and emphasize the 

successful track record of the U.S. markets. We illustrate to our 

trading partners the importance of insurance to our economy in 

terms of jobs, economic output, and risk mitigation for consumers. 

Through the NAIC, State insurance supervisors are actively involved in technical assistance programs with foreign regulators. As 

we consider harmonization of approaches, we must remember that 

regulatory convergence should focus on outcomes and not prescriptive requirements or structures. 

A prime example of our work in this area is the decade-long 

NAIC–EU regulatory dialogue. These exchanges have been essential to enhancing supervisory understanding between our respective jurisdictions. Just last month, I joined several State regulators 

and our colleagues from FIO for a week of U.S.–EU events to discuss issues of mutual concern. These exchanges and dialogues are 

critical to successfully improving the framework for regulation globally. 

As we continue to work with our international counterparts, 

State regulators cannot abdicate our responsibility to consider the 

impact of regulatory convergence on the U.S. marketplace while enVerDate Nov 24 2008 18:57 Sep 25, 2012 Jkt 075735 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 K:\DOCS\75735.TXT TERRIE
8 

suring that differences in regulations do not become an unnecessary barrier to trade. 

In conclusion, increased regulatory collaboration and cooperation 

enhances well-regulated and competitive markets, providing policyholders better choices and stability. We will continue to coordinate 

with FIO, the USTR, and our international partners to promote 

open, competitive, stable, and well-regulated markets around the 

world. 

Thank you, and I look forward to your questions. 

[The prepared statement of Commissioner McCarty can be found 

on page 46 of the appendix.] 

Chairwoman BIGGERT. Thank you so much. 

Mr. Bartlett, you are recognized for 5 minutes. 

STATEMENT OF THE HONORABLE STEVE BARTLETT, PRESIDENT AND CHIEF EXECUTIVE OFFICER, THE FINANCIAL 

SERVICES ROUNDTABLE 

Mr. BARTLETT. Thank you, Chairwoman Biggert, Ranking Member Gutierrez, members of the subcommittee, Mr. Watt, Mr. Hurt, 

and Mr. Dold. 

My name is Steve Bartlett. I am president and CEO of The Financial Services Roundtable (the Roundtable). We are a national 

trade association of 100 of the Nation’s largest banking, securities, 

and insurance firms. Thirty of our 100 companies are principally 

in the business of insurance, but I will say that each one of our 100 

companies are engaged in the business of insurance in rather significant ways. 

Making the U.S. insurance sector more competitive at home and 

abroad is critical to sustaining our economic recovery. U.S. insurance companies create jobs in every congressional district; finance 

municipal, State, and Federal investment; help small and large 

businesses mitigate risk; and support individuals and families 

when they need it. 

And it is really about the economy. Insurance is an essential part 

of every single element of the economy. Without insurance, people 

could not drive cars, eat in restaurants, or buy homes; cities could 

not build bridges or highways; and a company could not build 

plants or create jobs. So, insurance is not a ‘‘want to have;’’ it is 

essential. 

My testimony will highlight four priorities that I think this committee should focus on and four priorities that will materially affect 

the U.S. insurance sector’s international competitiveness: the role 

of the Federal Insurance Office; the designation of SIFIs and G– 

SIFIs; domestic regulations that hinder U.S. competitiveness; and 

expanding U.S. insurers’ access to markets around the globe. 

First, the Federal Insurance Office. A strong, effective Federal 

Insurance Office will enhance U.S. insurers’ ability to compete 

internationally, and they also help U.S. consumers. To that end, 

The Roundtable publicly and directly supports an increase in FIO’s 

funding, staffing, and levels in stature to the levels contemplated 

by Dodd-Frank. 

FIO can fill the void in international negotiations, a void that 

has long existed. Section 502 of Dodd-Frank establishes FIO with 

that international aspect specifically in mind. And I will quote 

9 

parts of it: ‘‘The office—FIO—shall have the authority to coordinate 

Federal efforts and direct Federal policy on prudential aspects of 

international insurance matters, including representing the United 

States, as appropriate, in the International Association of Insurance Supervisors and assisting the Secretary in negotiating covered 

agreements.’’ 

Second, SIFIs and G–SIFIs. Designation of SIFIs and G–SIFIs 

should be coordinated between domestic and international regulators. We shouldn’t have one on one side of the Atlantic, another 

on the other side of the Atlantic, and a third in Asia. It is important that global regulators not upset the careful work of U.S. regulators designed for domestic purposes to identify SIFIs. International and domestic regulators should coordinate their rules to 

prevent redundant and conflicting regulations. Applying multiple 

regulatory standards to international insurance groups would require companies to comply with redundant and often contradictory 

regulations, would create additional deadweight cost that would be 

passed along to the consumers, and would deny consumers insurance. 

Third, domestic regulations should not be allowed to harm a U.S. 

insurer’s ability to compete internationally. Specifically, any new 

capital requirements for insurance companies should be insurancesector-specific. Administering identical stress tests to insurance 

companies and bank holding companies confuses the risk profiles 

of both. 

And, fourth, FIO’s expertise will complement USTR’s efforts to 

eliminate barriers to foreign insurance markets. FIO’s participation 

in future trade dialogues will increase insurance expertise and enhance the good work of the USTR. 

I have a few specific countries I will cite. The Administration 

should, as they have, and FIO, continue to engage China through 

the S&ED. The opening of access for China’s auto insurance market was a good step forward, but U.S. insurers still need the ability 

to open branches concurrently rather than one at a time. And 

China should be asked to lift its moratorium and clear the backlog 

for new license approvals for foreign firms offering retirement security products and enterprise annuity and group annuity products. 

That would be good for the Chinese people and good for the world 

as a whole. The FIO Director successfully participated in the most 

recent S&ED, and his influence and presence was felt in a positive 

way. 

The same with Brazil, which in 2010 promulgated some new 

trade barriers to reinsurance regulations that we need to address 

and get eliminated. And then last is, India opened its insurance 

market 12 years ago, but only opened it to 26 percent direct investment, which means it is not open at all. 

Madam Chairwoman, uniform, coherent, and strong insurance 

regulation will impact the U.S. economy in a positive way. And I 

thank both you and your committee for your efforts in that area. 

[The prepared statement of Mr. Bartlett can be found on page 32 

of the appendix.] 

Chairwoman BIGGERT. I thank you, Mr. Bartlett. 

Mr. Kochenburger, you are recognized for 5 minutes. 

10 

STATEMENT OF PETER KOCHENBURGER, EXECUTIVE DIRECTOR, INSURANCE LAW CENTER, AND ASSOCIATE CLINICAL 

PROFESSOR OF LAW, THE UNIVERSITY OF CONNECTICUT 

SCHOOL OF LAW 

Mr. KOCHENBURGER. Thank you. Good afternoon. My name is 

Peter Kochenburger, and I am a professor at the University of Connecticut School of Law, and the executive director of our school’s 

Insurance Law Center. Thank you for this opportunity to testify 

today. 

I would like to use my time to address two issues: first, FIO’s 

necessary role in representing U.S. regulatory interests internationally; and second, a request that Congress and Federal and 

State regulators remain vigilant in maintaining important consumer protection standards in the United States as they work 

closely with their counterparts throughout the world. 

Others have very well addressed the challenges insurance regulators face. These include an increasingly global business, historically regulated at the regional and national level, and the traditional segregation of regulatory authority over insurers, depository 

institutions, investment firms, and other financial services providers. 

We can and should acknowledge the tremendous effort and many 

successes that the NAIC and State insurance regulators have 

achieved in addressing these challenges, bringing far greater regulatory consistency domestically and representing U.S. regulatory 

interests abroad. The U.S. insurance sector is by far the largest in 

the world and one that has suffered relatively minor disruptions 

over the last several decades, at least compared to our other financial services markets. State regulators deserve much of the credit 

for this stability. 

However, institutionally, only the Federal Government has the 

authority and national perspective to represent our country’s regulatory interests internationally and negotiate insurance-related 

trade agreements. FIO was established with this specific role in 

mind when it was created in 2010. And, while still a work in 

progress, its mission is indispensable and cannot be undertaken by 

State-based or private entities. The trends that have been discussed here and at many other hearings over the last several years 

will likely only increase, as will the need for Federal knowledge 

and participation in various regulatory arenas. 

Perhaps the best example I can provide as to why FIO has a 

vital role to play internationally is the general consensus represented at today’s hearing. Rarely have representatives of major 

insurers, prominent professional organizations, the NAIC, and consumer advocates appeared on the same panel with a similar message. 

My second topic is one we have not heard about today, and that 

is consumer protection. Few would argue with the merits of collaboration and modernization, yet these virtues should not become code 

words for deregulation, and international cooperation should not be 

an opportunity or rationale to dilute consumer protection standards 

in the United States. While insurance regulation in the United 

States has significant gaps, we also have a tradition of consumer 

11 

protection at the State and often the Federal level more rigorous 

than that found in many other countries. 

We do not need to look far in the past to see how these arguments have been utilized previously. The optional Federal charter 

legislation, a recent modernization initiative put forth by some industry groups, would not only have altered the current and often 

effective regulatory balance, it would have eliminated important 

consumer protection standards that have existed for decades. 

As international cooperation increases, we will likely hear arguments about how modern regulatory systems in other jurisdictions 

depend largely on market forces rather than vigilant and empowered regulators to protect policyholders and, therefore, should be 

imported to the United States. Please be cautious about such arguments. We have heard them before and often with ill effect when 

adopted. 

I do not say this to be critical of an industry that is not only necessary to our country and economy but also one which has served 

it with honor. However, while enlightened industry’s self-interest is 

to be expected, we cannot accept on their face the positions it advocates, which should be carefully reviewed. 

State insurance regulation creates delays and duplication of effort by both the insurance industry and insurance regulators. That 

is indisputable. However, we have a constitutional structure that 

acknowledges significant State regulatory authority, and Federalism necessarily assumes a certain degree of duplication and inefficiency. The question is whether these costs are worth the benefits, not whether the existence of these costs is an excuse by itself 

to reduce State regulatory control. 

The benefits of insurance cannot be overstated, but their importance is exactly why it is necessary to regulate it carefully to ensure that policyholders obtain their benefit of the insurance bargain. The primary focus in evaluating insurance regulation, whether internationally or at the domestic level, should not be on market 

efficiency or claims of international comity but on effectiveness in 

protecting policyholders and our national economy. 

Thank you for your time. 

[The prepared statement of Professor Kochenburger can be found 

on page 38 of the appendix.] 

Chairwoman BIGGERT. Thank you. 

I now recognize the gentleman from Missouri, Mr. Clay, for an 

introduction. 

Mr. CLAY. Thank you, Madam Chairwoman, and thank you for 

conducting this hearing. 

I would like to welcome Mr. Allan O’Bryant from the Reinsurance Group of America (RGA). RGA is headquartered in my home 

State of Missouri, and has over 700 employees and growing in Missouri, and a total of over 1,700 employees worldwide. 

Mr. O’Bryant, I know you head up RGA’s international markets 

and operation and have flown all the way from Japan to join us 

today. 

Mr. O’Bryant technically covers all international, but given that 

he is based in Japan, his focus is more on Asia, where he is in 

charge of, at a minimum, Japan, Hong Kong, Korea, India, Malaysia, Taiwan, Thailand, and China. 

12 

Thank you so much for making such a long trip and for providing 

your valuable input today. We look forward to your testimony. 

And I yield back, Madam Chairwoman. 

Chairwoman BIGGERT. Thank you. 

And thank you so much for that trip to come here, Mr. O’Bryant. 

You are recognized for 5 minutes. 

STATEMENT OF ALLAN E. O’BRYANT, EXECUTIVE VICE PRESIDENT, AND HEAD OF INTERNATIONAL MARKETS AND OPERATIONS, REINSURANCE GROUP OF AMERICA, INC. (RGA), ON 

BEHALF OF THE REINSURANCE ASSOCIATION OF AMERICA 

(RAA) 

Mr. O’BRYANT. Thank you. 

Thank you, Congressman Clay, for the introduction. 

I am testifying today on behalf of the Reinsurance Association of 

America, a national trade association representing life, property, 

and casualty reinsurers. And I would like to thank Chairwoman 

Biggert and Ranking Member Gutierrez for holding this important 

hearing today. 

RGA is the largest U.S.-based life reinsurer. Our products include individual and group life reinsurance, living benefit reinsurance, and specialized underwriting to help individuals with unique 

health problems obtain the life insurance coverage they need to 

protect their families. We are headquartered in St. Louis, Missouri, 

and have operations in 25 countries. 

Our clients are many of the life insurance companies you hear 

about every day. Insurers use our services to promote their volume 

of business, reduce volatility from catastrophic events, help meet 

regulatory requirements, and enhance their general financial 

strength. Reinsurance is truly a global product. Indeed, 49 percent 

of the life insurance RGA reinsures is for persons living outside the 

United States. 

Today, I would like to address three issues crucial to the life insurance sector’s, or the U.S. insurance sector’s, international competitiveness and our ability to expand abroad while creating more 

jobs here at home: first, the need for a level playing field in international reinsurance laws and regulations; second, the challenges 

of competing with State-owned insurance and reinsurance companies receiving preferential treatment; and third, the positive impact 

of free trade agreements on insurance and reinsurance. 

In addition to those issues, the RAA strongly supported the establishment of the Federal Insurance Office. The international 

competitiveness of U.S.-based firms depends in part on a functioning governmental entity empowered to engage foreign governments and regulators on insurance and reinsurance matters and to 

advocate on behalf of U.S. consumers and companies operating 

abroad. We are encouraged by Director McRaith’s participation in 

the EU–U.S. transatlantic dialogue as well as the meeting of the 

International Association of Insurance Supervisors. 

Reinsurance is a global business. Insurance laws and regulations 

in foreign markets should not favor local insurers and reinsurers 

over multinational or U.S.-based companies like RGA. 

For example, some markets abroad have so-called seasoning requirements essentially barring companies from obtaining licenses 

13 

until they have been in business for a prescribed number of years. 

This requirement does not bring about healthier insurance markets 

because it is blind to other virtues of a company, such as the quality of the assets or of its management team. Rather, it limits the 

number of companies able to provide services, resulting in a less 

efficient, less competitive insurance market. 

Regarding oversight, we agree that supervision of insurance 

groups should be improved. However, creating unified standards 

only for a select group of insurers and reinsurers is setting a double standard. 

In the domestic market, we look to our insurance regulators and 

officials to ensure that U.S.-based insurers can also compete on a 

regulatory level playing field here at home. To this end, we recommend that the FIO be required to use its ability to preempt 

State measures to ensure competitive equivalence in the U.S. market between U.S. and non-U.S-based firms. Under Dodd-Frank, 

FIO can only preempt State measures that discriminate against 

U.S. companies. There is nothing in the law ensuring that U.S.- 

based firms will not be discriminated against. 

Second, competing with the government-owned insurance and reinsurance companies abroad is proving to be a problem in many 

important emerging markets such as China, India, Brazil, and 

Korea. There should be equal regulatory treatment of private and 

state-owned insurance and reinsurance firms, but this isn’t always 

the case. State-owned companies frequently benefit from more lenient supervision. What is more, if the International Association of 

Insurance Supervisors eventually sets higher standards of scrutiny, 

entities in these countries may be excused from new standards if 

they only operate in one or two countries. While we do not object 

to state-owned insurers and reinsurers, standards need to be applied equally. 

And, finally, we applaud the free trade agreements with Korea, 

Colombia, and Brazil. Benefits can include protection and enforcement of agreements to protect confidential information exchanged 

between U.S. and foreign insurance regulators for proper regulatory oversight. We are especially hopeful that the privacy and 

data transfer provisions of the U.S.-Korea Free Trade Agreement 

will address the differences in data protection rules currently existing between the United States and Korea. The test of these agreements will be in the creation and the enforcement of laws and regulations within each participating country consistent with the 

terms of the agreement. 

Thank you again for the opportunity to comment on these issues, 

and I look forward to your questions. 

[The prepared statement of Mr. O’Bryant can be found on page 

64 of the appendix.] 

Mr. HURT [presiding]. Thank you, Mr. O’Bryant. 

Mr. Sapnar, you are recognized for 5 minutes. Thank you. 

14 

STATEMENT OF MICHAEL C. SAPNAR, PRESIDENT AND CHIEF 

EXECUTIVE OFFICER, TRANSATLANTIC REINSURANCE COMPANY, ON BEHALF OF THE REINSURANCE ASSOCIATION OF 

AMERICA (RAA) 

Mr. SAPNAR. Good afternoon. My name is Mike Sapnar, and I am 

the CEO of Transatlantic Reinsurance Company. I am here on behalf of my company and the Reinsurance Association of America. 

I am grateful for the opportunity to address the subcommittee on 

the impact of regulatory impediments on U.S. reinsurance companies. 

As you know, there is not a long list of U.S.-domiciled reinsurers 

with global operations. Our written statement details the reasons 

why this list is short. That aside, I would like to focus my comments using Transatlantic as a practical example on four of these 

issues: increased protectionist regulatory policies abroad; increased 

regulatory oversight of reinsurance abroad; the historical absence 

of a Federal advocate for reinsurance in the United States; and the 

tax disadvantage of U.S.-domiciled reinsurers. 

First, there are two facts that underscore the gravity of these 

issues. One, there were five major worldwide property catastrophe 

losses in the last 24 months, totaling over $125 billion. Sixty-twoand-a-half percent of these losses will be paid by reinsurers, and 

97 percent of that amount will be paid by reinsurers outside the 

country in which the loss occurred. Two, of the 50 new global reinsurers formed since 2001, exactly none were formed in the United 

States In fact, since 1989, no new global reinsurer has chosen the 

United States as its home domicile. 

Transatlantic, founded in 1978, is the leading global property 

and casualty reinsurer domiciled in and regulated by the State of 

New York. We are licensed in all 50 States as well as in many 

countries around the world. We have one main operating company 

in New York and a global network of 17 branches. This structure 

provides a strong single-balance-sheet approach, allowing us to deliver a cost-effective product while offering local service and superior financial security. 

Despite the global capital role that reinsurance plays, Transatlantic has encountered protectionism policies in many foreign jurisdictions, notably Asia and Latin America. These barriers include: limitations for foreign companies on direct investments and 

domestic entities; mandatory cessions by local reinsurers to specified reinsurers; right of first refusal for domestic reinsurers; punitive minimum capital requirements; and restrictions on cross-border flows. Often, the countries imposing these barriers are emerging insurance markets. 

Transatlantic does not suggest that the United States consider 

retaliatory policies. Instead, our collective goal should be to educate 

developing insurance markets on the value of free trade, regulation 

without strangulation, and the syndication of risk. We believe the 

Federal Insurance Office can play an important advocacy role on 

this issue and elsewhere. 

In particular, the FIO can play an important role in helping U.S. 

companies address overseas regulatory issues. Following the 2008 

financial crisis, foreign regulators are more aggressive in how they 

oversee U.S. reinsurance branches. One such example is the proVerDate Nov 24 2008 18:57 Sep 25, 2012 Jkt 075735 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 K:\DOCS\75735.TXT TERRIE
15 

posed implementation of the EU’s Solvency II directive and its 

threat to our operations. 

We have three branch offices in Europe operating off our single 

balance sheet; thus, we do not have to segregate our capital. This 

mitigates infrastructure costs, currency issues, and value-added 

taxes. In addition, clients receive local service while tapping our 

full financial resources. Regulators, meanwhile, can interface with 

local company contacts and readily access records for inspection 

and oversight. 

Nevertheless, the U.K. regulator has pointed to the fact we do 

not have a solitary U.S. insurance regulator to coordinate with 

when setting the strategy for the regulation of U.S. reinsurance 

branches under this new directive. They noted that regulation of 

U.S. insurers varies by State. They felt their only options were to 

either apply their own regulatory scheme on an extraterritorial 

basis or require a separately capitalized subsidiary in the EU 

which could be consistently regulated under Solvency II. 

With this new approach, Transatlantic faces a difficult choice: 

close our U.K. branch to avoid dual regulation by the U.K. FSA 

and the New York Department of Financial Services or establish 

a U.K. subsidiary with separate infrastructure, capital, and increased costs. 

Ironically, during this same period, the NAIC in several States 

was focused on relaxing the regulation of foreign reinsurers. Thus, 

while U.S. companies are faced with heightened requirements in 

the EU, U.S. regulators are lowering barriers at home. 

An active FIO would serve three purposes here: one, advocate on 

behalf of all U.S.-domiciled companies for fair treatment in international jurisdictions; two, provide a single gate for foreign regulators to interface with U.S. insurance regulators; and three, coordinate policies at home with issues abroad. We cannot stress 

enough the potential value in these three areas of a well-resourced 

single U.S. regulator. 

Finally, the United States needs to narrow the tax disparity. The 

United States has the highest corporate tax rate in the world, combined with the punitive treatment of controlled foreign corporations. Companies like us face a higher cost of capital over time. 

Lowering the tax rate or amending the taxable base will not only 

allow domestic companies to better compete globally; it will encourage new or existing reinsurers to locate here. In fact, a revised corporate tax structure with an empowered Federal advocate would be 

a compelling environment for many reinsurers, which would bring 

both jobs and capital to the United States. 

Thank you very much. 

[The prepared statement of Mr. Sapnar can be found on page 76 

of the appendix.] 

Mr. HURT. Thank you, Mr. Sapnar. 

Mr. Toppeta, you are recognized for 5 minutes. 

STATEMENT OF WILLIAM J. TOPPETA, VICE CHAIRMAN, 

METLIFE, INC. 

Mr. TOPPETA. Thank you, Mr. Chairman, and members of the 

subcommittee. My name is Bill Toppeta, and I am vice chairman 

of MetLife. 

16 

You likely know MetLife as the largest life insurer in the United 

States. In recent years, we have grown to be a leading global provider of life insurance, annuities, and employee benefit programs, 

serving 90 million customers in over 50 countries. 

In 2011, our businesses outside the United States contributed approximately 35 percent of MetLife’s earnings. I am here today to 

speak on behalf of a level regulatory playing field for U.S. insurers 

throughout the world. 

Our recommendations are straightforward. First, policymakers 

should carefully weigh the impacts of duplicative or conflicting regulations. Second, insurance should be regulated as insurance, not 

as banking. And third, policymakers should address non-tariff barriers impacting insurers operating abroad through trade agreements and intergovernmental dialogues. 

It is hard to imagine an industry that has more layers of regulation than life insurance, and that situation appears to be getting 

worse, not better. Although we favor good, strong regulations, multiple layers can actually be self-defeating, to say nothing of confusing and expensive. 

The intersection of international and domestic policies and standard-setting creates an increasingly complex global regulatory environment. Duplicative or conflicting regulations may inhibit growth 

and fail to address the very issues they were intended to cure. This 

situation may negatively affect the competitive position of U.S. insurers. 

I will provide a couple of examples to illustrate my point. One 

is the Solvency II directive in the European Union. A component 

of Solvency II is a greater focus on group supervision. Since many 

EU insurance groups also have businesses in other countries, the 

EU proposes to assess the equivalence of these third-country supervisory regimes. 

It will not surprise you to learn that, as a large U.S.-based insurer with operations in Europe, MetLife would like to see the EU 

recognize the U.S. as equivalent for Solvency II purposes. We 

would argue that regulators should focus on the outcomes provided 

by regulation rather than on the structure of the regulatory system. We are wary of premature arguments for regulatory convergence. What we need at this stage is consistency achieved through 

mutual recognition of the outcomes of our respective systems, rather than pressure to replicate or adapt models from other countries. 

Congress is in an excellent position to elevate the U.S.–EU dialogue on equivalence. The congressional spotlight can be shown on 

the benefits of mutual recognition which flow to consumers, EU 

and U.S. businesses, regulators, and our two economies. Whenever 

transatlantic dialogues take place, it will be helpful to hear a chorus of congressional support for cooperation on insurance regulation. The world’s two largest insurance markets deserve the level 

playing field that will come from mutual recognition. 

Let me turn now to a trade example. One of the ways countries 

seek to protect their domestic industries is by restricting foreign direct investment in certain sectors, usually for a limited period of 

time. Two of the world’s largest markets, India and China, maintain tight restrictions on FDI and life insurance. In India, foreign 

insurers are limited to 26 percent ownership, and in China, the 

17 

limit is 50 percent. This means that companies like MetLife who 

operate in two of the world’s fastest-growing markets must identify 

local partners to invest in and jointly govern their operation. No 

similar restriction applies to Chinese or Indian companies operating here. 

FDI caps are particularly challenging for life insurers because we 

must commit substantial capital not only to bricks and mortar, 

marketing and distribution of our product, but even more so to 

backing up the financial guarantees we make to our customers. 

The initial investment period for starting up new life insurance 

ventures can span several years, and local investors may not always have the patience or the capital to sustain such long-term investment. 

Reduction or elimination of FDI caps in these key markets will 

take the concerted effort of our government through all available 

channels. Congress is in an excellent position to keep the spotlight 

on this issue and to support ongoing efforts by the White House, 

USTR, and the Departments of State and Treasury to eliminate or 

reduce FDI caps. 

Let me conclude by affirming that American companies are innovative, and American workers are highly productive. Given a fair 

chance, with a fair, level regulatory playing field, we can compete 

and win against anybody in the world. 

Thank you for your attention, and I look forward to your questions. 

[The prepared statement of Mr. Toppeta can be found on page 93 

of the appendix. ] 

Mr. HURT. Thank you, Mr. Toppeta. 

Mr. Vastine, you are recognized for 5 minutes. 

STATEMENT OF J. ROBERT VASTINE, PRESIDENT, COALITION 

OF SERVICE INDUSTRIES (CSI) 

Mr. VASTINE. Thank you very much, Mr. Hurt, and thank you, 

members of the subcommittee. 

For the record, I would like to thank Chairwoman Biggert for her 

work as co-chair of the Congressional Services Caucus. We deeply 

appreciate her and her staff’s understanding of the importance of 

the services sector, the country’s biggest employer. 

The United States is the world’s largest services exporter. Ex- ports reached $588 billion with a surplus of almost $200 billion in 

2011. That is a new record. U.S. cross-border insurance exports, as 

the chairman pointed out at the outset, accounted for only 2.6 percent of those exports, or about $15 billion. But insurance cross-border exports understate the very substantial role of our insurers in 

global markets through overseas affiliates, where sales were $60 

billion in 2009 in official statistics. We have reason to believe that 

this is an understatement in itself. 

Although our exports are strong, a recent study by Dr. Brad Jensen at the Peterson Institute estimated that the United States has 

the potential to export far more and that 3 million more U.S. jobs 

could be created if we can remove the many complex foreign barriers to our services trade. And here is where we certainly need the 

coordinated help of the FIO and the U.S. Trade Representative and 

other agencies. 

18 

CSI was founded 30 years ago to bring services to the forefront 

of the U.S. trade agenda, and we believe we have achieved that 

goal. And so, it is appropriate to appear today with Bill Toppeta, 

our chairman. 

There are now numerous opportunities, new opportunities in 

which CSI and its members vigorously engage to promote insurance trade and investment, including the International Services 

Agreement being discussed in Geneva, the Trans-Pacific Partnership being negotiated this week in Dallas, the U.S.–EU High-Level 

Working Group, as Bill has described it, and there are others. 

In all services negotiations, the most important objective is to 

achieve access to foreign markets. And this means the right to establish your business, to own it fully, to use the corporate forum 

most suitable to the market, and to operate in a transparent regulatory environment. Equally important is the right to get the same 

regulatory treatment that a local company gets. This is, of course, 

known as national treatment. 

A recent example of a market access issue on which progress has 

been made is that of the auto insurance market in China. After 

years of engagement by the U.S. Government and industry, China 

finally agreed to open this market—recently at an S&ED conference, actually. More work must be done to make the promise a 

reality. We deeply appreciate the work of the U.S. negotiators who 

will, we are sure, secure this commitment. 

Bill Toppeta has mentioned the issue of equity caps, and I won’t 

repeat those. In China, in India, and in other markets, equity caps 

are a major deterrent to foreign direct investment and to local economic growth. 

In addition to these market access issues, we are now confronting 

what we call our 21st-Century issues. One of the most important 

of these is foreign government policies that favor state-owned enterprises—for example, national postal services. The sale of insurance through post offices is a growing problem. For instance, Japan 

Post is a 100 percent government-owned postal entity that offers 

regular mail service but also insurance and banking and other 

services, which all are in direct competition with private sector 

companies, including our companies. The Japanese Diet recently 

passed legislation that will expand the favorable treatment provided to Japan Post insurance and make it easier for it to offer 

products on a discriminatory basis. 

CSI and the U.S. Chamber of Commerce have collaborated recently to bring to the forefront this issue and to actually table language—to urge our government to table language which is now 

being discussed in the Trans-Pacific Partnership negotiation as a 

foundation for a global standard. 

Freedom of data flows is absolutely essential, and it is another 

21st-Century issue. It underpins our huge services exports. Our 

roughly $600 billion of services exports depend on the ability of 

data to move. Digital trade, we call it—digital enablement of services trade. 

For example, many countries are attempting to require that all 

financial services data, including insurance data, be processed and 

stored in-country. The Korean agreement, as has been pointed out, 

for the first time contains the provision that insurance companies 

19 

may process data outside Korea. Again, our negotiators in the TPP 

are working to ensure that requirements are not placed on the location of servers and that data flows are not unnecessarily interrupted. 

Finally, another 21st-Century issue is forced localization, which 

occurs when a country requires multinational companies to conduct 

their business activities domestically, requiring that business processes or hiring be conducted in-country. For instance, Brazil is forcing the localization of reinsurance, and Argentina has taken many 

steps to force global insurances to localize within that country. 

All of these issues and more demonstrate the necessity of the 

FIO and the trade agencies and the huge agenda ahead. Thank you 

very much. 

[The prepared statement of Mr. Vastine can be found on page 

104 of the appendix.] 

Mr. HURT. Thank you, Mr. Vastine. 

I will now yield myself 5 minutes. 

I wanted to see if I could get an answer from Mr. Toppeta and 

Mr. Bartlett on this question, and then maybe also hear from Mr. 

McRaith and Mr. McCarty. 

As we look at, in the future, the designation of certain companies 

as SIFIs and G–SIFIs, I would like to know specifically what concerns the industry has in terms of recognizing the difference in the 

business models between banking and insurance? And what should 

we be looking at toward minimizing the consequence of those designations in terms of global competition? 

If we could, Mr. Toppeta, and then Mr. Bartlett. And then, if we 

have time, I would love to hear from Mr. McRaith and Mr. 

McCarty. 

Mr. TOPPETA. Thank you, Mr. Chairman. 

I would say this: The basis of all of this is that the business models of banking and insurance are considerably different. 

In insurance, we start with our liabilities. We start with the 

promises we make to our policyholders, and those are our liabilities 

in the future. We have to then match those with long-term assets. 

Because we make long-term promises that we are going to pay on 

20 or 30 years in the future, we have to have long-term assets to 

go with them. 

We do not have the same business model as banks who borrow 

money short, in effect, and invest long. We do not have the same 

liquidity issues that banks have. Banks can suffer literally runs on 

banks, where customers come in and ask for their deposit. We have 

in our policies protections against that so that we have surrender 

charges, penalties if someone is going to surrender early; there are 

tax consequences of surrendering early. 

So I would say the two business models are different. And, therefore, in all of our regulations, we have to make very sure that we 

are regulating insurance as the business of insurance, not as banking. 

Mr. HURT. Thank you. 

Mr. Bartlett? 

Mr. BARTLETT. The business models are entirely different. The 

Dodd-Frank and SIFIs were written, in all fairness, primarily with 

the banks and bank holding companies in mind. But, nevertheless, 

20 

it did mandate to the Treasury and to the FSOC to consider all 

types of financial institutions, and so that is what they are going 

to do. 

There are a lot of tests in the law as to what makes a SIFI, but 

the biggest one, it seems to me anyway, is interconnectedness. And 

we have all spent a lot of time commenting on that, but interconnectedness sort of takes center stage in that. 

I think what is facing FIO now—and I believe FIO is and should 

concentrate on this—is to be sure that the G–SIFIs in Europe and 

SIFIs in the United States, that definition is as close to exactly the 

same as possible or at least quite concurrent and quite compatible. 

It is hard enough to figure out what is an interconnected, systemically risky company, but if you have to have figure that out with 

two different definitions on two sides of the Atlantic, then it would 

create confusion and add to systemic risk rather than diminish it. 

Mr. HURT. Thank you, Mr. Bartlett. 

Mr. McRaith? 

Mr. MCRAITH. Yes, Mr. Chairman. To add to what the prior panelists have said, if we look at what happens when a traditional 

bank fails and when a traditional insurer fails, that really depicts 

the most graphic difference. If a bank fails, there is the potential 

for an immediate run on all assets of that bank. And the liquidity 

problem may mean the bank doesn’t have sufficient liquidity to 

meet the demands of the run. When a traditional insurance business fails, not every car owner, for example, is going to get into a 

car accident immediately upon failure. Not every individual is 

going to seek death when its life insurer fails. So, there is not that 

same prospect of a run. They are very different business models 

with very different consequences in the event of failure. 

At the Federal Insurance Office, we are not only involved with 

the Financial Stability Oversight Council, we are involved at the 

IAIS, where the process is being developed to identify globally significant insurance institutions. We are working to align the criteria, the methodology, and the timing of both of those processes 

so that no U.S.-based insurer is disadvantaged through the global 

designation process. 

Mr. HURT. Mr. McCarty, would you like to just comment briefly? 

My time is about up. 

Mr. MCCARTY. Yes, and I will make this brief, Mr. Chairman. 

I do agree that not only is the business model different, but the 

regulatory model is different and has a stringent regulatory regime. And it also, because of the nature of insurance, gives more 

opportunity for the companies to rebound and not have the same 

reaction that you would in the case of a bank. 

We contend that banks have historically been risky, systemically 

risky, when traditional insurance has not been. And we would 

think that the solution would be to wall off the insurance entities 

to prevent them from being systemically risky. 

Mr. HURT. Thank you, Mr. McCarty. My time has expired. 

I recognize Mr. Clay from Missouri for 5 minutes. 

Mr. CLAY. Thank you, Mr. Chairman. 

Mr. O’Bryant, what types of barriers to entry in the foreign markets have U.S. firms faced? And could you give any particular inVerDate Nov 24 2008 18:57 Sep 25, 2012 Jkt 075735 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 K:\DOCS\75735.TXT TERRIE
21 

stances or identify countries where it may be more difficult to enter 

those markets? 

Mr. O’BRYANT. Yes, Congressman Clay. One barrier that we are 

actually considering and facing right now is with the country of 

Brazil. Just in the last year-and-a-half, they have strengthened 

their own internal requirements that require more of any type of 

reinsurance be allocated to the state-owned insurance reinsurer. 

That, along with high capital requirements to enter the market, 

make that market extremely difficult for us to enter into and to be 

profitable. So, it actually limits the capacity that we could offer to 

local insurers to write more business. 

Mr. CLAY. And would you share with us your recommendations 

to correct some of the barriers? How would you recommend it being 

done differently? 

Mr. O’BRYANT. All the gentlemen on the panel, almost, have addressed the need for a strong voice that could represent the industry from a Federal level. 

I have worked in Japan for many years, and I was around in 

1996 and 1998 when the USTR represented the United States in 

insurance talks with Japan. One of the things I heard from the regulators, Japanese regulators, the Ministry of Finance at that time, 

was that there was no one who would really speak on our behalf 

who knew what we were talking about or what they were talking 

about. Not that the USTR was an unfit negotiator, but they did not 

look at it from the perspective of the insurance industry. Whereas, 

when they were negotiating banking treaties, the Treasury negotiated on behalf of the U.S. banks. 

So, the FIO is very important to us as an industry. As a Federal 

representative, it is empowered to represent the industry and conclude treaties. 

Mr. CLAY. Thank you for that. 

And along those same lines, I want to say that another witness 

mentioned the concept of a Federal advocate for reinsurance companies. Could someone expand on that? 

Mr. Sapnar? 

Mr. SAPNAR. Yes, that was me. 

Mr. CLAY. Okay. 

Mr. SAPNAR. I think, for us, a lot of the international regulators 

that we deal with don’t understand the U.S. regulatory system very 

well. And to have an advocate or a single gateway where they can 

go and have a single liaison with the different States would be useful, considering that different States have different regulatory regimes. 

And I would just go a step further. Last week, I think, David 

Cameron, U.K. Prime Minister, sat out in front with Lloyd’s and 

talked about the importance of the Lloyd’s market and the longterm strategy of Lloyd’s. And I think having a Federal advocate for 

our business and promoting the transparency and the financial 

strength of our—and the successful regulatory system we do have 

here that isn’t well understood would go a long ways overseas. 

Mr. CLAY. And, Mr. Sapnar, you piqued my interest when you 

talked about U.S. tax structure and if it was competitive with the 

rest of the world. I was wondering, if it was competitive, if it was 

lower rates, would your company be receptive to repatriating your 

22 

profits that you earn overseas and bringing them back here and 

paying a fair tax on those profits and reinvesting them in this 

country? 

Mr. SAPNAR. Sure, I will talk about that on two levels. 

First of all, yes, we already do that as a branch system. So, the 

profits we earn overseas are consolidated under our New York office, and we pay full tax on that. 

Second, last year we went through a situation where we were 

being merged with another entity that was a Bermuda-based company. During that process, four other companies eventually 

emerged wanting to buy Transatlantic. Why did they want to buy 

Transatlantic? Because if they could get our capital and our assets 

offshore, it was a big coup for them. So, clearly, other people see 

that, and that is a potential threat to jobs here in the United 

States or Transatlantic staying on shore. 

We did ultimately choose, as a management team, to combine 

with a U.S.-based company for other reasons that were compelling, 

in my view, at the end of the day, but I had to answer to the shareholders. 

Mr. CLAY. Okay. Thank you for that response. 

I yield back. 

Mr. HURT. Thank you, Mr. Clay. 

Mr. Dold is recognized for 5 minutes. 

Mr. DOLD. Thank you, Mr. Chairman. 

And I certainly want to thank all of our witnesses for being flexible today and for coming from great distances to join us. 

I also want to welcome all of our former committee staff who 

happen to be in the audience today. We certainly appreciate you 

being with us. 

Mr. Chairman, I was obviously on the Floor when we started on 

opening statements, and I would like to ask unanimous consent 

that my opening statement, which I was unable to give, be submitted for the record. 

Mr. HURT. Without objection, it is so ordered. 

Mr. DOLD. Thank you, Mr. Chairman. 

Director McRaith, it is so great to see you again. I hope all is 

going well. I thought we would just start with you. 

The other two insurance experts on the FSOC, Mr. Woodall and 

Missouri Insurance Commissioner John Huff, have both said that 

they didn’t think that the traditional property casualty insurance 

could be deemed systemically significant. In fact, in July, Mr. Huff 

actually testified before this subcommittee and said that traditional 

insurance products and activities do not typically create systemic 

risk. 

As the FIO Director, the Dodd-Frank Act charges you with making recommendations to the FSOC on insurance companies to be 

designated for the heightened prudential standards and supervision by the Federal Reserve. Do you foresee the FIO recommending to the FSOC or any equivalent international body that 

any insurer be deemed systemically significant? 

Mr. MCRAITH. The Financial Stability Oversight Council, by statute, looks at all firms that may present a vulnerability or threaten 

the health of the economy. It does not afford the Council the opportunity of exempting any one industry or sector. In that process, I 

23 

know the Council is evaluating large firms that have many different business components. While the traditional business of insurance may not, in itself, present systemic risk, that is not a reason not to look at a larger firm. 

I would not disagree with the statements that Director Huff and 

Mr. Woodall have made. I would say that I think, as a country, it 

is clear that we need to always evaluate a firm as a whole, ‘‘look 

under the hood,’’ as they say, and evaluate what are the nontraditional insurance aspects of that firm’s operations. 

Mr. DOLD. And I certainly believe that is fair. Are there any 

firms that you can think of right now, insurance firms, that you 

think potentially you would recommend to the FSOC as systemically significant? 

Mr. MCRAITH. No, but I would—looking at history, of course, we 

could look at AIG— 

Mr. DOLD. Sure. 

Mr. MCRAITH. —a firm that was predominantly known as an insurance firm. That would be a firm, if we were to go back several 

years, we would like to be designated. 

Mr. DOLD. Director McRaith, I don’t disagree. My question to you 

on AIG is, property and casualty, was that part of the issue with 

AIG? 

Mr. MCRAITH. I don’t want to comment on any firm today, but— 

Mr. DOLD. Sure. 

Mr. MCRAITH. —I would say, looking back at AIG, historically, 

there were issues in some of the insurance— 

Mr. DOLD. No question, there were issues. 

Mr. MCRAITH. Yes. 

Mr. DOLD. I just think that if we look at it on the aspects of their 

business, if we have a traditional property and casualty insurance 

business, generally those weren’t really the issues. And I understand your need to try and look under the hood, and I think that 

is certainly good. I just wanted to see if you had any on the top 

of your mind right now. 

If I can, I would just like to switch to Mr. O’Bryant. Thank you 

again for making the trek in as long as you have. The question I 

have for you is, you expressed concern in your written testimony 

about the reinsurance of certain term life insurance products because the United States has strict reserving rules for such products 

that are not present in many other countries. Further, you suggest 

that if the FIO does not address this disparity, a number of U.S. 

firms would be disadvantaged in their ability to offer competitive 

prices to reinsure such products. 

What specific recommendations, if any, would you have for Director McRaith, the FIO, to address this concern? 

Mr. O’BRYANT. Thank you for the question. 

Again, I think the most important thing is to have a strong advocate that can use the U.S. model and the strength of the industry. 

One of the things we enjoy from the State regulators is a very 

strong and prudent model that has protected the industry and protected the consumers and policyholders for many years. And it has 

shown that reserving requirements here are indeed substantial 

and, because of the long-term results of reserving standards here, 

that they have applicability worldwide. 

24 

But I think having the one voice that can advocate the same type 

of standards and same type of solvency requirements is the greatest strength that we could ask for. 

Mr. DOLD. I certainly thank you for the comments. 

Mr. Bartlett, I had a question. My time has expired, so I will 

submit that in writing to you. 

But, again, thank you all for taking the time to join us today. 

Mr. HURT. Thank you, Mr. Dold. 

Mr. Cleaver is recognized for 5 minutes. 

Mr. CLEAVER. I will yield to the gentleman if he would like to— 

not completely, but— 

Mr. DOLD. No, no, just for the question. 

Mr. CLEAVER. Yes. 

Mr. DOLD. I do appreciate that. I thank my friend for yielding 

just for the question. 

Mr. Bartlett, in your testimony, you applauded the Chinese Government’s announcement that it would lift the prohibition on foreign firms offering mandatory auto insurance policies. 

Are there other restrictions that impede U.S. competitiveness in 

China that the Administration can address through its Strategic 

and Economic Dialogue? 

Mr. BARTLETT. Thank you. I will be brief. 

Yes, of course, it is China, so there are a lot of restrictions. Auto 

insurance was another step forward. The two that come to mind is, 

one is that U.S. insurers need to be able to open branches concurrently. It would be like saying that you can offer a new brand of 

fertilizer for soybeans but only one field at a time per year, and 

that wouldn’t get you very far very fast. 

And then second is to lift its moratorium on license approvals for 

foreign firms offering annuities and retirement products. That 

would be astoundingly positive for the Chinese themselves as well 

as for global trade. 

Mr. DOLD. Thank you, sir. I appreciate it. 

And I appreciate my friend for yielding. 

Mr. CLEAVER. Thank you, Mr. Chairman. 

Let me go with Mr. O’Bryant and Mr. Bartlett, not just because 

they have a big operation in Missouri, but—I am wondering, Mr. 

O’Bryant, what specifically can the Federal Government do to help 

companies like yours? Now, the follow-up is dangerous, but go 

ahead. What can we do to help companies like RGA? 

Mr. O’BRYANT. As we enter new markets, the greatest challenge 

that we have is local regulations. Clearly, the standards are different from those that we have here at home. And our whole entire 

business model is built on providing additional services to expand 

the ability of local insurers, as well as multinationals in those 

countries, to offer products to a greater number of people through 

our specialized underwriting capabilities as well as to inject new 

knowledge through product development ideas in those countries. 

But because of the barriers that we find, often because of capital 

that is required—and, as Mr. Sapnar said, in many cases, we are 

required to set up localized companies instead of being able to work 

through branch structures. And then also, in many cases, as I mentioned earlier, in Brazil, where there are requirements that the 

state-owned company receive a greater portion of any kind of ceded 

25 

premium, it restricts our ability to move into those markets, and 

it actually helps local companies expand their companies. 

Mr. CLEAVER. So the follow-up would be—and you may have answered this—what is it that we are doing presently that you believe to be the greatest impediment to RGA? Either you or Mr. 

Bartlett or both? 

Mr. BARTLETT. What I have communicated clearly with Mr. 

McRaith and with others is that I think the greatest challenge and 

the single place that we can advance the cause of the American 

consumer the most is with uniform standards from State to State, 

to create equal protection of the laws in every State. The American 

people, both consumers and businesses, are highly mobile. They are 

interstate, they are interconnected, and they deserve the opportunity to have a uniform set of standards. 

We are a long way from that, and it can be happening in incremental steps, but I think that is one of the challenges for FIO in 

which they can advance the cause for the American people by a lot. 

Mr. CLEAVER. Mr. Sapnar? 

Mr. SAPNAR. Thank you. 

I think Director McRaith has a unique opportunity, difficult in 

being the first Director as well, but he has some abilities or authorities that the States don’t have, and we historically haven’t had 

in the United States, to enter into some agreements with foreign 

regulators that are binding. 

And I think that the biggest problem we face is we have 50 different States that are hard for our overseas regulators to understand. And if he can get down to settlement of those issues, rather 

than discussions of principles, we think that would be a really good 

thing at the end of the day. 

That is very difficult for him. He has a lot to do, there is a lot 

going on, so he needs the support. We are prepared to support him 

and to educate the office as much as possible. I am not suggesting 

it is easy, but I think it is certainly possible. 

Mr. CLEAVER. Thank you. 

Mr. HURT. Thank you, Mr. Cleaver. 

Without objection, I would like to recognize myself for an additional 5 minutes to ask questions of Mr. Vastine and Professor 

Kochenburger. 

We have heard concern about the European Union’s Solvency II 

initiative, and I would like to hear from you about whether or not 

you believe that initiative will put U.S. insurers at an unfair disadvantage. And how would you recommend to minimize that unfair 

advantage? 

If I could have Mr. Vastine address that question, and then, Mr. 

Kochenburger, if you could also weigh in. Thank you. 

Mr. VASTINE. Solvency II is obviously an enormous concern to 

our country, and it does pose competitive issues that the industry 

is engaging in a very intense way with regulators in Europe and 

with the help of Mr. McRaith. 

So I think the response of the industry has been, in the context 

especially of the EU–U.S. High-Level Working Group, to more actively and thoroughly engage the Europeans in a dialogue that will 

result in a mutually recognized and mutually beneficial outcome, 

so that these two huge global markets can coordinate their regulaVerDate Nov 24 2008 18:57 Sep 25, 2012 Jkt 075735 PO 00000 Frm 00031 Fmt 6633 Sfmt 6633 K:\DOCS\75735.TXT TERRIE
26 

tion and mutually accept the effectiveness of each other’s regulation, so that the United States is not faced with a set of regulations 

that are foreign to its business or strange to its business, are not 

endogenous, and we can come to an agreement. 

So we have embraced the services—the insurance sector has really embraced the U.S.–EU High-Level Working Group as a means 

to promote that very important dialogue with the Europeans. 

Mr. HURT. Thank you, Mr. Vastine. 

Mr. Kochenburger? 

Mr. KOCHENBURGER. Thank you. 

I think a couple of years ago—just one quick point to add—a couple of years ago, Director McRaith, when he was commissioner in 

Illinois, testified before Congress on behalf of the NAIC on Solvency II. And I think the term he used, which is one I like, is that 

it is not a cure-all, it is not a panacea, and it is not necessarily the 

model for the world. 

And I think part of the concern would be that the United States 

solvency models have actually worked fairly—well, very effectively, 

and, also, that some of those models in the United States respond 

to very different situations that we have in the EU or elsewhere 

in the world, particularly in property casualty, where in property 

there may be a lot of similarities, but of course liability models in 

the United States are far different. Briefly put, you can be sued 

about many more things in the United States than in other countries and often for a long time. So, property casualty companies in 

the United States have had to be very concerned about not only asbestos claims, clerical abuse claims, and others that go back 20, 30, 

40, or 50 years, but what will be the next level of asbestos claims. 

Again, this responds to our own unique liability system. And that 

means that Solvency II and other models, whatever their merits, 

may, in fact, not necessarily be the best ones for here. And so, that 

is a concern I share. 

Also, however, the importance of equivalence, of course, can’t be 

overstated. Our companies absolutely—and they can say it much 

better than I can, and they have said it today—need the ability to 

be deemed equivalent in order to work within their second significant largest insurance market in the world. 

Mr. HURT. Thank you, Mr. Kochenburger. 

Mr. McRaith, would you like to respond? 

Mr. MCRAITH. The EU’s Solvency II framework is a well-conceived framework adopted by some very smart insurance people 

who reside and operate and have worked in the EU. And we congratulate them on that initiative and on the development and 

progress they have made. 

The purpose of the EU–U.S. insurance dialogue which I described earlier is to alleviate the concern, resolve the uncertainty 

for the insurance sector based in both jurisdictions, so that companies, whether based in Europe or the United States, can compete, 

as needed, in emerging economies around the world. 

Whether this results in something called an equivalence assessment by the EU, we can’t be sure. What I can tell you is that the 

United States, through the dialogue or the insurance project that 

is now being undertaken, will conclude this year with a path forward. And we will, in fact, embrace best practices, if there are best 

27 

practices to be embraced. If not, we are going to move forward, 

hopefully arm-in-arm with our colleagues from overseas. 

Mr. HURT. Thank you. 

Mr. McCarty, we are over time, but would you like to respond 

briefly? 

Mr. MCCARTY. Yes, I concur with Director McRaith that we certainly commend our colleagues overseas for the great work they did 

to modernize their solvency system; that we are participating with 

the Director on the steering committee to look at—and I think it 

is absolutely essential that we have a mutual recognition in order 

to preserve transatlantic commerce and provide better choices and 

stability for our consumers. 

Mr. HURT. Excellent. Thank you. 

I want to thank each of you for joining us today and for providing 

your insight and comments to our committee. 

I ask unanimous consent to insert the following material into the 

record: a May 17, 2012, statement from the American Insurance 

Association; a May 17, 2012, statement from the Council of Insurance Agents and Brokers; a May 17, 2012, statement from Property 

Casualty Insurers Association of America; a May 17, 2012, statement from the National Association of Mutual Insurance Companies; and a 2009 U.S. International Trade Commission report entitled, ‘‘Property and Casualty Insurance Services: Competitive Conditions in Foreign Markets.’’ Without objection, those documents 

will be admitted into the record. 

The Chair notes that some Members may have additional questions for this panel, which they may wish to submit in writing. 

Without objection, the hearing record will remain open for 30 days 

for Members to submit written questions to these witnesses and to 

place their responses in the record. 

With that, once again, I thank the members of the committee, 

and I thank the members of the panel for joining us. And this hearing is adjourned. 

[Whereupon, at 4:10 p.m., the hearing was adjourned.] 

(29) 

A P P E N D I X 

May 17, 2012 

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