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NAFTA VICTORY IN HOUSE APPLAUDED BY U.S. INTERNATIONAL INSURANCE INDUSTRY

 WASHINGTON, Nov. 17 /PRNewswire/ -- The International Insurance Council (IIC) congratulates the U.S. House of Representatives for its historic vote to approve the North American Free Trade Agreement (NAFTA).
 "The House vote in favor of NAFTA is confirmation of America's commitment to free and open trade and a growing global economy," said H. Edward Hanway, chairman of the IIC.
 Hanway, who is also president of CIGNA International Property and Casualty, noted that: "The treaty will provide the basis for real and lasting economic benefit for the United States, Mexico and Canada. I am confident that this agreement will provide increased opportunity for U.S. insurers interested in international expansion," he said.
 "The NAFTA victory is an astounding political accomplishment, demonstrating great resolve and political drive by President Clinton," said Gordon Cloney, president, IIC. "It will enormously increase the president's prestige on trade issues around the world.
 "NAFTA will strengthen and bolster the U.S. international insurance industry and help position it for growth into the 21st Century. For U.S. insurers, a trade agreement with Mexico opens a major market previously closed to them," he said, adding, "it also sets a precedent for trade arrangements with other countries in Latin America."
 Mexico is the largest insurance market in Latin America and the second largest protected market in the free world, according to Cloney.
 He observed that the Mexican insurance industry, which grew at a 30 percent rate in 1992, could expand from a present $4.5 million in premium to $30 billion-$40 billion by the year 2010 and advance from being the world's 28th largest market to be one of the world's top 10 markets.
 "This assumes per capita insurance premium in Mexico grows to the level of Spain -- a good medium term possibility in an ETA-stimulated economy," Cloney said.
 In pursuing a free trade agreement, Cloney said that the U.S. sought to fully open the Mexican market for U.S. direct insurers and reinsurers -- permitting subsidiary corporations in addition to joint ventures.
 "Protection had isolated the market and it did not offer a full range of contemporary products and services," he said. American insurers have much to contribute to Mexico in addition to capital and management skill, according to Cloney. "We aggressively advance loss control technology to address problems such as industrial and environmental risks, and our marketing and new product `know how' can extend personal financial security more widely within Mexican society."
 The IIC's policy recommendations for a U.S.-Mexico insurance understanding form the core of the NAFTA insurance provisions. U.S. insurance companies meeting fair authorization requirements will be granted a position to compete in Mexico on "national treatment" terms.
 "The U.S. insurance industry is committed to NAFTA," said Cloney. "For many years, the Mexican market was closed to non-Mexican companies. But they've recently changed the rules, to help the Mexican market increase insurance capacity and provide new products to serve a growing economy. NAFTA completes market liberalization."
 The IIC, which represents U.S.-based insurers who sell in foreign markets, has a long history of working successfully to build international insurance. Over 20 years ago, it was the first U.S. trade association to call for negotiations to reduce barriers to international trade in insurance and other services.
 The IIC pioneered the service trade provisions now being negotiated in the General Agreement on Tariffs and Trade (GATT). In recent years, the IIC actively promoted bilateral agreements with Korea, Taiwan and Canada, which helped open those countries' insurance markets to greater international participation.
 In 1992, the council testified before Congress and the U.S. government's International Trade Commission in support of the NAFTA provisions concerning insurance, and organized the U.S. Insurance Industry Coalition on NAFTA, which worked to promote ratification.
 As a result of the passage of NAFTA, President Clinton is now well- positioned to push for opening of Asian markets at the Asia-Pacific Economic Cooperation forum in Seattle, which opens Thursday. NAFTA will also be helpful to the United States in the ongoing GATT talks.
 IIC now urges quick U.S. Senate ratification of NAFTA.
 "While NAFTA has to be approved by the Senate, it is not expected to involve the kind of challenge raised by NAFTA opponents in the House," said Cloney.
 -0- 11/17/93
 /CONTACT: Peter Weber for the International Insurance Council, 202-833-1580/


CO: International Insurance Council ST: District of Columbia IN: INS SU: EXE LEG

MH-KD -- DC037 -- 5796 11/17/93 22:32 EST
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Publication:PR Newswire
Date:Nov 17, 1993
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