1. Domestic Regulation John Cooke
IAIS Observer Panel Presentation
John Cooke
Head of international Relations
Association of British Insurers

2. Domestic Regulation Key Features GATS Approach Transparency Necessity
Consistency with GATS
Conclusion

3. Domestic Regulation: Key Features
necessary, reasonable, proportionate, transparent
conducive to market-entry, facilitates innovation
technologically neutral
funded by administrative fees reflecting costs only
paves way for harmonised international standards

4. General Agreement on Trade in Services
Article III
publication of measures and notification to WTO
Article VI
applies where specific commitments given
requires publication, consultation, fair application processes, appeals, arbitration – domestic transparency

5. GATS: Prudential Carve-Out
“Notwithstanding any other provision of [GATS], a member shall not be prevented from taking measures for prudential reasons, including for the protection of investors [and] policyholders… or to ensure the integrity and stability of the financial system.”
But carve-out cannot be used to avoid GATS commitments

6. Two Questions of Balance
1. Balance between - strong domestic regulation; and
- avoidance of barriers to trade
2. Balance between - “horizontal” approach (all sectors); and
- “vertical” approach (sector-specific)
ESF believes in flexible balance in both cases

7. Transparency Transparency Annex Issues - Prior consultation
- Privacy and Confidentiality
- Emerging Markets
- WTO notifications
- special sectoral disciplines

8. Necessity Four Key Elements - legitimacy of regulatory objectives
- necessity of regulatory measure
- proportionality test
- periodic review

9. Consistency with GATS Requirements
Sectoral Regulation to cater for
commitments to market access and national treatment
“best practices” (additional commitments under GATS Article XVIII)
Example: The “Insurance Model Schedule”

10. Conclusion
Need for broad principles and regulatory approaches in GATS frameworks
Major insurance industry interest in GATS rules-based system
Major role for IAIS and other international standard-setting bodies