European insurance companies are pressing for mainland market access ahead of the bilateral negotiations between the European Union and Beijing on the mainland's World Trade Organisation accession. No date has been set for the talks. According to Monday's bilateral pact between Washington and Beijing, Beijing will remove all geographical restrictions imposed on foreign insurers five years after the accession. It would also allow foreign general life companies to form wholly owned subsidiaries in 2 years after accession, although it would limit foreign ownership in life-insurance operations to a maximum 50 per cent. Reinsurance is completely open upon accession. Life insurers may now choose their own joint-venture partners and are free of onerous joint-venture requirements and other internal branching restrictions. As part of the deal, Beijing would also expand the scope of activities to include group, health and pension insurance, to be phased in over five years, and to award licences solely on the basis of prudential criteria. EU Trade Commissioner Pascal Lamy earlier said the EU had 'specific interests' which were different from those of the United States, including greater access to the mainland's insurance sector, which the US was reportedly not focusing on. Allianz's Beijing chief representative Hans-Joerg Probst said: 'I hope the EU will achieve [greater access] in the negotiations with the Chinese. That is, European insurance companies will be given an equal market access as the Americans.' He cited American International Group (AIG) which has both life and general insurance licences in each of Shanghai, Guangzhou, Shenzhen and Foshan. AIG alone has eight licences, more than the sum of those of all European insurers. 'I trust that the EU commission will represent our interest. But to what extent the Chinese will be able to come forward any further to what already they have remains to be seen.' However, one observer argued that AIG, which boasts impeccable relations with mainland authorities, was by coincidence an US company, although European companies would use it as an excuse to lobby for better terms. However, industry practitioners said it could be difficult to remove geographical restrictions imposed on foreign insurance companies. INSURANCE
