U.S. Queries China's New Insurance Industry Regulations

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By Bryce Baschuk

June 6 — Proposed Chinese requirements for insurance companies to purchase secure and controllable computer hardware and equipment pose concerns for U.S. companies doing business in China, U.S. trade officials said.

The U.S. questioned whether the new procurement policy requires insurance companies in China to use “indigenous or local” computer hardware and equipment, according to a World Trade Organization (WTO) document that is dated June 2 but was made public June 6.

The U.S. said it was also concerned that the regulation would force companies to purchase “indigenous encryption technology” that might be incompatible with other international insurance systems.

“The draft provisions on ‘Insurance System Informatization’ have elicited a great deal of concern from international stakeholders,” the U.S. document said. “Can China please confirm that China is not planning to move forward quickly with any such draft?”

TRIMS Violation?

The U.S. questioned the regulations in the context of the WTO Agreement on Trade-Related Investment Measures (TRIMS), which prohibits WTO countries from imposing rules that discriminate against foreign products or lead to quantitative restrictions.

The China Insurance Regulatory Commission indicated it would impose the Insurance System Informatization measure in an April 19 WTO Committee on Technical Barriers to Trade notification.

China is expected to address the issue at the TRIMS Council meeting scheduled to be held June 7 at the WTO's headquarters in Geneva.

Last year the U.S. criticized China for a set of domestic technology procurement requirements for its commercial banking sector that China said was aimed at improving the cybersecurity for the sector (82 ITD, 4/29/15).

To contact the reporter on this story: Bryce Baschuk in Geneva at correspondents@bna.com

To contact the editor responsible for this story: Jerome Ashton at jashton@bna.com

For More Information

The WTO document is available at http://src.bna.com/fDT.