Not only has there been a move toward the convergence of financial services in the United States, financial services in general and insurance in particular are becoming increasingly internationalized. Pressures for the increasing globali-zation of the insurance business include the traditional practices aimed at spreading risks internationally; the internationalization of economies in general such as the single European market and the North American Free Trade Agreement; the erosion and/or elimination of barriers against the movement of money, information, ideas, and technology across national borders; international clients seeking insurance from a single insurer functioning in the areas in which the client functions; business acquisitions and alliances across national boundaries; the pressures of competition; and the entrance of new players, such as international banking operations, into the insurance field.

Pressures for increased internationalization of financial services which are specifically related to life insurance are as follows. The broadened leeway provisions in state insurance investment regulation are likely to be increasingly used to take advantage of investment opportunities in the European common market, the emerging North American common market, and the dynamic Asian countries. Newly acquired investment portfolio management skills by life insurers are now being marketed by several leading U.S. life insurers to generate U.S. real estate and securities portfolios for foreign institutional investors. More importantly, the imposition of more stringent capital standards in the United States for life insurers give rise to foreign capital markets as likely sources of additional capital.

Although international trade in goods and services still confront a host of government-imposed trade barriers, the evolvement of bilateral discourse and agreements between nations, regional trading blocks, and worldwide trade negotiations have led to a push for increased free trade. Of particular note are the European Community, the General Agreement on Trade and Tariffs, and the North American Free Trade Agreement. As financial services in general and insurance in particular become increasingly internationalized, pressures mount on insurance regulatory systems to continually adjust to the changing environment within which they function.