Welcome to Assignment 15
This assignment covers the international legal environment that affects insurance operations across borders. You will learn how companies enter foreign markets, the world's major legal systems, how international law works, the key players in global insurance, and the U.S. laws that regulate international business conduct — including the FCPA, the Patriot Act, and multinational trade agreements.
Exam Alert!
Key exam topics: absolute vs. comparative advantage, civil law vs. common law systems, public vs. private international law, expropriation vs. eminent domain, the FCPA anti-bribery provisions, territorial vs. worldwide tax systems, and the three WTO agreements (GATT, GATS, TRIPS).
What You Will Learn
1. How companies enter international markets (trade, licensing, franchising, subsidiaries, joint ventures)
2. The world's major legal systems and how they differ for insurance
3. Public vs. private international law, comity of nations, and sovereignty
4. Key players in international insurance and reinsurance markets
5. Financial considerations: currency risk, expropriation, accounting standards, taxation
6. U.S. laws affecting international business: FCPA, Patriot Act, tax code
7. Multinational organizations: UN, WTO, USMCA, EU, ASEAN, APEC
Assignment Parts
International Law Basics
Sources of international law, legal systems (civil vs. common law), treaties, sovereignty, comity, international courts, and methods of entering foreign markets.
Cross-Border Insurance
International insurance markets, major insurers and brokers, currency risk, expropriation, accounting standards (SAP/GAAP/IFRS), and taxation of international operations.
Global Compliance
FCPA anti-bribery rules, the Patriot Act, anti-money laundering, OFAC sanctions, tax code provisions, and multinational organizations (UN, WTO, EU, ASEAN, APEC).
Quick Reference Summary
Civil Law vs. Common Law
Civil = written codes, no precedent. Common = judge-made law, binding precedent.
Comparative Advantage
Both countries benefit from trade even if one is better at producing everything.
Expropriation vs. Eminent Domain
Expropriation = often no compensation. Eminent domain = must pay fair value.
FCPA
Prohibits bribing foreign officials. Two parts: anti-bribery + accounting provisions.
WTO Agreements
GATT (goods), GATS (services including insurance), TRIPS (intellectual property).
Accounting Standards
SAP (U.S. regulatory), GAAP (U.S. investors), IFRS (international). Same insurer, different results.