ABSTRACT
This chapter introduces the Economic Community (EC)-1992 program in financial services. It focuses on the notion of reciprocity and deals with the American financial system in order to show how the EC-1992 program has forced the United States to adapt its own service industry. American financial firms have long been active in European financial markets and have established networks of institutions throughout the EC. The insurance industry is one of the most strictly regulated segments of the economy in many member states. The First Non-Life Insurance Directive, implemented in 1973, coordinated member states' laws governing the establishment of insurance business. National treatment requires a country to treat foreign firms and products in a manner identical to the treatment accorded its own domestic firms and products in like circumstances. Effective market access implies a substantial degree of access for foreign firms to the competitive opportunities potentially available in a market.
