He also spent some time considering the question of which stocks might suffer if foreign insurers, facing large claims, were forced to sell shares.

It dictates when foreign insurers can begin selling policies in Dalian (no later than 2002).

However, the Insurance Commissioner must accept examinations conducted by other states on foreign insurers located in such states.

This makes it virtually impossible for foreign insurers to cut prices to lure away customers from Japanese companies.

Under regulations dealing with Lloyd's and some other foreign insurers, Lloyd's must establish a fund equal to its estimated claims.

Instead, he said, perhaps a half-dozen foreign insurers would be allowed in each year, and all would operate on a short tether.

The problem has set off a debate between state regulators and members of Congress over how, if at all, Washington should step in to license foreign insurers.

China has granted licenses to just 14 foreign insurers, including 5 American and 5 European companies.

The Europeans also want foreign insurers to be allowed to sell group insurance beyond the two cities where such sales are allowed.

The two sides remain far apart on the issue of deregulating the market to allow sales of policies by foreign insurers, the offical said.