He pointed out that auto insurance provides a social value by increasing safety for roads and vehicles.

"Auto insurance is by far the largest line of property-casualty insurance in the U.S. with more than one thousand companies in the market," Mr. Snyder said. "In recent times it has been relatively profitable for insurers and stable for consumers in large measure due to advances in highway safety."

Mr. Snyder also argued that these markets should be open to insurers from other countries. Healthy auto insurance markets, he said, typically have regulatory systems designed to foster competition and open to both foreign and domestic insurers.

"One of the biggest challenges U.S. auto insurers face is dealing with 51 different regulatory systems. Auto insurance is subject to excessive price and form regulation in some states which has led to serious disruptions in those markets," he said. "Inevitably this type of over-regulation generally leads to suppressing competition, which in turn reduces choices for consumers and often creates an upward pressure on rates."

Should developing countries restrict insurers too greatly, he said, they would eliminate the benefits of a solid auto insurance market.

"Countries should be careful not to over-regulate insurance because it is counter-productive in terms of attracting foreign insurance capital and providing more choices to consumers," Mr. Snyder argued. "Regulation should be focused on solvency and market conduct issues, not prices and forms."

The issue of safety is becoming increasingly important, Mr. Snyder said, noting that by 2020 highway crashes are expected to become the third greatest disease burden worldwide measured in economic losses.

"Given this sobering fact, developing countries would greatly help their economic development and safety promotion efforts by creating the conditions necessary for rapid growth in the private auto insurance market," Mr. Snyder said.

"This is because insurers price their products according to safety conditions and are the primary advocates for rigorous highway safety laws. As such, a robust insurance market can offload costs from government and insurers can become major forces in the effort to prevent crashes and the resulting economic drain on societies."