The Superintendency of Insurance (SIS) issued three new resolutions regulating the activity of reinsurance companies and reinsurance brokers.
Resolution No. 179/17 of October 2017 establishes the Reinsurance Management Rules, and is applicable to insurance companies established in the country, reinsurance brokers and reinsurers. Said Resolution regulates, among others, the obligation to submit to the SIS all documentation related to reinsurance contracts entered into by insurers. It also establishes certain mandatory clauses that all reinsurance contracts must contain. On the other hand, it establishes the obligation of local insurers to keep certain specific information at the disposal of the SIS. Additionally, it establishes that any reinsurance contract entered into in violation of the Resolution will not be enforceable against the SIS for purposes of proving compliance with legal and regulatory standards, nor will they be taken into account for technical provisions, without prejudice to any administrative sanctions that may apply. It is understood that the latter prohibition includes the fact of entering into reinsurance contracts with foreign reinsurers not registered with the SIS. Finally, the Resolution establishes that Resolution No. 26/08 (on the periodicity of reinsurance contracts submission and formality for registration in the SIS) and Resolution No. 145/12 (on the commitments of the reinsurer and/or reinsurance broker derived from the judicialization of cases of indemnity rejections) are repealed, as well as any other that opposes the provisions of Resolution No. 179/17.
On the other hand, Resolution No. 213/17 of December 2017 regulates the Rules for the Registration, Revocation and Maintenance of Reinsurance Companies in the SIS Register. This resolution is equally applicable to reinsurers, reinsurance brokers and local insurers. With respect to foreign reinsurers, it establishes that their participation in the local market is authorized as long as they comply with the requirements of this Resolution, and that the SIS by means of an administrative act may authorize the registration of a foreign reinsurer in the local registries in order to authorize its operation from abroad. The registration is valid for a term of up to 2 years and not less than 1 year, with a uniform expiration date as of March 31. This Resolution regulates the requirements that foreign reinsurers must meet when applying for registration with the SIS, among which are minimum international ratings depending on the rating agency. Finally, the Resolution repeals Resolution No. 13/2010 (on requirements and procedures for the registration, renewal, maintenance and exclusion of foreign reinsurers in the SIS registry) and Resolution No. 145/12 (referred to earlier in this article).
In turn, Resolution No. 214/17 of December 2017 establishes the Rules for Reinsurance Brokers, and is applicable to both reinsurance brokers registered with the SIS and their representatives. The Resolution establishes the requirements to register or renew the registration to act as a reinsurance broker, whether they are individuals or legal entities, domestic or foreign. The Resolution provides that the registration or renewal shall be valid for up to 2 years, and also mentions the persons who may not act as reinsurance intermediaries or as representatives thereof, as well as the information that must be kept at the disposal of the SIS and that which must be submitted to the SIS every quarter. Finally, the Resolution repeals Resolution No. 15/96, Resolution No. 3/98 and Resolution No. 285/07.
For more information about the new reinsurance provisions and compliance, please contact Carlos Vouga (cvouga@vouga.com.py) or Cynthia Fatecha (cfatecha@vouga.com.py).
