The Superintendent of Insurance prohibited the payment outside Argentina of claims and surrender values of life insurance policies with foreign savings.
Through Resolution 36,746, of May 4, 2012, the Superintendent of Insurance (the "SSN", after its acronym in Spanish) prohibited the payment outside Argentina of claims and surrender values of life insurance policies with foreign savings. This new resolution complements a series of regulations that restrict the right of insurers to pay claims abroad almost entirely.
The new resolution of the SSN is consistent with the insurers' obligation to repatriate all their investments and funds established in late 2011 (see Insurance News 7 " Changes in the Investment Regime for Insurers" and Insurance News 8 " Repatriation of Investments and Funds: Insurers Are Exempted from the Mandatory Reserve Requirement"), and the ban on maintaining investments and funds abroad (article 2 SSN Resolution 36162). The compulsory repatriation affected, among others, life insurance policies with savings abroad. In accordance with Resolution 36,746, policyholders and beneficiaries of these policies cannot collect claims or surrender values outside Argentina.
Despite the new restrictions introduced by Resolution 36,746 affecting life policies with savings abroad, it was already practically impossible in most cases for insurers to pay claims outside Argentina under most types of policies.
Moreover, insurers cannot maintain funds abroad (article 2 Resolution 36162). Consequently, in principle insurers may only keep in Argentina the funds necessary to meet their obligations to policyholders. Under these conditions, the applicable exchange regulations do not enable an insurer to access the Argentine Single Free Foreign Exchange Market (Mercado Unico y Libre de Cambios, or "MULC") to obtain foreign currency to pay Argentine residents. Insurers would only be entitled to access the MULC if the beneficiary or insured were a foreign resident (Code 620, Communication "A" 4525 BCRA), provided such foreign resident did not seek to collect a benefit or surrender value under a life insurance policy with savings, in which case the prohibition of Resolution 36,746 would apply.
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