• Resolution SS.SG No. 213/17 regarding "Regulations to enroll and renew the registration of reinsurers at the Insurance Superintendence's registry" nbsp;
On December 28, the Central Bank of Paraguay issued Resolution SS.SG. No. 213/17 regarding "Regulations to enroll and renew the registration of reinsurers at the Insurance Superintendence's registry", that updates and set forth new rulings to enroll and renew the registrations of foreign reinsurance companies before the Insurance Superintendence's registry.
Regarding the above, Resolution 213 now establishes the obligation of foreign reinsurers to submit all foreign documents dully legalized before the Paraguayan consulate or apostilled (Art. 11).
Additionally, Resolution 213 sets forth that only foreign reinsurers with the required minimum risk rating ("BBB" from Standard & Poor's, "B+" from AM Best, "Baa" from Moody's Investors Service, or "BBB" from Fitch Ratings) can apply for a new registration or renew the currently valid registry, deleting the prior existing option of registering foreign reinsurers that only have a registration in one of the countries members of the Latin-America's Association of Insurance Regulators (Associacion de Supervisores de Seguros de Latinoamerica or ASSAL) plus a determined solvency margin without a minimum risk rating (Arts. 6 and 7).
Moreover, it is also established that the registration can be cancelled by (Art. 8):
- not complying with the minimum risk rating required
- not answering the Insurance Superintendence's requests of information
- not complying with the obligations established in the subscribed agreements
- sanctions applied by the regulator but not yet shown in the reinsurer's minimum risk rating
On the other hand, Resolution 213 sets forth the obligation of insurance companies to verify the general condition and the risk rating of the reinsurers they work with (Art. 10).
Finally, Resolution 213 also establishes the obligation of reinsurers to notify to the Insurance Superintendence of changes on any aspects, data or requirements set forth in said resolution that occur after the registration is granted (Art. 9).
• Resolution SS.SG. No. 214/17 regarding "Rulings for reinsurance brokers"
On December 28, the Central Bank of Paraguay issued Resolution SS.SG. No. 214/17 of "Rulings for reinsurance brokers" that updates the requirements to enroll and renew the registration of reinsurance brokers before the Central Bank of Paraguay, and sets forth their obligations, prohibitions and the data that must be included in the mandatory quarterly reports.
Regarding the requirements to enroll or renew the registration of reinsurance brokers, in addition to the currently valid requirements (which were set forth in the now repealed resolution SS.SG No. 15/96), it is also established that local representatives or proxies must register their signatures before the Insurance Superintendence, attaching a notarized copy of their valid IDs (Art. 3 sub. 3)
Moreover, in addition to the obligations set forth in resolution SS.SG. No. 15/96, reinsurance brokers must (Art. 5):
- accurately advise the local insurer regarding the conditions of the agreement and the best options according to its needs
- notify the Insurance Superintendence within 30 days of the occurrence of: annulments, rescissions or modifications of the reinsurance contracts that they intermediated in
- verify that the reinsurance contracts remain valid and renew them when required by the local insurer
- notify in written form to the reinsurer about any risk variations
- verify the Insurance Superintendence's website to comply with the rulings that are issued
- notify in written form within 30 days to the Insurance Superintendence of any variations of the documents initially submitted to request the registration or renewal
- open their offices to the Insurance Superintendence's officers and provide any information they require
- provide to the Insurance Superintendence all the information they require regarding their brokerage assignments
- include the data of their Paraguayan representatives and contact details on their respective websites
In addition, it is established that the reinsurance brokers cannot (Art. 9):
- offer, quote, manage and place risk insurance coverages on reinsurers not registered before the Insurance Superintendence
- withhold money or documents in payment for reinsurance premiums
- carry out assignments as insurance broker or adjuster and receive compensation for said duties
- withhold amounts meant to be used as payments for claims' compensations without a written authorization of the local insurer
Lastly, Resolution 214 also established that the mandatory quarterly reports must contain the following: (i) policy number; (2) section; (3) policy's validity; (4) detain of the insured or the policyholder; (5) type of reinsurance; (6) reinsurer's code number; (7) reinsurer's percentage of participation in the risk; (8) date of issuance of the cover note; (9) reinsurance's validity; (10) cover note's number; (11) date of expiration of the payment guarantee; (12) observations when applicable (Art 8).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.