Reinsurance underwriting activities in Mexico are limited to those insurance companies that are authorised to undertake reinsurance operations (either exclusively or as one of their permitted operations) and to foreign reinsurance companies that are registered with the General Registry of Foreign Reinsurers. The register is maintained by the Ministry of Finance and Public Credit and is updated annually. Under Mexican law, foreign reinsurance entities are not eligible for registration unless they provide evidence of their solvency and stability in the form of a certificate issued by an internationally recognised rating company.

The National Insurance and Bonds Commission has stated that in order to undertake reinsurance and rebonding activities in Mexico, foreign reinsurers must:

  • file an application, in which they must agree to be bound by Mexican law in respect of any transaction that is entered into in Mexico or has effects there; and
  • demonstrate a satisfactory credit rating issued by an international recognised company, such as AM Best, Moody's, Fitch or Standard & Poor's.

In order to provide evidence of its solvency and stability, the applicant must attain one of the following ratings:

  • AM Best - A++, A+, A, A-, B++, B+.
  • Moody's - Aaa, Aa1, Aa2, Aa3, A1, A2, A3, Baa1, Baa2, Baa3.
  • Fitch - AAA, AA+, AA, AA-, A+, A, A-, BBB+, BBB, BBB-.
  • Standard & Poor's - AAA, AA+, AA, AA-, A+, A, A-, BBB+, BBB, BBB-.

However, the ministry has recently imposed another requirement: the reinsurer must provide evidence of tax domicile if it is domiciled in a jurisdiction with which Mexico has entered into a double tax treaty (eg, a copy of Form 6166 in the case of US tax residents). This requirement does not apply to reinsurers that are tax resident in a non-treaty jurisdiction.

Registered reinsurers must request annual renewal by no later than October 1 each year. This year, they will need to ensure that a tax residency certificate - if required - is obtained and submitted in time. The renewals for the forthcoming year are published by the ministry before the end of the current year.

For further information on this topic please contact Carlos Ramos Miranda at Barrera, Siqueiros y Torres Landa, SC by telephone (+52 55 5091 0000), fax (+52 55 5091 0123) or email ([email protected]).