On April 4, 2013 the Federal Official Gazette published an executive order issuing the Insurance and Surety Companies Law.
The Insurance and Surety Companies Law will come into full force and effect in two years, calculated from the date of the publication, and repeals the Mutual Insurance and Insurance Companies Law and the Federal Surety Companies Law in their entirety.
The purpose of this Law is to govern the incorporation and operation of insurance, surety, and mutual insurance companies, as well as the activities and transactions that they are allowed to carry out. Some of the relevant aspects of the Law are:
- Insurance company financial solvency will be submitted to "periodic stress tests," using a simulation of extreme adverse circumstances, in order to evaluate whether or not the company has enough capital. The results will be reviewed by the Board of Directors.
- The law provides for "security insurance" for the payment of an indemnity to an insured for damages caused for breach of an insurance policy.
- Insurance and surety companies may adopt their own investment policies, with clear objectives, a balance of assets and liabilities, and with enough liquidity, all in relation to the nature and currency in which their obligations are assumed.
- The insurance companies will have the obligation to disclose their financial situation to the market, as well as provide information regarding their risk profile and capitalization levels, and to have credit ratings.