A new reinsurance resolution has just come into force in Argentina containing new rules for conducting reinsurance business, including a requirement to set up a local branch.
Resolution 35,615 was published on February 21, 2011 and is likely to have have a significant impact on the operations of foreign reinsurance companies. Under the previous regulations, foreign reinsurers could be authorized to issue reinsurance contracts from their home jurisdictions as long as they complied with certain requirements and were registered with the Insurance Superintendency. Now, however, foreign reinsurers must set up a local branch in Argentina in order to issue reinsurance contracts, unless a specific waiver is obtained from the Superintendency to write a contract from the reinsurer's home jurisdiction because such contract is 'exceptional' and cannot be covered by the local market. Even in these exceptional cases, foreign reinsurers will still need to be registered with the Superintendency.
The new resolution provides a similar local branch requriement for foreign brokers, and it also bars any foreign company whose head office is in a tax haven, tax shelter or other secretive or uncooperative jurisdiction - including Bermuda, Hong Kong and Puerto Rico - from being authorized in Argentina. Foreign reinsurers that are currently registered with the Superintendency have until September 1, 2011 to comply with the new provisions.
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