The Argentinean Superintendent of Insurance (Superintendencia de Seguros de La Nacion –“SSN”) made relevant amendments to the General Regulation of the Insurance Activity (“RGAA”) to increase the license operations requirements of insurance and reinsurance companies.
The relevant amendments were made to the section 7 of the RGAA which was modified through the Resolution nº 37.499. These changes are in accordance with the new rules approved by the SSN last year and the main points are set out below:
- Upon analysis of the request for authorization made by an insurance or reinsurance company, SSN will consider the “market convenience” of the project and the destination of the economic and human resources which must be reverted into capital investment in accordance with the evolution of the national economy, in order to boost employment and reinvest the funds generated in the country;
- Foreign branch companies domiciled in countries or areas without global cooperation agreement against money laundering, in accordance with FATF (Financial Action Task Force), will not be allowed;
- Companies will not be authorized to use insolvent insurance or reinsurance companies’ names, or surname of natural persons (mainly if this person is a shareholder or stakeholder of the company);
- The initial capital contribution must be notified in order to give evidence of company’s solvency;
- When the requesting company is part of an economic group, reference in relation to the corporate group structuring as well as identification of all members companies and information about its operations must be provided;
- Companies’ premises and financial costs in this regard must be detailed;
- Analysis of economical and business viability (including information related to products, risks involved, reinsurance agreements, products distribution, etc.) covering the period of 3 years must be provided;
- Individual shareholders of the companies must present the last 3 income tax statements and a complete description of operations. At list 2/3 of a company’s directors and officers must prove experience in insurance or reinsurance activity;
- Transfer of shares or capital contribution must be previously requested and authorized by SSN and must contain its purpose description, indication of numbers of share, class, votes, nominal value, total value of the shares’ transfer/ capital contribution and payment conditions.
Whilst the amendments brought by Resolution nº 37.499 in theory align the Argentinean insurance legislation with the international anti-money laundering policies, it has increased the local Government’s control over the insurance and reinsurance activity.