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Ownership and organisational requirements

Ownership of (re)insurers

Are there any restrictions on ownership of or investment in (re)insurers in your jurisdiction, including any limits on foreign ownership/investment?

There are no specific restrictions.

What regulations, procedures and eligibility criteria govern the transfer of control of/acquisition of a stake in a (re)insurer?

The prior approval of the Argentine Superintendence of Insurance (SSN) is required for any share transfer of insurers or local reinsurers. Until the SSN has given its authorisation, the transfer cannot take place. To apply for the SSN’s approval, the following information on the proposed transfer must be submitted:

  • information on the main characteristics of the transaction;
  • the number of shares to be transferred, along with their class, votes, nominal value and negotiation value; and
  • the payment terms.

The information and documents to be submitted vary depending on whether purchasers are individuals or legal entities. In general, this includes:

  • affidavits on their assets and the origin and legality of funds;
  • criminal records;
  • a copy of their bylaws;
  • financial statements; and
  • information on members of the board of directors and other officers.

The SSN will evaluate whether purchasers are suitable, as well as their conduct and background.

Local antitrust rules may also require notification to the Antitrust Commission.

Organisational requirements

Must (re)insurers adopt a certain legal structure in order to operate? If no mandatory company organisation applies, what are the common structures used?

Insurers

Only entities with the following legal structures may apply to operate in the insurance market:

  • corporations, cooperatives or mutual societies;
  • branches or agencies of foreign insurers; and
  • national, provincial or municipal state-owned entities.

Reinsurers To act as local reinsurers, entities must have the following legal structure:

  • corporations, cooperatives and national mutual societies; and
  • branches of foreign reinsurance entities.

Do any particular corporate governance requirements apply to (re)insurers, including any eligibility criteria for directors and officers?

Directors must be persons suitable for the exercise of their function. This is evaluated based on their past activity at other insurers or financial entities, or in a function with similar responsibility in other public or private entities. At least two-thirds of the total number of directors must prove their experience in the insurance industry. The general manager and other managers with decisive powers in regard to decisions related directly to the insurance industry must also prove their suitability and previous experience in this industry.

The General Regulation of Insurance Activity further provides that members of the management and supervisory bodies cannot have been:

  • convicted of certain crimes;
  • disqualified from using a bank account;
  • penalised as directors or managers of a company declared bankrupt; or
  • declared responsible for the liquidation of an insurer.

Operating requirements

Authorisation procedure

Which (re)insurers must obtain authorisation from the regulator before operating on the market and what is the procedure for doing so?

Persons, goods and any other insurable interest of Argentine jurisdiction can be insured only with insurers licensed by the Argentine Superintendence of Insurance (SSN).

Reinsurance and retrocessions must also primarily be placed with local reinsurers. Local reinsurers are Argentine corporations, cooperatives and national mutual societies or branches of foreign reinsurance entities licensed by the SSN. Local reinsurers must have local capital.

Admitted reinsurers are foreign reinsurers which act from their home offices and must be registered with the SSN. Admitted reinsurers may also write Argentine risks subject to the following limitations:

  • contracts starting from July 1 2017 – up to a maximum of 50% of premiums ceded under the contract;
  • contracts starting from July 1 2018 – up to a maximum of 60% of premiums ceded under the contract; and
  • contracts starting from July 1 2019 – up to a maximum of 75% of premiums ceded under the contract.

To obtain a licence as an insurer or a local reinsurer from the SSN, a company must comply with the following General Regulation of Insurance Activity requirements:

  • It must have insurance or reinsurance activity as its exclusive corporate purpose.
  • It must comply with minimum capital requirements.
  • It must be registered with the Public Registry of Commerce.
  • It must file a feasibility report and business plan.

The SSN will also evaluate the integrity, experience and solvency of shareholders and officers.

An admitted reinsurer must comply with the following requirements to register with the SSN:

  • It must be set up and authorised to reinsure foreign risks.
  • It must have a minimum net worth.
  • It must prove that the legislation in force in its country of origin allows it to comply with its commitments (derived from reinsurance contracts) abroad in freely convertible currency.
  • It must provide evidence of credit ratings for the past three years.

Financial requirements

What are the minimum capital and solvency requirements for (re)insurers operating in your jurisdiction?

Insurers must have a minimum capital that depends on the highest of the following three parameters:

  • lines of business;
  • written premium; and
  • claims.

Local reinsurers must have a minimum capital that depends on the higher of the following two parameters:

  • Ps350 million (approximately $19.4 million at the time of writing); or
  • written premium.

Admitted reinsurers must have a net worth not lower than $100 million.

Do any other financial requirements apply?

Insurers and local reinsurers must also meet other financial and solvency ratios.

Personnel qualifications

Are personnel of (re)insurers subject to any professional qualification requirements?

Directors must be persons suitable for the exercise of their function. This is evaluated based on their past activity at other insurers or financial entities, or in a function with similar responsibility in other public or private entities. At least two-thirds of the total number of directors must prove their experience in the insurance industry. The general manager and other managers with decisive powers in regard to decisions related directly to the insurance industry must also prove their suitability and previous experience in this industry.

The General Regulation of Insurance Activity further provides that members of the management and supervisory bodies cannot have been:

  • convicted of certain crimes;
  • disqualified from using a bank account;
  • penalised as directors or managers of a company declared bankrupt; or
  • declared responsible for the liquidation of an insurer.

Business plan

What rules and requirements govern the business plans of (re)insurers?

To apply for an insurance or local reinsurance licence, an applicant must submit a business plan for the next three years, which must be filed along with a report issued by an independent actuary and an auditor, both registered with the SSN.

In general, business must include:

  • lines of insurance;
  • characteristics of the products;
  • risk profile;
  • provisions relating to the economic and financial situation of the entity;
  • reinsurance programmes;
  • marketing methods and channels;
  • computer systems projects;
  • appointment of certain officers;
  • staffing; and
  • outsourced activities.

Risk management

What risk management systems and procedures must (re)insurers adopt?

In their business and financial plans insurers must:

  • describe their underwriting and selection of risks profile;
  • indicate whether they will write catastrophic risks and provide certain specifications on how they will deal with them; and
  • describe policies, procedures and internal controls to fight against fraud in the insurance sector.

Reporting and disclosure

What ongoing regulatory reporting and disclosure requirements apply to (re)insurers?

Entities that have obtained the corresponding authorisation and licence from the SSN must submit a report on the evolution of their business and financial plans two years after they start operations.

Among other requirements, they must also:

  • keep accounting books and records;
  • file financial, accounting and other reports;
  • notify or seek approval for certain corporate actions (eg, shareholders' meetings and amendments to bylaws); and
  • keep certain minimum reserves and capital.

Other requirements

Do any other operating requirements apply in your jurisdiction?

Re(insurance) is a heavily regulated activity and many other operating requirements apply to the activity.

Non-compliance

What are the consequences of non-compliance with the operating requirements applicable to (re)insurers?

Insurers and local reinsurers are subject to penalties from the SSN for failure to comply with applicable legal and regulatory requirements, including warnings, fines, suspensions and revocation of the licence.

The SSN can suspend or cancel the registration of an admitted reinsurer when it fails to comply with the relevant regulatory requirements.

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