Regulatory Alerts2024-08-15 | NRP-78Technical Standards for the Modification of Social Agreements of Insurance Companies
The Central Bank of El Salvador issued Technical Standards NRP-78 to regulate the modification of social agreements for insurance companies operating in the country. These standards are grounded in Articles 4, 8, 16, and 89 of the Insurance Companies Law and Articles 3, 4, and 7 of the Financial System Supervision and Regulation Law, which grant the Superintendency of the Financial System authority over corporate changes. The document establishes the legal framework and procedural requirements for insurance entities to amend their bylaws and social pacts under regulatory supervision.
CNBCR-06/2024 Approval: 15/08/2024 Validity: 30/08/2024
NRP-78 TECHNICAL STANDARDS FOR THE MODIFICATION OF SOCIAL AGREEMENTS OF INSURANCE COMPANIES
CENTRAL BANK OF RESERVE OF EL SALVADOR GOVERNMENT OF EL SALVADOR
THE COMMITTEE OF STANDARDS OF THE CENTRAL BANK OF RESERVE OF EL SALVADOR,
CONSIDERING:
I. That Article 4 of the Insurance Companies Law establishes that insurance companies constituted in El Salvador must be organized and operate as anonymous companies of indeterminate term, with fixed capital divided into registered shares, and may adopt any name they deem convenient, which must be distinct from that of any other existing company. They may operate as general insurance companies, life insurance companies, or specialized exclusively in surety bonds.
II. That Article 8 of the Insurance Companies Law establishes that the certification of the deed of incorporation must be presented to the Superintendency of the Financial System to verify whether the terms stipulated in the social agreement comply with the previously authorized projects and whether the social capital has been effectively paid in accordance with the authorization.
III. That Article 16 of the Insurance Companies Law establishes that insurance companies may increase their social capital at any time, as established in Article 89 of the aforementioned law.
IV. That Article 89 of the Insurance Companies Law establishes the procedure that an insurance company must follow to modify its social agreement.
V. That Article 3, letter b) of the Law of Supervision and Regulation of the Financial System, establishes that it is the competence of the Superintendency of the Financial System to authorize the constitution, operation, start of operations, suspension of operations, modification, revocation of authorization, closure, and other acts of the members of the financial system, in accordance with the legal, regulatory, or technical standards established regarding the matter.
VI. That Article 4, letter d) of the Law of Supervision and Regulation of the Financial System, establishes that the Superintendency shall have the power to authorize the public promotion, constitution, operation, and start of operations, modification of social agreements and bylaws, and, where applicable, merger of the members of the financial system, in accordance with what is provided in the special laws on the matter.
VII. That Article 7, letter e) of the Law of Supervision and Regulation of the Financial System, establishes that insurance companies, their branches abroad, and the branches of foreign insurance companies established in the country are subject to the supervision of the Superintendency of the Financial System.
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