Agreement No. 004-2019 Modifying Article 2 of Agreement No. 006-2017 on Shared Banking

Republic of Panama Banking Superintendence AGREEMENT No. 004-2019 (of April 30, 2019) "By which Article 2 of Agreement No. 006-2017 is modified"

THE BOARD OF DIRECTORS in the exercise of its legal powers, and

CONSIDERING:

That following the issuance of Decree-Law No. 2 of February 22, 2008, the Executive Branch prepared a systematic ordering in the form of a single text of Decree-Law No. 9 of February 26, 1998, and all its modifications, which was approved by Executive Decree No. 52 of April 30, 2008, hereinafter the Banking Law;

That in accordance with the provisions of numerals 1 and 2 of Article 5 of the Banking Law, it is the objective of the Banking Superintendence to ensure the maintenance of the solidity and efficiency of the banking system; as well as to strengthen and foster the favorable conditions for the development of the Republic of Panama as an international financial center;

That in accordance with Article 4 of the Banking Law, the Banking Superintendence shall have exclusive competence to regulate and supervise banks, the banking business, and other entities and activities assigned to it by other laws;

That in accordance with numeral 5 of Article 11 of the Banking Law, it corresponds to this Superintendence to establish, within the administrative scope, the interpretation and scope of legal or regulatory provisions in banking matters;

That Agreement No. 006-2017 of July 4, 2017, dictates new provisions on shared banking, expanding the concept so that financial entities established in Panama and belonging to the same economic group could share offices and/or personnel;

That Law No. 12 of April 3, 2012, which regulates the insurance activity and dictates other provisions, establishes in its Article 3 numeral 9 that general license banks may subscribe marketing contracts with insurance companies to offer and promote the conclusion of insurance contracts with third parties on their behalf;

That Article 50 of Law No. 12 of April 3, 2012, provides that insurance companies may offer their products through alternative marketing channels, using the network of said companies for contact with clients and for the marketing of their products;

That in working sessions of this Board of Directors, the need and convenience of modifying Agreement No. 006-2017 has been manifested, adapting its provisions in compliance with the provisions of Law No. 12 of April 3, 2012.

AGREES:

ARTICLE 1. Article 2 of Agreement No. 006-2017 is hereby amended as follows:

"ARTICLE 2. To consider the authorization requests described in the previous article, the Superintendence will take into account the following:

a. The interested parties must belong or be part of the same economic group; b. Authorizations will be granted provisionally or definitively, at the discretion of the Banking Superintendence, according to the specific circumstances presented in the request and the particularities of the interested parties; c. In no case shall shared administration extend to the areas and personnel for public attention (front office), but it must be permitted that the client can clearly and at all times recognize with which bank or entity the operations are being carried out; and d. The products offered to the public and their letterhead stationery must clearly identify the bank or entity with which one is operating.

PARAGRAPH: The provisions in literal c. of this article, regarding the prohibition on using areas and personnel for public attention (front office), shall not be applicable to banks that provide services as alternative marketing channels, by virtue of a contract signed with an insurance company under the parameters and conditions established in Law No. 12 of April 3, 2012."

ARTICLE 2. EFFECTIVENESS. This Agreement shall enter into force from its promulgation.

Given in the city of Panama, on the thirty (30) day of the month of April of two thousand nineteen (2019).

LET IT BE COMMUNICATED, PUBLISHED, AND COMPLIED WITH.

THE PRESIDENT, THE SECRETARY, Luis Alberto La Rocca Joseph Fidanque III