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AB 2002 no. 50 CENTRAL LEGISLATION REGISTER September 30, 2015

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==================================================================== Title: STATE DECREE, containing general measures for the implementation of Articles 2 (fourth paragraph), 14 (fourth paragraph), and Article 31 of the State Ordinance on Supervision of the Insurance Industry (AB 2002 no. 82) Short title: State Decree on Special Enterprise Risk Insurers Reference: AB 2002 no. 50 Amendments: AB 2015 no. 47

§ 1. Introductory Provisions Article 1 In this state decree, the following terms are understood as: special enterprise risk insurer or reinsurer: an insurance company that insures or reinsures risks arising exclusively or predominantly from the business or professional activities of shareholders or members of enterprises connected in a group, or of participants in an association; license: a license as referred to in Article 5, first paragraph, of the State Ordinance on Supervision of the Insurance Industry (AB 2000 no. 82); State Ordinance: the State Ordinance on Supervision of the Insurance Industry.

Article 2

1. Special enterprise risk insurers are distinguished into: a. pure special enterprise risk insurers; b. associative special enterprise risk insurers; c. rentable special enterprise risk insurers; d. other special enterprise risk insurers.
2. Special enterprise risk insurers as referred to in the first paragraph, items a and b, insure or reinsure no other risks than those of their shareholders or members, respectively.
3. A special enterprise risk insurer as referred to in the first paragraph, item c, insures or reinsures no other risks than those of the participating institutions.

Article 3 A special enterprise risk insurer does not enter into agreements covering statutory liability as referred to in the State Ordinance on Motor Vehicle Liability (AB 1999 no. GT 12).

§ 2. License Application Article 4

1. The work program to be submitted by a special enterprise risk insurer pursuant to Article 6, first paragraph, item d, of the State Ordinance contains at least: a. a statement of the nature of the risks that the special enterprise risk insurer intends to cover, b. the technical bases that the special enterprise risk insurer intends to apply, in particular the bases for calculating tariffs and technical provisions, c. an explanation regarding the guiding principles in the field of reinsurance, d. insight into the presence of the solvency margin required under Article 8, first paragraph, and an estimate of the financial means to cover the solvency margin, and e. a five-year financial forecast, including an estimate of the solvency margin and liquidity position.
2. An applicant with its registered office outside Aruba must be authorized to conduct the insurance business in the country where its registered office is located.
3. The Bank establishes the form of the application form.

Article 5

1. Without prejudice to Article 7 of the State Ordinance, the Bank grants a license to a special enterprise risk insurer, provided that it has been established that the following conditions are met: a. the daily management of the special enterprise risk insurer is determined by at least one natural person residing in Aruba; b. the special enterprise risk insurer possesses a solvency margin as referred to in Article 8;
2. A license is granted only for the conduct of the special enterprise risk insurer business in one of the groups mentioned in Article 2, first paragraph.
3. If the daily management of the special enterprise risk insurer is determined by a representative, Articles 7 (first paragraph, items c and d) and 17 of the State Ordinance apply mutatis mutandis to the representative.
4. A special enterprise risk insurer maintains its financial administration for the insurance business it conducts at its offices in Aruba and keeps all relevant documents concerning this insurance business there for a period of at least ten years.

§ 3. Special Supervisory Provisions Article 6

1. A special enterprise risk insurer shall submit its annual accounts to the Bank annually within six months after the end of the financial year.
2. The annual accounts of a special enterprise risk insurer with its registered office outside Aruba cover the entire business, wherever it is conducted.
3. The annual accounts of a special enterprise risk insurer are accompanied by a statement regarding the accuracy of the data therein, signed by an accountant.
4. A special enterprise risk insurer shall annually submit an actuarial report to the Bank within six months after the end of the financial year, accompanied by a statement from an actuary.
5. The Bank may establish the form, content, and bases of the annual accounts and the actuarial report.

Article 7 A special enterprise risk insurer maintains adequate technical provisions in accordance with Article 13 of the State Ordinance, which are fully covered by assets.

Article 8

1. A special enterprise risk insurer possesses a solvency margin of:
   • in the case of a pure special enterprise risk insurer, at least Afl. 300,000;
   • in the case of an associative special enterprise risk insurer, at least Afl. 500,000;
   • in the case of a rentable special enterprise risk insurer, at least Afl. 1,000,000;
   • in the case of other special enterprise risk insurers, a minimum solvency margin to be determined by the Bank, which will vary between Afl. 300,000 and Afl. 1,000,000.
2. The Bank may prescribe an additional solvency margin based on the type, size, and nature of the risks that a special enterprise risk insurer insures or reinsures.
3. The solvency margin may be held in the form of cash or an irrevocable guarantee issued by a bank established in Aruba, which holds a license as referred to in Article 4 or 24 of the State Ordinance on Credit Institution Supervision (AB 1998 no. 16).

Article 9

1. If a special enterprise risk insurer no longer possesses the minimum solvency margin required under Article 8, or if the Bank observes other signs that in its opinion endanger or may endanger the solvency of a special enterprise risk insurer, it shall submit a financing plan for approval to the Bank within a period determined by the Bank, indicating how and within what time frame the solvency margin will be restored to the required level.
2. Article 15 of the State Ordinance does not apply to special enterprise risk insurers.

Article 10 Without prejudice to Article 8 of the State Ordinance, the Bank may revoke the license of a special enterprise risk insurer if the solvency margin is not brought to the required level within the period approved by the Bank in accordance with Article 9.

§ 4. Cost Reimbursement Article 11 A company applying for a license as a special enterprise risk insurer is liable to pay the Bank a fee of Afl. 1,000 for the processing of its application.

Article 12

1. The costs referred to in Article 30 of the State Ordinance, which are owed by a special enterprise risk insurer, relate to the various tasks performed by the Bank under this state decree and are charged annually to the respective special enterprise risk insurer. The costs amount to a maximum of Afl. 7,500 and are paid within a period determined by the Bank.
2. For the first time, payment of the invoice referred to in the first paragraph is due after the end of the first full financial year following the issuance of the license.

§ 5. Final Provisions Article 13

1. This state decree enters into force on the day following its publication in the Government Gazette of Aruba.
2. It may be cited as the State Decree on Special Enterprise Risk Insurers.