Regulatory Alerts2024-10-31 | NCF-08Technical Standards for the Technical Provisions Fund of Reciprocal Guarantee Societies and Reinsurers of Reciprocal Guarantee Societies
The Norms Committee of the Central Reserve Bank of El Salvador issued technical standards establishing the accounting applications for the constitution, use, and recovery of the Technical Provisions Fund for Reciprocal Guarantee Societies and their reinsurers. These regulations mandate a minimum fund equal to 1% of the active risk portfolio, which must be maintained through net profit allocations, non-refundable contributions, and grants, while specifying strict accounting treatments for each source. The standards also define the hierarchical order for utilizing the fund to cover losses and repeal previous accounting norms from 2004.
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