Amending Circular 14/21 of the Single Circular on Insurance and Sureties

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DOF: 22/12/2021

Amending Circular 14/21 of the Single Circular on Insurance and Sureties

At the margin, a seal with the National Coat of Arms, which says: United Mexican States.- TREASURY.- Ministry of

Finance and Public Credit.-

National Commission of Insurance and Sureties.

AMENDING CIRCULAR 14/21 OF THE SINGLE CIRCULAR ON INSURANCE AND SURETIES

(Provisions 3.9.2., 22.1.2., 25.1.9., 25.1.19. and Annex 22.1.2.)

The National Commission of Insurance and Sureties, based on what is established in articles 366, fraction II, 367, fraction II, 372, fractions VI and XLII, 373 and 381 of the Law of Insurance and Surety Institutions, and

CONSIDERING

That in accordance with what is provided in article 300 of the Law of Insurance and Surety Institutions,

the accounts that Institutions and Mutual Societies must keep in their accounting will be adjusted to the

general provisions issued for this purpose by this Commission.

That through Annex 22.1.2. of the Single Circular on Insurance and Sureties, titled "Accounting Criteria

Applicable to Institutions, Mutual Societies and Holding Companies", the

National Commission of Insurance and Sureties made known the accounting criteria applicable from the 2016 fiscal year, which

the Institutions and Mutual Societies must observe when registering their assets, liabilities, capital, results

and off-balance sheet accounts.

That as a result of the review of the accounting criteria applicable to various accounts established in

Annex 22.1.2. it is necessary to modify it with respect to criterion l) Off-balance sheet accounts (B-12),

items 1) Group: Securities on deposit and 4) Group: Recovery guarantees for sureties issued and for

surety insurance, mainly in the way in which the registration of recovery guarantees must be carried out

regarding the so-called "Creditworthy Solvency", the registration of the interest generated by

cash guarantees during the term of the guarantee; and the registration of the guarantees of which the

sureties have been cancelled. Likewise, it is necessary to incorporate in said Annex an accounting criterion

applicable to accounts for debtors for claims paid not due, establishing that such

claims must be registered within item g) Debtors (B-7) of Series II. Criteria relative to

the specific concepts of insurance and surety operations. Likewise and as part of the

process of harmonization with the Financial Reporting Standards (NIF) issued by the Mexican Council of

Financial Reporting Standards, A.C. (CINIF), it is necessary to modify Annex 22.1.2. regarding the form

and terms of the accounting criteria that the insurance and surety sectors must apply, and to adapt the

"Application of particular standards" provided for in said Annex.

Likewise, as a consequence of the above, it is necessary to modify Provisions 3.9.2., 22.1.2.,

25.1.9. and 25.1.19. of the Single Circular on Insurance and Sureties, to update nomenclatures due to the application

of the NIF and the modification of Annex 22.1.2.

For the aforementioned reasons, the National Commission of Insurance and Sureties has resolved to issue the following

modification to the Single Circular on Insurance and Sureties, in the following terms:

AMENDING CIRCULAR 14/21 OF THE SINGLE CIRCULAR ON INSURANCE AND SURETIES

(Provisions 3.9.2., 22.1.2., 25.1.9., 25.1.19. and Annex 22.1.2.)

FIRST.- Provision 3.9.2. is modified, to read as follows:

3.9.2.

...

II.

Approve:

a)

The criteria to determine the methodologies that the Institution or Mutual

Society will use for the valuation of its investments, as well as the classification of said

investments in the following categories, according to the business model and the

investment strategy that the Institution or Mutual Society considers for them

in accordance with what is provided in Title 22 of these Provisions:

Negotiable financial instruments (NFI).

Financial instruments to collect or sell (FICS).

Financial instruments to collect principal and interest (FICPI).

b)

The transfer between the categories indicated in the previous item a), as well as the sale

in advance of Financial instruments to collect principal and interest (FICPI),

adhering to what is stated in the investment policy approved by the board of

directors and in Titles 8 and 22 of these Provisions.

SECOND.- Provision 22.1.2. is modified, to read as follows:

22.1.2.

...

I.

Series I. Criteria relative to the general scheme of accounting:

a)

Basic scheme of the set of accounting criteria (A-1);

b)

Application of Financial Reporting Standards (A-2), and

c)

Application of general standards (A-3);

II.

Series II. Criteria relative to the specific concepts of insurance and surety

operations:

a)

Cash and cash equivalents (B-1);

b)

Repealed;

c)

Securities lending (B-3);

d)

Repurchase agreements (B-4);

e)

Loans (B-5);

f)

Real estate (B-6);

g)

Debtors (B-7);

h)

Accounts receivable (B-8);

i)

Reinsurers and reinsurees (B-9);

j)

Permanent investments (B-10);

k)

Technical reserves (B-11);

l)

Off-balance sheet accounts (B-12);

m)

Premiums (B-13);

n)

Costs (B-14);

o)

Adjudicated assets (B-15);

p)

Derivative financial instruments and hedging operations (B-16);

q)

Effects of inflation (B-17);

r)

Claims (B-18);

s)

Salvages (B-19);

t)

Procedure for the prorating of income and expenses (B-20);

u)

Analogous and related operations (B-21);

v)

Of the accounting registration of premiums of short-term endowment insurance plans and of

flexible insurance plans (B-22);

w)

Leases (B-23);

x)

Co-insurance operations (B-24), and

y)

Surety Insurance (B-25).

III.

Series III. Criteria relative to the basic consolidated financial statements:

a)

Minimum catalog (C-1);

b)

Balance sheet (C-2);

c)

Statement of results (C-3);

d)

Statement of cash flows (C-4);

e)

Statement of changes in equity and capital (C-5), and

f)

Financial Statements of Holding Companies of Financial Groups (C-6).

THIRD.- Provision 25.1.9. is modified, to read as follows:

25.1.9.

...

XX.

The transactions carried out with related parties, in accordance with the criterion

accounting A-2, "Application of Financial Reporting Standards", contained in the Annex

22.1.2. of Title 22 of these Provisions, must disclose in aggregate the following

information:

...

FOURTH.- Provision 25.1.19. is modified, to read as follows:

25.1.19.

Holding Companies when preparing the Consolidated Balance Sheet and Statement of Results

referred to in Provision 25.1.17, will not be obliged to apply what is established in the

criterion A-2, "Application of Financial Reporting Standards", contained

in Title 22 of these Provisions, due to the reference it makes to NIF B-9,

"Financial reporting at interim dates", or that which replaces it, of the Standards of

Financial Reporting issued by the Mexican Council of Financial Reporting Standards,

A.C.

...

FIFTH.- Annex 22.1.2. of the Single Circular on Insurance and Sureties is modified.

TRANSITORY

SOLE.- This Amending Circular will enter into force as of January 1, 2022.

This is made known to you, based on articles 366, fraction II, 367, fraction II,

372, fractions VI and XLII, 373 and 381 of the Law of Insurance and Surety Institutions.

Respectfully,

Mexico City, December 14, 2021.- The President of the National Commission of Insurance and

Sureties, Ricardo Ernesto Ochoa Rodríguez.- Signature.

ANNEX 22.1.2.

ACCOUNTING CRITERIA APPLICABLE TO INSTITUTIONS, MUTUAL SOCIETIES AND

HOLDING COMPANIES

CONTENTS

Glossary of Terms.

Series I.

Criteria relative to the general scheme of accounting.

a)

Basic scheme of the set of accounting criteria (A-1).

b)

Application of Financial Reporting Standards (A-2).

c)

Application of general standards (A-3).

Series II.

Criteria relative to the specific concepts of insurance and surety

operations.

a)

Cash and cash equivalents (B-1).

b)

Repealed.

c)

Securities lending (B-3).

d)

Repurchase agreements (B-4).

e)

Loans (B-5).

f)

Real estate (B-6).

g)

Debtors (B-7).

h)

Accounts receivable (B-8).

i)

Reinsurers and reinsurees (B-9).

j)

Permanent investments (B-10).

k)

Technical reserves (B-11).

l)

Off-balance sheet accounts (B-12).

m)

Premiums (B-13).

n)

Costs (B-14).

o)

Adjudicated assets (B-15).

p)

Derivative financial instruments and hedging operations (B-16).

q)

Effects of inflation (B-17).

r)

Claims (B-18).

s)

Salvages (B-19).

t)

Procedure for the prorating of income and expenses (B-20).

u)

Analogous and related operations (B-21).

v)

Of the accounting registration of premiums of short-term endowment insurance plans and of

flexible insurance plans (B-22).

w)

Leases (B-23).

x)

Co-insurance operations (B-24).

y)

Surety Insurance (B-25).

Series III

Criteria relative to the basic consolidated financial statements.

a)

Minimum catalog (C-1)

b)

Balance sheet (C-2);

c)

Statement of results (C-3);

d)

Statement of cash flows (C-4);

e)

Statement of changes in equity and capital (C-5);

f)

Financial Statements of Holding Companies of Financial Groups (C-6).

Glossary of terms

(1) Creditors for Cancelled Policies, will refer to the liability derived from premiums to be refunded to

the insured at their request due to the partial or total cancellation of policies, as well as to the sureties for the

return or cancellation of issued sureties, when so agreed.

(2) Significant Business Activity, that operation or line of business that was authorized to operate in

accordance with Title 2 of these Provisions.

(3) Adjudicated Assets, movable, immovable or other rights derived from financial assets

that as a consequence of overdue debts, or a debt, right or item uncollectible, the

Institution:

Acquires through judicial adjudication, or

Receives through dation in payment.

(4) Overdue Portfolio, in accordance with Provision 8.14.69. Fraction I, is the one composed of

credits whose borrowers are declared in commercial bankruptcy, or whose principal, interest or both,

have not been settled in the terms originally agreed, considering for this purpose what is established in the

section titled "Transfer to Overdue Portfolio" of this criterion.

(5) Current Portfolio, integrated by credits that are up to date in their payments of both principal and

interest, as well as those with principal or interest payments overdue that have not met the

assumptions provided for in this criterion to consider them as overdue, and those that having been

restructured or renewed, have evidence of sustained payment as established in this

criterion.

(6) Write-off, is the cancellation of the credit when there is evidence that the formal

collection efforts have been exhausted or the practical impossibility of recovering the Credit has been determined.

(7) Co-insurance, in accordance with fraction V of article 2 of the Law of Insurance and Surety Institutions, it will

be understood as Co-insurance the participation of two or more Insurance Institutions in the same risk, in

virtue of direct contracts made by each of them with the same insured.

(8) Leading Co-insurer, will be that insurance institution that is in charge of processing the delivery

of the insurance policy(ies) to the insured, manage the entire collection, pay the agent

its commission, attend to claims and, if applicable, make the corresponding payment and market the

salvages, on behalf of itself and the Non-Leading Co-insurer, who in turn will have the obligation to cover the

expenditures that for the concept of Co-insurance administration have been agreed in the respective contract.

(9) Non-Leading Co-insurer, will be that insurance institution that will have the obligation to cover the

expenditures made by the Leading Co-insurer for the administration of the business and respond for its

participation in the obligations it has assumed, in exchange for the premiums it receives for said business.

(10) Contingencies in Litigation in Public Works Contracts, those claims received from

sureties whose guaranteed obligation emanates from contracts governed, at the federal level, by the Law of Public

Works and Related Services or by the Law of Acquisitions, Leases and Services

of the Public Sector; or, in the case of sureties granted in relation to contracts of that type governed by

local laws, of which some means of defense filed by the surety against the administrative rescission decreed in accordance with those laws for the breach of the surety is pending resolution, unless the suspension obtained by said surety against the execution of the

rescission is taking effect; or unless the surety policy has expressly agreed that its enforceability will be

subject to the fact that in the means of defense promoted by the surety a final decision is issued on the

principal obligation and, in addition, the law allows this agreement.

(11) Amortized Cost, the acquisition cost of a financial asset or liability at initial recognition minus the amortization of principal based on the Outstanding Balance, plus or minus the accumulated amortization using the Effective Interest Method of any difference between said initial amount and the amount at

maturity, and minus any impairment or uncollectibility reduction, directly or through the use of

an estimate.

(12) Transaction Costs, those incremental costs that are directly related to the

acquisition of a security, that is, that would not have been incurred had the security not been acquired. Transaction Costs do not include the discount or premium received or paid for Debt Securities, financing costs or internal administrative costs.

(13) Credit, asset resulting from the financing granted by entities based on what is established in

the applicable legal provisions.

(14) Restricted Credits, those Credits are considered as such with respect to which there are

circumstances under which they cannot be disposed of or used, and must be presented as

restricted; for example, the Credit portfolio that the originating entity grants as guarantee or collateral in securitization operations.

(15) Debtors for Analogous and Related Services, represent an asset for Institutions and

Mutual Societies for the services of the operations of: fund administration, medical services administration, payment administration to service providers, as well as the provision of

health services and the management of discount or membership cards, for analogous and related operations, which must be reflected in results as income from the administration of related services, which correspond to the administration of losses, administration and collection of sureties, for legal assistance,

automotive services and for the administration of trusts; and income from related services, which

correspond to the management of discount cards, services provided to third parties with own resources,

research services, among others.

(16) Co-insurance Account Statement, document through which the Leading Co-insurer reports

monthly to the other co-insurer the operations carried out on behalf of the latter in the percentage

agreed in the Co-insurance contract celebrated between both parties, on premiums, commissions, claims, adjustment expenses, salvages, income, expenses for administration and all operations covered by the

insurance contract in which co-insurance is operated, as well as the identification of the participation of the

Non-Leading Co-insurer for the concept of Co-insurance, information that must have the corresponding support.

(17) Estimate for Write-offs of Premiums Receivable, refers to the amounts of write-offs

effectuated on balances coming from mandatory liability insurance premiums, surety and surety policies that cannot be cancelled due to non-payment and whose term has ended and have not been

collected, and are presented in the Balance Sheet as a deduction of debtors for premiums or premiums

receivable for sureties issued.

(18) Estimate for Write-offs of Collected Premiums Not Reported, is represented by

write-offs of insurance or surety premiums collected by authorized agents or intermediaries that have not

been remitted by them to the Institutions, an estimate that can only be decreased against the collection of

the premiums, or in the case of not having been collected within one year after its registration, the estimate

constituted can be cancelled against the corresponding asset.

(19) Preventive Estimate for Credit Risks, an effect made against the results of the

fiscal year that measures that portion of the Credit that is estimated to have no collectability viability.

(20) Cash Flows, are inflows and outflows of cash and cash equivalents. Movements between the items that constitute cash and cash equivalents will not be considered

Cash Flows, since those components are part of the administration of cash and cash equivalents of the

entity, rather than its operating, investing or financing activities.

(21) Urban Real Estate from Regular Products, those real estate that generate a product

derived from their lease to third parties and those that, even if they are used for the own use of the

Institutions and Mutual Societies, consider an imputed rent calculated based on an appraisal of fair rental value that for this purpose is carried out by a Credit institution or public broker, which must be updated annually.

(22) Effective Interest Method, that by which the Amortized Cost of a financial asset is calculated and the recognition of financial income over the relevant period. This is done through the

application of the effective interest rate, that is, the discount rate that exactly equates the future

cash flows to be collected estimated over the expected life of the financial asset, or when appropriate, in a shorter period (for example, when there is the possibility of an early payment or redemption), with the net book value of said financial asset.

(23) Business model, refers to how an Institution manages or handles its risks based on its

investment policy to generate cash flows whose objective is to cover the Technical Reserves, Admissible Equity and Other Liabilities corresponding to Insurance and Mutual Institutions.

(24) Premiums on Deposit, will be represented by all those cash inflows for the concept of

payment of insurance and surety premiums that are received in advance or are pending

application, as well as all those deposits registered in the bank accounts of the Institutions whose

origin has not been identified, considering that the main source of income of the Institutions

corresponds to the collection of premiums.

(25) Restructuring, is that operation that derives from any of the following situations:

Expansion of guarantees that cover the Credit in question, or

Modifications to the original conditions of the Credit or to the payment scheme, among which

are:

i. Change of the interest rate established for the remaining term of the Credit;

ii. Change of currency or unit of account;

iii. Granting of a grace period regarding the fulfillment of payment obligations

in accordance with the original terms of the Credit, unless such concession is granted at the

maturity of the Credit, in which case it will be a renewal.

(26) Renewal, is that operation in which the term of the Credit is extended during or at the maturity

of the same, or it is settled at any time with the product coming from another Credit

contracted with the same entity, in which the same debtor or another person who by their patrimonial links constitute common risks. In these terms, a Credit is not considered renewed when

the disbursements are made during the term of a pre-established Credit line.

(27) Outstanding Balance, Is the part of a debt that has not been covered or has not yet been amortized or the

result obtained by the application of the Amortized Cost.

(28) Debt Securities, those financial instruments that in addition to being on the one hand a

receivable account and on the other a payable account, have a fixed term and generate for the holder

of the titles, Cash Flows over the term of the same.

(29) Book Value, the balance of an investment in a security, including the effects by the result

by valuation, interest, accrued dividends not collected, impairment loss or any other

effect that corresponds to it, as the case may be.

(30) Market Value or Price, is the amount that can be obtained from the sale or the amount that must

be paid for the acquisition of a financial instrument in an organized or recognized securities market.

For the purposes of this criterion, the Market Value or Price of a security quoted in the Mexican market

will be that provided by price providers. In the case of securities quoted on international exchanges, the Market Value or Price will be that made known by said organizations

(price providers) through official publications.

(31) Fair Value, the exit price that, at the valuation date, would be received by selling an asset or

paid to transfer a liability in an orderly transaction between market participants.

(32) Adjudication Value, that which is fixed for the purposes of the adjudication of assets as

a consequence of lawsuits related to claims of rights in favor of Institutions. In the case of

dations in payment, it will be the price agreed between the parties. In the case of goods promised for sale or with reservation of ownership, it will be the adjudication value decreased by the collections received on account.

(33) Nominal Value,

the amount in monetary units expressed in bills, coins, titles and

instruments.

(34) Probable Useful Life of the Real Estate, the remaining useful time that the corresponding appraisal will mark, from its date of preparation.

Series I. Criteria relative to the general scheme of accounting.

a)

Basic scheme of the set of accounting criteria (A-1)

(1) The purpose of this criterion is to define the basic scheme of the set of accounting guidelines applicable to Institutions and Mutual Societies.

(2) The accounting of Institutions and Mutual Societies will be adjusted to the basic structure that, for the application of the Financial Reporting Standards (NIF), was defined by the Mexican Council of Financial Reporting Standards, A.C. (CINIF), in the NIF A Series "Conceptual Framework".

(3) Institutions and Mutual Societies will observe the accounting guidelines of the NIF, except when, in the judgment of the Commission, it is necessary to apply specific regulations or accounting criteria, taking into consideration that Institutions and Mutual Societies carry out specialized operations.

(4) In accordance with what is established in Title 25 "Of the Holding Companies of Financial Groups subject to Inspection and Surveillance by the Commission" of these Provisions, the accounting criteria indicated in this Annex for Institutions and Mutual Societies will be applicable, insofar as relevant, to Holding Companies.

(5) Regarding this, the regulations referred to in paragraph 3 will cover valuation, presentation, and disclosure standards applicable to specific items within the financial statements of Institutions and Mutual Societies, as well as those applicable to their preparation.

(6) Additionally, in cases where Institutions and Mutual Societies consider that there is no accounting criterion applicable to any of the operations they carry out, issued by CINIF or by the Commission, the bases for supplementary application provided for in NIF A-8 will be applied, considering:

i.

That in no case, its application shall contravene the accounting criteria applicable to Institutions and Mutual Societies indicated in this Annex;

ii.

That the standards that have been applied in the supplementary process will be replaced when a specific accounting criterion is issued by the Commission, or a NIF, on the subject to which said process was applied.

(7) The application of accounting criteria, nor the concept of supplementary application, will not proceed in the case of operations that by express legislation are not permitted or are prohibited, or that are not expressly authorized to Institutions and Mutual Societies.

(8) Institutions and Mutual Societies that follow the supplementary process must communicate in writing to the Vice Presidency of Institutional Operation of the Commission, responsible for their supervision, within the 10 natural days following the application, the accounting standard that has been adopted supplementarily, as well as its basis of application and the source used. Additionally, they must carry out the corresponding disclosure in accordance with what is indicated in Chapter 23.1. "Of the opinions and reports of independent external auditors" of these Provisions.

b)

Application of Financial Reporting Standards (A-2)

(1) The objective of this criterion is to specify the application of the NIF, as well as to indicate the clarifications that result necessary for each one.

(2) In accordance with what is established in criterion A-1 of this Annex, Institutions and Mutual Societies will observe, until there is an express pronouncement by the Commission, the NIF issued by CINIF on topics not foreseen in the accounting criteria, provided that:

i.

They are in force with definitive character;

ii.

They are not applied in advance;

iii.

They do not contravene the accounting criteria for Institutions and Mutual Societies, and

iv.

There is no express pronouncement by the Commission, among others, regarding clarifications to the particular standards contained in the NIF that is issued, or regarding its non-applicability.

Specific Criteria for the Application of NIF

(3) Taking into consideration that Institutions and Mutual Societies carry out specialized operations, it is necessary to establish clarifications that adapt the particular standards of recognition, valuation, presentation, and in their case, disclosure, established by CINIF. In virtue of this, Institutions and Mutual Societies, when observing what is established in the NIF mentioned at the beginning of this criterion, must adjust to the following:

NIF B-1 "Accounting Changes and Corrections of Errors".- When, as a result of the supervision activities carried out by the Commission and in accordance with the functions carried out by external auditors and the commissioner, as well as the activities carried out by board members, general managers, directors and managers, internal auditors and other officials in charge of directing and controlling the operations of Institutions and Mutual Societies, errors are detected in the accounting recording of their operations, accounting changes or any other situation that by its importance originates the modification of the financial statements, Institutions and Mutual Societies must carry out their correction and substitution, and include in the disclosure notes the causes that gave rise to said modification. Likewise, they must present again to the Commission the quarterly or annual information that they have incorrectly reported in accordance with what is indicated in Title 22 of these Provisions.

NIF B-15 "Conversion of Foreign Currencies".- With respect to the valuation of operations in foreign currency and in compliance with article 296 of the LISF, the valuation of assets, liabilities and off-balance sheet accounts in foreign currency must be carried out using the following bases:

i.

What is established in NIF B-15 "Conversion of Foreign Currencies" will be applied.

ii.

In the application of the aforementioned NIF B-15, the exchange rate to be used to establish the equivalence of the national currency with the United States dollar will be the closing daily exchange rate on the date of the transaction or of the preparation of the financial statements, as applicable, published by the Bank of Mexico on its internet page www.banxico.org.mx, or the one that replaces it.

iii.

A position will be established for each currency handled.

iv.

The equivalence of the currencies of various countries with the United States dollar will be applied to the determined position. To carry out said conversion, they will consider the quotation that governs the corresponding currency in relation to said dollar in international markets, as established by the Bank of Mexico in the applicable regulation.

v.

Once the original currencies are converted to United States dollars, these will be valued at the closing daily exchange rate indicated in fraction ii.

vi.

The difference resulting from the valuation of the currencies of the asset and liability accounts will be recorded in the results of the period, considering for such purposes the sub-item Changes, belonging to the item Exchange Rate Result indicated in the minimum catalog referred to in Criterion C-1 of this Annex.

NIF B-17 "Determination of Fair Value".- Institutions and Mutual Societies must apply NIF B-17 except for the criteria defined in the IASB.

NIF C-2 "Investment in Financial Instruments".- Institutions and Mutual Societies must observe the criteria indicated in NIF C-2 "Investment in Financial Instruments", of the Financial Reporting Standards issued by CINIF, regarding the application of the standards relative to the recording, valuation and presentation in the financial statements, for the holding and returns that Institutions and Mutual Societies obtain, as a consequence of their investments in financial instruments.

In attention to Provision 3.9.2. Fraction II, and for the purposes of NIF C-2, Institutions and Mutual Societies must determine the business model they will use for the administration of their investments in financial instruments, to classify them adequately.

As a result of the analysis that Institutions and Mutual Societies make of their business model, assets by financial instruments must be classified for their valuation and recording within any of the following categories:

i.

Negotiable Financial Instruments (NFI),

ii.

Financial Instruments to Collect or Sell (FICS), or

iii.

Financial Instruments to Collect Principal and Interest (FICPI).

In the case of operations that comprise two or more accounting periods of recording, the amount to be reflected as a result by valuation will be the difference resulting between the last book value and the new value determined based on market prices (or equivalents) at the time of valuation. The valuation results that are recognized before the investment is redeemed or sold will have the character of unrealized and, consequently, will not be subject to capitalization or distribution of dividends among their shareholders, until they are realized in cash.

The category of Financial Instruments to Collect Principal and Interest will be for the exclusive use of Insurance Institutions that operate Pension Insurance derived from social security laws, considering the nature of their obligations.

The exception to irrevocably designate at initial recognition a financial instrument to collect or sell, to be subsequently valued at its fair value with effects in the net result referred to in paragraph 32.6 of NIF C-2, will not be applicable to Institutions and Mutual Societies.

Institutions and Mutual Societies that carry out reclassifications of their investments in financial instruments under section 44 of NIF C-2, must request authorization for this fact in writing from the Commission within the 10 business days following the authorization that for such purposes is issued by the board of directors of the Institutions and Mutual Societies, exposing in detail the change in the business model that justifies it.

Insurance Institutions specialized in Pension Insurance derived from social security laws may carry out the anticipatory sale of instruments classified in the category of Financial Instruments to Collect Principal and Interest, when with the purpose of preserving the levels of matching of their investments it is necessary to acquire instruments of greater duration. In any other case, prior authorization from the Commission will be required.

In all cases of anticipatory sales, the approval of the investment committee of the Insurance Institution specialized in Pension Insurance derived from social security laws, as applicable, must be obtained, as well as demonstrating that the coverage of the Investment Base and the level of sufficiency of the Admissible Own Funds to cover the RCS do not present shortages derived from such operations.

Likewise, they must present before the Commission within ten natural days following the close of the month in which the operation was carried out, the documentation detailed below:

i.

Letter in which they indicate the reasons for said anticipatory sales;

ii.

Copy of the accounting policies of the movements carried out, and

iii.

Minutes or agreement of the investment committee where the approval of the anticipatory sales carried out is recorded.

Regarding operations carried out by Institutions and Mutual Societies in matters of investments in securities, repurchases, securities lending and derivatives, once these reach their maturity and while the corresponding settlement is not perceived, as agreed in the respective contract, the amount of the operations due to be received or paid must be recorded in liquidating accounts (debtors or creditors for settlement of operations).

The acquired securities that are agreed to be settled on a date subsequent to the negotiation of the purchase-sale operation and that have been assigned, that is, that have been identified, will be recognized as restricted assets (to be received) at the time of negotiation, while the sold titles will be recognized as an exit of investments in securities (to be delivered). The counterpart must be a liquidating account, to be received or paid (creditor or debtor), as applicable, in accordance with what is established in criterion A-3 "Application of general standards", of this Annex.

Institutions and Mutual Societies, for the identification and recognition of impairment adjustments, must adhere to what is established by NIF C-2 "Investment in Financial Instruments", issued by CINIF.

NIF C-8 "Intangible Assets".- Institutions and Mutual Societies for the recording of intangible assets must have prior authorization from the Commission, in order to verify that they comply with what is indicated in NIF C-8. In the case of operations that generate a Goodwill, it will not be necessary to have said authorization.

NIF C-9 "Provisions, Contingencies and Commitments".- Institutions and Mutual Societies must observe the criteria indicated in NIF C-9 "Provisions, Contingencies and Commitments", except when it comes to the following aspects:

i.

Technical Reserves; for which they must adhere to what is provided in Title 5 of these Provisions, as well as what is established in Title 22 and this Annex.

ii.

Reinsurance operations, for which they must adhere to what is provided in Title 9 "Of Reinsurance, Reaffirmation and other mechanisms of transfer of risks and liabilities" of these Provisions.

iii.

Claims, for which they must adhere to what is indicated in criterion r) "Claims" of this Annex.

NIF C-11 "Equity".- In the case of real estate that Institutions and Mutual Societies register, they must include the surplus by reevaluation of real estate in accordance with what is indicated in criterion B-6 "Real Estate" of this Annex.

NIF C-13 "Related Parties".- For the purposes of complying with the disclosure standards contained in NIF C-13 "Related Parties", Institutions and Mutual Societies that carry out operations with related parties must consider, in addition to those provided for in article 71 of the LISF as well as in NIF C-13, the legal entities that have control or significant influence, understood as the de facto capacity to influence decisively in the agreements adopted in the shareholders' meetings or board of directors sessions or in the management, conduct and execution of the business of the entity in question or of the legal entities that it controls.

In addition to the information disclosures defined in NIF C-13 "Related Parties" and to provisions 23.1.14., fraction VI, subsection z) and 25.1.9., fraction XX of the IFRS, Institutions and Mutual Societies must disclose in aggregate form, through notes to the financial statements, for the operations between related parties that are carried out in their case, the following information:

i.

Generic description of the transactions or operations carried out, such as:

a)

credits granted

b)

operations with financial instruments in which the issuer and the holder are related parties,

c)

repurchases,

d)

securities lending,

e)

derivative financial instruments,

f)

hedging operations,

g)

assignment of credit portfolio, and

h)

those carried out through any person, trust, entity or other legal figure, when the counterparty and source of payment of said operations depends on a related party;

ii.

the total amount of benefits to employees granted to key managerial personnel or relevant executive staff of the entity.

Only the disclosure of operations with related parties that represent more than 1% of the regulatory capital of the month prior to the date of preparation of the corresponding financial information is required. Regulatory capital is understood as the amount of resources that are susceptible to be counted for the capital requirement that the CNSF demands annually, the procedure for its calculation is made known by the CNSF.

NIF C-15 "Impairment of Long-Lived Assets".- In the case of real estate that Institutions and Mutual Societies register, NIF C-15 will not be applicable, since they must adhere to what is indicated in article 296 of the LISF in relation to the valuation and accounting recording indicated in criterion B-6 "Real Estate" of this Annex and to chapter 8.5 and provision 8.2.3 fraction XXIII of this Circular.

For the case of Institutions and Mutual Societies, Significant Business Activity will be understood as that operation or line of business that was authorized to operate in accordance with Articles 25 and 36 of the LISF, for the application of this NIF.

NIF C-16 "Impairment of Financial Instruments to Collect".- For the purposes of determining the amount of the expected credit loss referred to in paragraph 45.1.1 of NIF C-16, the effective interest rate used to determine the present value of the cash flows to be recovered must be adjusted when opting to modify said rate in accordance with what is established in numeral 12 (NIF C-20), second paragraph of this criterion.

Expected credit losses for the impairment of investments in financial instruments as indicated in section 45 of NIF C-2 must be determined in accordance with what is established in NIF C-16.

NIF C-19 "Financial Instruments to Pay".- Institutions and Mutual Societies must observe the criteria indicated in NIF C-19 "Financial Instruments to Pay", except when it comes to non-convertible subordinated obligations and other credit instruments issued by the entity, which must be recorded as a liability, likewise the amount to be paid for the obligations and other Credit instruments issued will be recorded according to the Nominal Value of the titles.

It will record the amount of accrued interest to be paid derived from the debt instruments issued by the institution in the sub-item of Creditors for Interest of the Subordinated Obligations of Mandatory Conversion to Capital, belonging to the item Various Creditors, indicated in the minimum catalog referred to in Criterion C-1 of this Annex, corresponding to the issuance of debt instruments.

In the case of issuance and placement expenses of obligations not susceptible to be converted into shares and of other Credit titles, they must be deducted from the amount of the liability and must be considered to determine the effective interest rate. In the case of redemption of the obligations and other Credit titles before their maturity, it will be necessary to adjust the interest rate, in order to bring to the results the proportional part that corresponds to the obligations redeemed in advance.

In addition to the disclosures required in NIF C-19 itself, Institutions and Mutual Societies must include in the disclosure notes to the financial statements of the close of the period in question, the characteristics of the subordinated obligations and other credit instruments issued authorized by the Commission and provided for in Title 10 of the IFRS: amount; number of titles in circulation; nominal value; discount or premium; rights and form of redemption; guarantees; maturity; interest rate; effective interest rate; amortized amount of the discount or premium in results; amount of issuance expenses and other related expenses and proportion that the authorized amount bears to the issued amount.

For the initial recognition of any other financial instrument to pay, what is established in paragraph 41.1.1 numeral 4 of NIF C-19, regarding using the market rate as the effective interest rate in the valuation of the financial instrument to pay when both rates are substantially different, will not be applicable.

The exception to irrevocably designate at initial recognition a financial instrument to pay to be subsequently valued at its fair value with effect in the net result referred to in section 42.2 of NIF C-19, will not be applicable to Institutions and Mutual Societies.

NIF C-20 "Financial Instruments to Collect Principal and Interest".- For the purposes of NIF C-20, assets originated by the operations referred to in criterion B-5 "Loans", of this Annex, must not be included, since the standards of recognition, valuation, presentation and disclosure for the initial and subsequent recognition of such assets are contemplated in said criterion.

For the purposes of the initial recognition of a financial instrument to collect principal and interest, what is established in paragraph 41.1.1 numeral 4, regarding using the market rate as effective interest rate in the valuation of the financial instrument to collect principal and interest when both rates are substantially different, will not be applicable.

For the purposes of the recognition of effective interest, the effective interest rate of the collection rights may be adjusted periodically in order to recognize variations in the estimated cash flows to be received.

The exception to irrevocably designate at initial recognition a financial instrument to collect principal and interest, to be subsequently valued at its fair value with effect in the net result referred to in paragraph 41.3.4 of NIF C-20, will not be applicable to Institutions and Mutual Societies.

c)

Application of general standards (A-3)

(1) The objective of this section is to specify the establishment of general application standards that Institutions and Mutual Societies must observe in the recognition, valuation, presentation and disclosure applicable for the accounting criteria regarding the following concepts:

Restricted assets.- Restricted assets must be recorded for all those assets regarding which there are circumstances by which they cannot be disposed of or used, and must remain in the same item from which they originate. Likewise, it will be considered that they are part of this category, those assets coming from operations that do not settle on the same day, that is, they are received with a value date different from the negotiation date.

Liquidating accounts.- The amount of the operations due to be received or paid derived from the operations carried out by Institutions and Mutual Societies must be recorded in liquidating accounts.

entities regarding investments in securities, repos, securities lending, and derivatives,

once these reach their maturity and until the corresponding settlement is received,

as agreed in the respective contract.

Likewise, for operations where immediate settlement or same-day value date is not agreed upon,

including foreign exchange sales and purchases, on the transaction date the amount to be received or paid must be

registered in clearing accounts, until their settlement is effected. In cases where the amount to be received is not realized within 30

calendar days following the date it was registered in clearing

accounts, it will be reclassified as Past Due Portfolio and the corresponding

estimate of expected credit losses for the aforementioned amounts to be received must be established simultaneously. This must be determined in accordance with what is established in NIF C-16

"Deterioration of financial instruments receivable".

Accrued but unrealized interest.- Accrued interest for the different items

of assets or liabilities must be presented in the Balance Sheet together with their corresponding principal.

Recognition of assets and/or liabilities.- The recognition in the financial statements of

assets and/or liabilities, including those arising from foreign exchange sales and purchases,

investments in securities, repos, securities lending, derivatives, and issued securities,

will be carried out on the date the operation is agreed upon, regardless of the settlement or delivery date of the asset.

Cancellation of assets and/or liabilities.- The cancellation in the financial statements of

assets and/or liabilities, including those arising from foreign exchange sales and purchases,

investments in securities, repos, securities lending, derivatives, and issued securities,

will be carried out on the date the operation is agreed upon, regardless of the settlement or delivery date of the asset.

Valuation of UDI.- The value to be used will be that made known by the Bank of Mexico

on its website, applicable on the valuation date.

Valuation of VSM (times minimum wage).- The value to be used will be that of the minimum wage

corresponding, approved by the National Commission of Minimum Wages and made known

in the DOF, applicable on the valuation date.

Valuation of UMA.- The value to be used will be that of the measurement and update unit

corresponding, approved by the National Institute of Statistics and Geography and made known

in the DOF, applicable on the valuation date.

Disclosure of financial information.- Regarding the disclosure of financial

information, the provisions of NIF A-7 "Presentation and disclosure" must be taken into account, with respect to the fact that the responsibility for providing information on the economic entity

rests with its management, which must gather such information, meeting certain qualitative characteristics such as reliability, relevance, understandability, and

comparability based on what is provided in the structure of financial reporting standards.

Institutions and Mutual Societies, in compliance with the disclosure standards

provided in these accounting criteria, must consider materiality in terms of NIF A-4 "Qualitative characteristics of financial statements",

that is, they must show the most significant aspects of the entity recognized

accountingly as indicated by that characteristic associated with relevance.

The foregoing implies, among other elements, that materiality requires the exercise

of professional judgment regarding the circumstances that determine the facts reflected in the

financial information. In the same sense, an appropriate balance must be obtained between the

qualitative characteristics of financial information in order to meet the objective of the

financial statements, for which an optimal point must be sought rather than the achievement of

maximum levels of all qualitative characteristics.

However, with respect to materiality, this will not be applicable to the

information:

i.

required by the Commission through other general provisions issued for

this purpose, different from those contained in these criteria;

ii.

additional specific information required by the Commission, related to its

supervisory activities, and

iii.

required through the issuance or authorization, if applicable, of special accounting

criteria or records.

Series II. Criteria relating to specific concepts of insurance and surety operations.

a)

Cash and cash equivalents (B-1)

Objective

(1) This section defines the particular criteria for applying the standards relative to the

recording, valuation, and presentation in the financial statements of the items that make up the item

of cash and cash equivalents in the Balance Sheet of Institutions and Mutual Societies.

(2) Deposits in financial entities represented or invested in securities will be subject to what is

stated in NIF C-2 "Investment in financial instruments".

Valuation standards

(3) Cash must be valued at its nominal value, while cash equivalents

must be valued at their fair value.

(4) The valuation of cash equivalents represented by minted precious metals

will be carried out at their fair value, considering as such the applicable quotation

on the valuation date. In the case of minted precious metals that by their nature do

not have an observable market value, these will be recorded at their acquisition cost,

understood as this, the amount of cash or its equivalent delivered in exchange for them,

considering the applicable quotation on the valuation date.

(5) In the case of foreign currencies, they must adhere to what is stated in "Clarifications to the

particular standards contained in the NIF", paragraph 2, of this Annex.

(6) Foreign currencies acquired that are agreed to be settled on a date subsequent to the

agreement of the sales and purchase operation, will be recognized on that transaction date as a

restricted availability (foreign currencies to be received), while, the sold currencies will be recorded as a

disbursement of availability (foreign currencies to be delivered). The counterparty must be a

clearing account receivable or payable (creditor or debtor), as appropriate.

Presentation standards

(7) Checks, both domestic and foreign, that have not been effectively collected

after two business days from having been deposited, and those that having been deposited have been

subject to return, must be carried against the item that gave rise to them; in the case of not being able to identify it, their registration must be recognized in the item of other debtors. Once forty-five days have passed after registration in other debtors and if said checks have not been

recovered or collected, these must be written off directly against results.

(8) The amount of checks issued prior to the date of the financial statements that

are pending delivery to beneficiaries must be reincorporated into the item of cash

recognizing the corresponding liability.

(9) When there are no offsetting agreements with the corresponding financial institution,

overdrafts must be shown in the item of other creditors, even if other

checking accounts with a debit balance are maintained in the same institution.

b)

Repealed

c)

Securities lending (B-3)

Objective

(1) This section aims to define the particular standards relative to the recognition,

valuation, presentation, and disclosure in the financial statements, of the securities lending

operations carried out by Institutions and Mutual Societies acting on their own account.

Recognition and valuation standards

(2) On the date of contracting the securities lending operation, with the Institution or

Mutual Society acting as lender, with respect to the value of the object of the loan

transferred to the borrower, the Institution or Mutual Society must recognize it as restricted in accordance with what is established in criterion A-3 "Application of general standards", for which it must follow the valuation, presentation, and disclosure standards that correspond, that is,

with the original valuation of the security.

(3) The amount of accrued premium will be recognized in the results of the period, through the

Effective Interest Method, affecting the interest debtor corresponding during the term

of the operation.

(4) With respect to financial assets received as collateral, these will be recognized in

off-balance sheet accounts, following for their valuation what is established in criterion A-2 "Application of

particular standards" of Series I of this Annex.

(5) In the case where the borrower fails to comply with the conditions established in the contract,

the Institutions and Mutual Societies must recognize the entry of the collateral, according to the type of asset involved, as well as derecognize the value of the object of the operation that had previously been restricted.

Presentation standards

(6) The off-balance sheet accounts recognized for financial assets received as collateral must

be cancelled when the securities lending operation reaches its maturity or there is

default by the borrower.

d)

Repos (B-4)

Objective

(1) This section aims to define the particular standards relative to the

recognition, valuation, presentation, and disclosure in the financial statements, of the

repo operations.

Recognition and valuation standards

(2) On the date of contracting the repo operation, with the Institution or Mutual

Society acting as the Repo Seller, it must recognize the disbursement of availability or a

creditor clearing account, registering the repo debtor initially measured at the agreed price, which

represents the right to recover the cash delivered.

(3) During the life of the Repo, the repo debtor referred to in the previous paragraph, will be

valued at its Amortized Cost, through the recognition of the Premium in the results of the

period as it accrues, in accordance with the Effective Interest Method, affecting the

corresponding repo debtor during the term of the operation.

Presentation standards

(4) The financial assets that the Insurance Institution and Mutual Society has received

as collateral must be registered as an off-balance sheet account following for its valuation the

provisions established in this chapter.

(5) In the event that the Repo Buyer fails to comply with the conditions established in the contract, and

therefore cannot claim the collateral, the institution or society as Repo Seller must

recognize in its Balance Sheet the entry of the collateral, according to the type of asset involved, against the repo debtor mentioned above.

(6) Institutions and Mutual Societies must not recognize collateral in their

financial statements but only in off-balance sheet accounts, with the exception of what is established in the

previous paragraph, that is, when the risks, benefits, and control of the

collateral have been transferred due to the default of the Repo Buyer.

(7) The off-balance sheet accounts recognized for received collateral must be cancelled when the

Repo operation reaches its maturity or there is default by the Repo Buyer.

e)

Loans (B-5)

Objective and scope

(1) This section aims to define the particular standards relative to the

recognition, valuation, and presentation in the financial statements of the operations of

loans or Credits of Institutions and Mutual Societies according to Chapter 8.14

of this Circular.

(2) Includes accounting guidelines relative to the Preventive Estimate for Credit

Risks.

(3) The following are not subject to this criterion:

1. The establishment of the methodology for the rating and establishment of the

Preventive Estimate for Credit Risks, and

2. The accounting standards relative to securities issued in series or in bulk, which are quoted on

recognized markets and which the entity maintains in its own position, even if they are

linked to Credit operations, being subject to the criterion "Investments in

securities", according to what is provided in Title 22 of the General Provisions derived from the LISF.

Recognition and valuation standards

(4) The balance to be recorded in loans or Credits will be the amount effectively granted to the borrower

and, if applicable, the insurance that has been financed. To this amount will be added any type

of interest that, according to the Credit payment scheme, accrues.

(5) The Outstanding Balance of Credits denominated in Minimum Wage Units (VSM) will be

valued based on the corresponding minimum wage, recording the adjustment for the increase

against a Deferred Credit, which will be recognized in the results of the period in the portion

proportional to a 12-month period as interest income. In the event that before the end of the 12-month period there is a modification to said minimum wage,

the outstanding balance to be amortized will be carried to the results of the period in the item of interest income on that date.

(6) In cases where the collection of interest is made in advance, these will be recognized

as an advance collection in the item of Deferred Credits and advance collections, which will be amortized during the life of the Credit under the straight-line method against the results of the

period, in the item of interest on Credits.

Partial payments in kind

(7) Partial payments received in kind to cover amortizations (principal and/or interest) accrued, or in their case, due, will be recorded in accordance with what is established in the accounting criterion B-15 "Assets Adjudicated",

of this Annex.

Commissions charged for the initial granting of the Credit

(8) Commissions charged for the initial granting of the Credit will be recorded as a Deferred Credit, which will be amortized against the results of the period as interest income,

under the straight-line method during the life of the Credit.

(9) This category will not include commissions that are recognized subsequent to the

initial granting of the Credit, those incurred as part of the maintenance of said Credits, nor those charged in connection with Credits that have not been placed.

Likewise, any other type of commission not included in the previous paragraph will be

recognized on the date they are generated against the results of the period in the item of

commissions and fees charged.

Associated costs and expenses

(10) Costs and expenses associated with the initial granting of the Credit will be recognized as a

delayed charge, which will be amortized against the results of the period as an interest expense, during the same accounting period in which income from

commissions charged is recognized.

(11) For the purposes of the previous paragraph, costs or expenses associated with the

initial granting of the Credit will be understood only as those that are incremental and directly related to activities carried out by Institutions and Mutual Societies for

granting the Credit, for example, the credit evaluation of the debtor, evaluation and recognition of

collateral, negotiations for the terms of the Credit, preparation and processing of the

Credit documentation, and closing or cancellation of the transaction.

(12) Any other cost or expense not included in the previous paragraph, including those

related to promotion, advertising, potential customers, administration of existing Credits (follow-up, control, recoveries, etc.) and other auxiliary activities related to

the establishment and monitoring of Credit policies will be recognized directly in the results of the period as they accrue in the item corresponding to the

nature of the cost or expense.

(13) Commissions charged or pending collection, as well as costs and expenses associated

with the initial granting of the Credit, will not form part of the Credit portfolio.

Transfer to Past Due Portfolio

(14) The Outstanding Balance according to the conditions established in Credit contracts will be

registered as Past Due Portfolio when:

It is known that the borrower is declared in commercial bankruptcy, in accordance with

the Commercial Bankruptcy Law, or

Their amortizations have not been settled in full according to the terms originally agreed

upon, considering the following for this purpose:

i. If the debts consist of Credits with a single payment of principal and interest at

maturity and have 30 or more calendar days past due;

ii. If the debts refer to Credits with a single payment of principal at maturity and with

periodic interest payments and have 90 or more calendar days past due for the respective interest payment, or 30 or more calendar days past due for the principal;

iii. If the debts consist of Credits with periodic partial payments of principal and

interest, including Housing Credits and have 90 or more calendar days past due.

(15) Past Due Credits that are restructured will remain within the Past Due Portfolio, until

there is evidence of sustained payment.

(16) Credits greater than one year with a single payment of principal and interest at maturity that are restructured during the term of the Credit will be considered as Past Due Portfolio.

(17) Renewals in which the borrower has not settled in time the total of

accrued interest according to the terms and conditions originally agreed upon, and 25% of the original amount of the Credit, will be considered as past due until there is

evidence of sustained payment.

(18) When it comes to renewals where the extension of the term is carried out during the

term of the Credit, the 25% referred to in the previous paragraph must be calculated on the original amount of the Credit that should have been covered by that date.

Suspension of interest accumulation

(19) The accumulation of accrued interest on credit operations entered into with each debtor must be suspended, at the moment when the Outstanding Balance of the Credit is

considered as past due. Likewise, the amortization in the results of the

period of accrued financial income, as well as the amount corresponding to the purchase option of Credits through financial leasing operations, must be suspended, at the moment

when the Outstanding Balance of the Credit is considered as past due.

(20) For those Credits that contractually capitalize interest to the amount of the debt, the suspension of interest accumulation established in the previous paragraph will apply to them.

(21) While the Credit remains in Past Due Portfolio, the control of accrued interest or financial

income will be carried out in off-balance sheet accounts. In the event that such interest or

past due financial income is collected, it will be recognized directly in the results of the period in the item of interest income, canceling in the case of financial leasing the corresponding Deferred Credit.

(21) In the event that the interest recorded in off-balance sheet accounts in accordance with the previous paragraph

is forgiven or written off, it must be cancelled from off-balance sheet accounts without affecting the item of

the preventive estimate for credit risks.

Uncollected accrued interest

(23) With respect to accrued but uncollected interest or financial income

corresponding to Credits that are considered as Past Due Portfolio, an estimate must be created for an amount equivalent to the total of these, at the moment of transferring the Credit as

Past Due Portfolio.

(24) For past due Credits where in their Restructuring the capitalization of

accrued but uncollected interest previously recorded in off-balance sheet accounts is agreed upon, the entity must create an estimate for 100% of said interest. The estimate can be cancelled when there is evidence of sustained payment.

Preventive Estimate for Credit Risks

(25) The Preventive Estimate for Credit Risks will be determined

based on Chapter

8.14 of these Provisions. This estimate must be calculated and registered

monthly, affecting the item of preventive estimates for credit risks of the asset against the sub-item of Preventive Write-offs for credit risks that is part of the item of

Integral Financing Result, according to the minimum catalog of this Annex.

Write-offs, eliminations, and recoveries of Credit portfolio

(26) The Institution or Mutual Society must periodically evaluate whether a past due Credit

should remain in the Balance Sheet, or rather, be written off. Such Write-off will be carried out by

cancelling the Outstanding Balance of the Credit against the Preventive Estimate for Credit Risks.

When the Credit to be written off exceeds the balance of its associated estimate, before effecting the

Write-off, said estimate must be increased up to the amount of the difference.

(27) In addition to what is established in the previous paragraph, the Institution or Mutual Society

may opt to eliminate from its assets those past due Credits that are provisioned at

100% and when they do not meet the conditions to be written off. For such purposes, the

Institution or Mutual Society must cancel the Outstanding Balance of the Credit against the

Preventive Estimate for Credit Risks.

(28) Any recovery derived from previously written-off or eliminated Credits must be

recognized in the results of the period.

Haircuts, forgiveness, bonuses, and discounts on the portfolio

(29) Haircuts, forgiveness, bonuses, and discounts, that is, the amount forgiven of the

payment of the Credit in part or in full, will be recorded against the Preventive Estimate for Credit Risks. In the event that the amount of these exceeds the balance of the estimate

associated with the Credit, estimates must previously be established up to the amount of the difference.

Credits denominated in foreign currency, in VSM, and in UDIS

(30) For the case of Credits denominated in foreign currency, in Minimum Wage Units, and

in UDIS, the estimate corresponding to said Credits will be denominated in the currency or unit of account of origin that corresponds, converted to national currency.

Cancellation of excesses in the Preventive Estimate for Credit Risks

(31) When the balance of the Preventive Estimate for Credit Risks has exceeded the

amount required according to the methodologies established for each type of Credit, the

differential must be cancelled on the date when the next rating of the type of

Credit to be charged against the results of the period, affecting the same concept or item that originated it, that is, the Preventive Estimate for Credit Risks. In cases where the amount to be cancelled exceeds the registered balance of said estimate in the results of the period, the excess shall be recognized as other income (expenses) of the operation.

Presentation Standards

(32) General Balance Sheet

Loans or Credits shall be grouped into current and overdue, according to the type of Credit, that is, Unrestricted Credits and Restricted Credits, whether they are Credits with mortgage guarantee for urban real estate or Credits with pledge guarantee of titles or securities, and in turn, classified according to the nature of the operation;

The Preventive Estimate for Credit Risks shall be presented in a separate item, subtracted from the Credit portfolio;

It shall be presented as part of the insured Credit portfolio, the financial asset that represents the financing granted to the assignor referred to in the portfolio subject to securitization;

The effect of revaluation of Credits in Minimum Wage Units as referred to in this criterion shall be presented as part of the Credit portfolio;

A sub-item of other assets shall be presented for the deferred charge for costs and expenses associated with the initial granting of the Credit;

A sub-item of deferred Credits shall be presented for the financial income to be accrued and the commissions charged for the initial granting of the Credit;

The amount of Credits from financial leasing operations, both current and overdue, shall be presented net of deferred Credits;

Interest charged in advance shall be presented together with the portfolio that gave rise to it;

The liability for guarantee deposits shall be presented in a sub-item of other accounts payable;

In a sub-item of other accounts payable, if relative importance warrants it, the credit balances of Credits shall be presented, for example when there is a balance in favor of the borrower for having made a payment greater than the amount due, and

It shall be presented in off-balance sheet accounts, in the item of accrued but uncollected interest derived from overdue Credit portfolio, the amount of accrued but uncollected interest derived from Credits that remain in Overdue Portfolio, as well as the financial income accrued derived from Credits in financial leasing operations.

Statement of Results

(33) Interest income shall be grouped as accrued interest, amortization of interest charged in advance, accrual of deferred Credit for revaluation of Credits in Minimum Wage Units, financial income accrued in financial leasing operations, amortization of commissions charged for the initial granting of the Credit, foreign exchange gain, and the result from revaluation of UDIS (credit balance). Likewise, interest expenses shall be grouped as amortization of costs and expenses associated with the initial granting of the Credit, as well as foreign exchange loss and the result from revaluation of UDIS (debit balance).

(34) It shall be presented as a specific item, immediately after the financial margin, the Preventive Estimate for Credit Risks and the foreign exchange gain or loss, as well as the result from revaluation of UDIS and Minimum Wage Units, which originate from the estimate denominated in foreign currency, UDIS, or in Minimum Wage Units, converted to national currency, respectively.

(35) Recoveries of previously written-off or eliminated operations shall be presented in the item of other income (expenses) of the operation.

(36) The amortization of the deferred Credit generated by the purchase option at a reduced price, the purchase option when adopted at maturity, as well as the income from the participation in the sale of goods in financial leasing to a third party, shall be presented in the item of other income (expenses) of the operation.

(37) For the case of loans granted to officials and employees, the interest derived from them shall be presented in the statement of results in the item of administrative and operating expenses (other expenses or income).

(38) Likewise, loans to retirees shall be considered as part of the credit portfolio, and must adhere to the guidelines established in this criterion, except when, just like active employees, the collection of said loan is carried out directly, in which case they shall be recorded in accordance with the guidelines applicable to loans to officials and employees mentioned above.

The expected credit losses corresponding to items directly related to the credit portfolio such as legal expenses, shall be determined by applying the same risk percentage assigned to the associated credit, in accordance with what is established in this criterion.

f) Real Estate (B-6)

Objective and Scope

(1) This section aims to define the particular criteria relative to the recognition, valuation, presentation, and disclosure in the financial statements of real estate investment operations carried out by Institutions and Mutual Societies.

Recognition and Valuation Standards

(2) The real estate investments carried out by Institutions and Mutual Societies must comply with the following:

The value of the real estate investments carried out by Institutions and Mutual Societies shall be estimated by the average of the physical and capitalization values of rents, according to appraisals conducted by experts from Credit Institutions or public brokers in accordance with applicable provisions;

Appraisals of the real estate properties of Institutions and Mutual Societies must be conducted annually. The aforementioned term shall be computed from the date of the last appraisal performed. In the case of an inflationary environment, Institutions and Mutual Societies must adhere to what is stated in Criterion B-17 of these Provisions.

At any time, when in the judgment of the Commission there is any element that casts doubt on the value of a real estate property, it may order the Institution or Mutual Society to obtain a new appraisal with a Credit Institution with which it does not maintain Patrimonial Links or Business Links.

Social interest housing and Urban Real Estate of Regular Products that Institutions and Mutual Societies acquire, build, or administer, must be located in the territory of the Republic and insured for their destructible value with the corresponding coverages.

Institutions that, based on the previous provisions, have capitalized part of the surplus from the revaluation of real estate, must insert at the foot of their consolidated Balance Sheet a note, in the following terms:

"The paid-in capital includes the amount of $_________, national currency, originating from the partial capitalization of the surplus from the revaluation of real estate".

Likewise, they must register the capitalization in the off-balance sheet accounts: "Surplus from Revaluation of Real Estate Capitalized" and its contra-account "Capitalization of Surplus from Revaluation of Real Estate".

They shall register the amount of the surplus whose capitalization is carried out based on the respective authorizations granted by the Commission, and

The depreciation of real estate shall be made on the value of the constructions, taking as a base both their historical cost and their corresponding valuation, based on the Probable Life of the Real Estate indicated in the appraisals.

Presentation Standards

(3) In view of the fact that the items indicated in the current minimum catalog, corresponding to Real Estate, must be integrated with their acquisition cost and their increase from revaluation, and consequently register their depreciation based on their historical value increased by their update, they must adjust to the following criteria:

The increase from the update of the Real Estate item of regular products shall be reflected within that same item;

The increase from the update of the Real Estate item acquired in financial leasing shall be reflected within that same item, and

The increase from the update of the items for depreciation of real estate of regular products, and real estate acquired in financial leasing shall be reflected within their corresponding item.

(4) Regarding the registration of real estate under construction reflected in the item "Real Estate Under Construction", they shall continue to register them at their acquisition value and until the works are completed and the corresponding appraisal is carried out, the Commission may accept the value corresponding to the constructions or repairs, transferring the amount to the item "Real Estate", subjecting the latter to the update process in accordance with the established guidelines.

g) Debtors (B-7)

Debtors for Premiums

(1) The premium or the corresponding fraction thereof that has not been paid within 30 natural days following the date of its maturity, or in its case, within the shorter term agreed upon in accordance with article 40 of the Law on the Insurance Contract, must be cancelled accounting-wise within a maximum period of 15 natural days following the end of the corresponding term.

(2) Likewise, within a period of 15 natural days, the cancellation of reinsurance operations ceded that the issuance of the corresponding policy has given rise to must be effected.

Debts owed by Departments and Entities of the Federal Public Administration

(3) Insurance Institutions shall register in the item of Debts Owed by Departments and Entities of the Federal Public Administration, indicated in the minimum catalog referred to in Criterion C-1 of this Annex, the balances that report an age greater than 45 natural days following the date of their maturity and that are backed by a national public bid in charge of the Departments and Entities of the Federal Public Administration or Federal Entities, which have celebrated, for the purposes of the bid, an agreement with the Federal Executive and that, in accordance with what is established in the Law of Acquisitions, Leases and Services of the Public Sector and the Federal Budget and Fiscal Responsibility Law, are supported in the Expenditure Budget of the Federation for the Fiscal Year that corresponds.

(4) Insurance Institutions must register separately the premium subsidy in accordance with the Agreement that the Ministry of Finance and Public Credit annually issues regarding the Operating Rules of the Programs for the Premium Subsidy of the Agricultural Insurance and Support for Agricultural Insurance Funds.

Estimation of Doubtful Collection and Cancellation of Premiums by Return of Surety Policies

(5) In the case of liability insurance that by legal provision has the character of mandatory, they cannot cease in their effects, be rescinded, nor be terminated prior to the date of termination of their validity, in attention to what is stated in article 150Bis of the Law on the Insurance Contract.

(6) In caution insurance, the total or partial non-payment of the premium shall not produce the cessation or suspension of its effects. Nor shall it be a cause for rescission of the contract, in consideration of what is stated in article 154 of the Law on the Insurance Contract.

(7) In surety policies, the total or partial non-payment of the premium shall not produce the cessation or suspension of its effects and only the return of the policy to the Institution that issued it will allow its cancellation in attention to what is provided in the last paragraph of article 166 of the LISF. Likewise, the registration of cancellation for expiration may be carried out in accordance with what is stated in article 174 of the LISF.

(8) Therefore, mandatory liability insurance, caution insurance, and surety policies cannot be cancelled for non-payment.

(9) In the cases of caution insurance indicated in paragraph 6, as well as premiums receivable for administrative sureties, when they present an age greater than 120 natural days from the start of validity, they must register an estimation of doubtful collection, and in the cases of liability insurance indicated in paragraph 5 and premiums receivable for sureties issued except administrative sureties, they shall register said estimation when the age is greater than 90 days.

Rights and Surcharges on Policies

(10) The rights on policy derived from the expenses of issuance of the policy, its modifications or reforms, which form part of the item of debtors for premium, shall be registered by operation and branch in the line of Rights or Policy Products that forms part of the operating cost at the moment when the premiums are registered, in order to recognize in the same period the income for said concept, independent of the date on which they are carried out.

(11) In the case of surcharges on premiums, which also forms part of the item of debtors for premium, they must be registered against the liability account, surcharges on premiums to be accrued and subsequently, their effect on results shall be carried out in accordance with the accrual determined monthly, in the item of surcharges on premiums that forms part of the comprehensive result of financing.

Debtors for Surety Liabilities

(12) Institutions that operate Sureties must register in their accounting all operations they carry out, regardless of their origin, among which stands out the registration of debtors for surety liabilities, which in accordance with the minimum catalog referred to in Criterion C-1 of this Annex, is considered as an asset.

Regarding this, considering that by the mere passage of time, the collection rights that Institutions operating Sureties maintain deteriorate in different proportions according to the recovery guarantee obtained at the time, this Chapter establishes the provisions to which Institutions operating Sureties must be subject for the registration of collection rights for the payment of sureties;

For the amount paid of claims made by Institutions operating Sureties with their own resources, and there are recovery guarantees that meet the requirements established for each of them in Title 11 of these Provisions, in relation to articles 167, 168, and 169 of the LISF, said amount must be registered in their asset, according to the percentages established in the table annexed to this criterion, removing the charge to results previously made, regardless of its accounting in off-balance sheet accounts.

If this collection right is recognized in a subsequent period to the one in which the payment was made, the registration shall be made in the credit balance item corresponding.

The collection right that is registered shall not be higher than the amount paid and cannot exceed the value of the recovery guarantee held at the time of making the payment of the respective claim;

Expenses incurred for the recovery of claimed and paid sureties, shall be registered directly to results, as well as the income obtained from them at the time;

In order to carry out the registration of the collection right for the payment of surety claims mentioned in numeral 2) of this criterion, the corresponding file shall include the proofs of the amounts paid, as well as the recovery guarantees available at that date, indicating their value;

The registration of the collection rights shall remain registered in the asset for a period of four years, counted from the date of payment, attending to the quality of the guarantee, temporality, and percentages indicated in the table annexed to this criterion. To this effect, the collection right must be cancelled once the aforementioned term has concluded and carried to the item of uncollectible accounts, as it is being cancelled.

The accounting in uncollectible accounts and the cancellation of the asset, may be carried out in advance when the Surety Institution has elements that attest to its registration;

In those sureties claimed and paid that have re-surety, whether taken or ceded with Institutions operating Sureties, Insurance Institutions, or Foreign Institutions, the corresponding part shall be registered in the specific items for these operations, in accordance with the minimum catalog referred to in Criterion C-1 of this Annex, applying in what is pertinent the Provisions of this Chapter. For this effect, the Assigning Institution must inform within a term that shall not exceed 20 business days, counted from the date of accounting, to those institutions to which it ceded in re-surety;

At the close of the period, Institutions operating Sureties must inform their board of directors of the amounts registered in results for the payment of sureties, as well as of the cancellation of collection rights.

Percentages for Recognition of Collection Rights (Debtors for Surety Liability)

TYPE OF GUARANTEE PERMANENCE IN THE ASSET 1st year 2nd year 3rd year 4th year

Pledge consisting of cash, or values issued or guaranteed by the Federal Government or issued by the Bank of Mexico. 100 0 0 0

Risk coverage for compliance granted by development banking institutions directly or through a trust. 100 50 25 0

Pledge consisting of qualified values issued by credit institutions or in values subject to investment in accordance with articles 131 and 156 of the LISF with a rating of "Good" or "Adequate". 80 40 20 0

Pledge consisting of qualified values issued by credit institutions or in values subject to investment in accordance with articles 131 and 156 of the LISF with a rating lower than "Adequate". 50 25 10 0

Pledge consisting of money deposits in credit institutions. 100 0 0 0

Pledge consisting of loans and credits in credit institutions. 100 0 0 0

Guarantee or contingent letter of credit from Credit Institutions. 100 0 0 0

"Stand By" Letter of Credit or Guarantee or Contingent Letter of Credit from Qualified Foreign Credit Institutions with rating "Good or Adequate". 100 0 0 0

"Stand By" Letter of Credit or Guarantee or Contingent Letter of Credit from Foreign Credit Institutions with a rating lower than "Adequate". 25 0 0 0

Notified "Stand By" Letter of Credit or Notified Guarantee or Contingent Letter of Credit from Foreign Credit Institutions with a rating of "Superior" or "Excellent". 70 0 0 0

Notified "Stand By" Letter of Credit or Notified Guarantee or Contingent Letter of Credit from Foreign Credit Institutions with a rating of "Good" or "Adequate". 50 0 0 0

Counter-surety from Institutions, from Foreign Institutions that are registered in the RGRE with a rating of "Good" or "Adequate", or from persons who comply with what is established in article 188 of the LISF. 100 0 0 0

Account Management. 100 0 0 0

Guarantee trusts on values that comply with what is provided in articles 131 and 156 of the LISF. 75 35 15 0

Mortgage. 75 75 15 0

Encumbrance in Guarantee 75 75 15 0

Guarantee trusts on real estate. 75 35 15 0

Indemnity Contract from a foreign company with a rating "Superior", "Excellent" or "Good". 75 20 10 0

Indemnity Contract from a foreign company with a rating of "Adequate". 25 0 0 0

Joint obligation in favor of the Institution, of a Mexican or foreign company with a rating of "Adequate". 75 20 10 0

Guarantee trusts on values other than those provided in articles 131 and 156 of the LISF. 50 25 10 0

Pledge consisting of values other than those provided in articles 131 and 156 of the LISF. 50 25 10 0

Guarantee trusts on movable property. 50 25 10 0

Pledge consisting of movable property. 50 25 10 0

Proven solvency. 40 20 10 0

Ratification of signatures 35 15 0 0

Signature of joint obligor, natural person with a verified patrimonial relationship. 25 10 0 0

Pledge of book credits. 50 25 10 0

Current Account Agents

(13) In the concept of Agents, Current Account, operations on behalf of or in favor of natural or legal persons who intervene in the contracting or advice of insurance or surety contracts shall be registered, in accordance with what is provided in articles 91, 101 of the LISF, excluding premiums pending collection in the hands of Agents.

(14) Likewise, at the end of each month this item shall only present the net debtor balances, so the amount of the net credit balances must be transferred to the liability item.

(15) With the purpose of recognizing the figures relative to each new period, the previous movement must be cancelled and at the same time, if applicable, the amount of the newly determined net credit balances shall be registered.

Adjusters, current account

(16) The amount of operations on behalf of or in favor of natural or legal persons who intervene in the adjustment of claims, in accordance with what is provided by article 109 of the LISF, must be registered in the corresponding debtor item.

(17) At the end of each month it shall only present the net debtor balances pending application, so the amount of the net credit balances must be transferred to the liability item.

(18) With the purpose of recognizing the figures relative to each new period, the previous movement must be cancelled and at the same time, if applicable, the amount of the newly determined net credit balances shall be registered.

Debtors for Unmerited Paid Claims

(19) Institutions that operate sureties or caution insurance, must register in their accounting all operations they carry out, regardless of their origin, among which stands out the registration of debtors for unmerited paid claims, which in accordance with the minimum catalog referred to in Criterion C-1 of this Annex, is considered as an asset.

(20) Institutions that operate sureties or caution insurance and that carry out legal procedures, for the concept of request for return of payments made for surety claims or payments of the claim to the beneficiaries of the caution insurance, motivated by the collection by

part of the beneficiary, of a case of non-compliance by the sureties or insured parties, even if the Institution has sufficient elements to demonstrate that there was no non-compliance, must recognize the right to collect or recover payments at the moment it is proven that the payment of the claim or the payment of the loss was not warranted.

(21) Considering that, simply by the passage of time, the collection rights that Institutions operating surety bonds or surety insurance maintain deteriorate, Institutions operating surety bonds or surety insurance must register the collection right in their assets, in accordance with the percentages established in the table annexed to this criterion.

(22) Expenses incurred for the recovery of paid claims must be recorded directly in results, as well as the income obtained from them at the time.

(23) The registration of collection rights will remain in the asset for a period of four years, counted from when Institutions operating surety bonds or surety insurance carry out legal procedures, regarding the request for return of payments made for surety bond claims or loss payments to the beneficiaries of surety insurance, attending to the temporality and percentages indicated in the table annexed to this criterion. To this effect, the collection right must be cancelled once the aforementioned term has concluded and carried to the item of uncollectible accounts, as it is being cancelled.

(24) The accounting in uncollectible accounts and the cancellation of the asset may be carried out in advance when Institutions operating surety bonds or surety insurance have elements that attest to their registration;

Percentages for recognition of collection rights

(Debtors for paid claims not warranted)

TYPE OF DEBTOR

PERMANENCE IN THE ASSET

1st year

2nd year

3rd year

4th year

5th year

Debtors for paid claims not warranted

100

75

50

25

0

(25) At the close of the fiscal year, Institutions operating surety bonds or surety insurance must inform their board of administration of the amounts registered in assets, results, as well as of the cancellation of collection rights.

h)

Accounts Receivable (B-8)

(1) Institutions and Mutual Societies must adhere primarily to what is established in this criterion, as well as observe the criteria indicated in NIF C-3 "Accounts Receivable" and NIF C-16 "Impairment of financial assets receivable", from the Financial Information Standards issued by CINIF, provided that this is not contrary to what is established in the LISF and in the administrative provisions emanating from it.

(2) Institutions and Mutual Societies must observe the criteria indicated in NIF C-3, which shall only be applicable to the "other accounts receivable" referred to in paragraph 20.1 of said NIF.

(3) The following topics are not subject to this criterion:

the criteria B-3 "Loan of securities", B-4 "Repo Agreements" and B5 "Loans", issued by the Commission in this Annex;

those corresponding to the collection rights defined in criteria B-7 "Debtors", B-9 "Reinsurers and Reassurers" and B-25 "Surety Insurance" of this Annex, and

paragraph 4 of criterion B-23 "Leases" of this Annex, relating to accounts receivable arising from operating lease transactions.

(4) Institutions and Mutual Societies must create, if applicable, an estimate that reflects their degree of uncollectability. Such estimate must be obtained by applying what is provided in section 42 of NIF C-16.

(5) When Institutions and Mutual Societies use the practical solutions referred to in paragraph 42.6 of NIF C-16, the establishment of estimates must be for the total amount of the debt and must not exceed the following terms:

Within 60 natural days following their initial registration, when they correspond to unidentified debtors, and

Within 90 natural days following their initial registration, when they correspond to identified debtors.

(6) No estimate shall be established for write-offs for uncollectability or difficult collection in the following cases:

tax balances in favor;

creditable value added tax;

liquidating accounts;

security deposits;

dividends receivable on shares, and

debtors for interest on deposits received as security for surety bonds.

(7) Concepts resulting from transactions between the parent company and branches shall be subject to the following:

(8) Movements referred to transactions between the parent company and branches must be matched at the close of the annual financial statements, so they must not show any balance; likewise, all transactions must be recorded in the debtor account and at the end of each month only present the net debtor balances, so they must transfer to the liability account the amount of the net creditor balances. With the purpose of recognizing the figures relative to each new period, the previous movement must be cancelled and at the same time, if applicable, the amount of the newly determined net creditor balances will be recorded again;

(9) Registration of uncollectible accounts.- Insurance and surety institutions must register in off-balance sheet accounts the amount of Uncollectible Credits that have been written off by the institution, maintaining control by lines of business in those cases that so warrant.

i)

Reinsurers and Reassurers (B-9)

Objective and scope

(1) This section establishes the accounting criteria that Institutions and Mutual Societies must adhere to in reinsurance and reassurance operations they carry out, in accordance with contracts, endorsements or any other related documents, by which assets and liabilities must be registered and results affected derived from said operations.

Criteria applicable in matters of reinsurance or reassurance.

Asset

Insurance and Surety Institutions

Insurance Institutions, current account (asset-liability)

(2) All items arising from reinsurance operations and carried out with institutions from the country and abroad must be registered in the item of Insurance and Surety Institutions, at the end of each month only net debtor balances for the reinsurer will be presented, so they must transfer to the corresponding liability item the amount of net creditor balances for the reinsurer. With the purpose of recognizing the figures relative to each new period, the previous movement of the transfer of the liability must be cancelled and at the same time, if applicable, the amount of net creditor balances newly determined in said item will be registered.

Commissions Receivable/Payable for Reinsurance and Reassurance Taken/Ceded (asset-liability)

(3) Institutions and Mutual Societies that have ceded reinsurance or reassurance will register the amount of the commission receivable corresponding to the premium retained for Concept of Reserve for Risks in Course or Surety Bonds in Force, which they have carried out in accordance with articles 34 fraction V, 35 fraction V and 54 of the General Law of Insurance and Mutual Societies of Insurance in force until April 3, 2015; said commission will be due upon the release of the corresponding reserve. In reinsurance or reassurance operations taken, the accepting Institutions will register the amount of commissions payable relative to the premiums retained by them for Concept of Reserve for Risks in Course, said commission will be due upon the release of the corresponding reserve.

Surety Institutions, Current Account (asset-liability)

(4) At the end of each month only net creditor balances will be presented. With the purpose of recognizing the figures relative to each new period, the previous movement must be cancelled and at the same time, if applicable, the amount of net creditor balances newly determined will be registered.

Retained Deposits:

Premiums retained by reinsurance and reassurance taken

(5) In this item, the amount of reserves for premiums that have been retained by the ceding parties, as well as premiums retained by foreign institutions in reassurance operations taken, will be registered.

Losses retained by reinsurance taken

(6) In this item, the amount of the loss reserve that has been retained by the ceding parties, in accordance with the respective contracts, will be registered.

Participation of Foreign Institutions or Reinsurers for Risks in Course

(7) In this item, the amount of the Participation of Institutions in the Reserve for Risks in Course will be registered monthly, for reinsurance ceded or retroceded, as well as the participation in said reserve of foreign reinsurers that are registered in the General Register of Foreign Reinsurers to take reinsurance and reassurance of the country, determined in accordance with applicable provisions.

(8) Insurance Institutions and Mutual Societies that carry out life operations, in addition to constituting the Reserve for Risks in Course for all obligations assumed in accordance with applicable regulations, when reporting the cession of risks to Insurance Institutions and/or foreign reinsurers registered in the General Register of Foreign Reinsurers to take reinsurance and reassurance of the country, must constitute in the recoverable amount of reinsurance for Risks in Course in accordance with the cession percentages established by proportional reinsurance contracts, considering what is indicated in Provision 8.20.2. of this Circular.

Participation of Institutions or Foreign Reinsurers for Pending Losses

(9) Institutions that have ceded or retroceded reinsurance will register in this item in the corresponding sub-account, the recoverable amount for the participation of reinsurers for estimated losses, pending adjustment and settlement.

(10) Likewise, in this concept, the recoverable amount of reinsurance for reinsurance operations corresponding to the Reserve for Obligations Pending to Fulfill for Losses Occurred and Not Reported and Expenses Assigned to Losses will be registered in the corresponding sub-account, as well as the expected amount of future obligations derived from reported losses, considering what is indicated in Provision 8.20.2.

Other Recoverable Reinsurance Amounts

(11) The criteria applicable to the different concepts included within this item are illustrative but not limiting to items of the same nature.

Participation of reinsurers for salvage pending sale by reinsurance taken and ceded (asset-liability)

(12) In this concept, the amount of salvage pending for sale at the date of the balance sheet or valuation (asset) will be registered. The Institution that has ceded direct insurance and retroceded the reinsurance taken, will reflect the amount of salvage pending for sale in favor of insurance and reinsurance institutions (liability).

Participation of reinsurers in cash-paid losses, of reinsurance taken

(13) In this item, the amount to be recovered for retroceded reinsurance of reinsurance taken for cash-paid losses will be registered.

Participation of reassurers for paid claims

(14) In this item, the amount of paid claims corresponding to the participation of country and foreign reassurance institutions for reassurance ceded and retroceded will be registered in the corresponding sub-account; and its cancellation will proceed when the corresponding funds for the respective paid claim are provisioned.

Participation of reassurers in constituted liabilities

(15) The amount corresponding to the liabilities of surety bonds ceded and retroceded in reassurance for which a liability was constituted and are in charge of the institutions with which the reassurance was ceded and retroceded, in accordance with provisions issued by the Commission, will be registered under this concept.

Participation of reinsurers for non-proportional reinsurance and reassurance coverage

(16) In this item, the amounts to be recovered for losses or claims will be registered, in accordance with what is stipulated in non-proportional reinsurance or reassurance contracts concluded.

Reinsurance and Reassurance Intermediaries (liability)

(17) Items deriving from brokerage operations in favor of intermediaries authorized by the Commission, in accordance with what is provided by article 106 of the LISF, must be registered in this item.

Participation of Institutions or Foreign Reinsurers in the Reserve of Surety Bonds in Force

(18) The Recoverable Amount of Reinsurance of the Reserve of Surety Bonds in Force that corresponds to Institutions for the cession and retrocession of premiums they carry out, will be registered under this item, considering what is indicated in Provision 8.20.2. of this Circular.

Estimate for write-offs of reinsurance or reassurance operations

(19) The asset items that Institutions and Mutual Societies must consider for the determination and accounting registration of estimates for write-offs of reinsurance or reassurance operations, will be those that are in force in the financial statements established by this Commission, relating to the following concepts:

Insurance Institutions current account

Surety Institutions, current account

Premiums retained by reinsurance and reassurance taken

Losses retained by reinsurance taken

Participation of reinsurers for salvage pending sale by reinsurance taken

Participation of reassurers for paid claims

Participation of reassurers in constituted liabilities

Participation of reinsurers for non-proportional reinsurance and reassurance coverage

Reinsurance and reassurance intermediaries

Others relative to collection rights generated against reinsurers or reassurers.

(20) Institutions and Mutual Societies must carry out at least once a year, a detailed analysis of all and each of the items that make up the items indicated above, for the purposes of the determination and accounting registration of estimates for write-offs of reinsurance or reassurance operations, they must consider, without being limiting, the following aspects:

The supporting documentation that attests to the items that make up the balances relative to facultative business, as well as confirmations from reinsurers on the quarterly balances reported by statements of account for Automatic Reinsurance Contracts and reassurance contracts;

The age of the items that make up the balance of the aforementioned reinsurance or reassurance accounts;

The degree of progress of collection efforts carried out by Institutions and Mutual Societies;

Litigation balances owed by reinsurers;

The financial and/or legal situation of reinsurers that may put the recovery of balances at risk, such as, among others, commercial insolvency, bankruptcy or liquidation status, and

That foreign reinsurers are registered in the General Register of Foreign Reinsurers to take reinsurance and reassurance of the country.

(21) It is the responsibility of the general management of Institutions and Mutual Societies to order that estimates for write-offs of reinsurance or reassurance operations be carried out, and for the external auditor, to evaluate the reasonableness of these.

(22) Therefore, the minimum criteria that Institutions, Mutual Societies and external auditors will apply to determine the registration and review of estimates for write-offs of reinsurance or reassurance operations, in accordance with what is provided by article 33 of the Commercial Code, by NIF C-3.- "Accounts Receivable" part of the Financial Information Standards, and by Chapter 22.2 of these Provisions regarding register books and auxiliary books, will be the following:

Items that make up the balances of the items indicated in paragraph (19) numerals 1) to 6), in which the corresponding supporting documentation is not available, may not remain registered in the asset, understood as such, reinsurance or reassurance contracts, statements of account, balance confirmation, payment or collection from reinsurers or reassurers and collection management;

To quantify the amount of items that make up the balance of reinsurance or reassurance accounts, a study must be carried out that serves as a basis to determine the value of those that will be deducted or cancelled, identifying items with an age greater than one year, to evaluate in accordance with the supporting documentation collected, the creation or increase of the corresponding estimate or, if applicable, its permanence within the asset;

Analyze the status of litigation relative to debts that reinsurers have with Institutions and Mutual Societies, evaluating from a legal point of view, the feasibility and expected percentage of recovery in order to register the corresponding estimate;

Increases or reductions made to the write-off accounts for reinsurance or reassurance operations must affect results in the fiscal year in which they are made;

For balances owed by reinsurers not registered in the General Register of Foreign Reinsurers to take reinsurance and reassurance of the country and for reinsurers that are in commercial insolvency, bankruptcy or in liquidation status, an estimate for doubtful collections must be established for 100%, unless Institutions and Mutual Societies have documentation that allows them to attest to the establishment of a percentage different from that indicated, and

The possible existence of significant subsequent events must be considered as support to establish the reasonableness of the estimates, or that affect the information and criteria used in the determination of said estimates.

(23) As a result of the analysis and determination of estimates for write-offs of reinsurance or reassurance operations, Institutions will have the obligation to register the estimates made in the write-off accounts, which for this purpose are established in the minimum catalog referred to in provision 38.1.8 of these Provisions.

(24) The probative documentation derived from the analysis and determination of items of doubtful recovery must be available in the files of Institutions and Mutual Societies. Likewise, in cases where, derived from the analysis carried out, the need to make an estimate for write-offs has not been determined, Institutions and Mutual Societies must maintain available the documentation that meets the requirements established in Chapter 22.3, which attests to the carrying out of said analysis.

(25) The Commission may order adjustments to said estimates for those items that do not meet the requirements indicated in these Provisions.

(26) Institutions and Mutual Societies must inform the reasons why they registered or, if applicable, cancelled the items that make up the balance of the accounts for estimates for write-offs of doubtful collections generated by reinsurance or reassurance operations, through disclosure notes to the financial statements of the close of the fiscal year in question.

Preventive estimate of credit risks of Foreign Reinsurers

(27) Institutions or Mutual Societies that carry out operations with foreign reinsurers must register a preventive estimate of credit risk that decreases the recoverable amount of reinsurance referred to in Chapter 8.20. in concordance with Annex 8.20.2. of this Circular, recognizing the same in the specific items of "Preventive estimate of credit risks of Foreign Reinsurers" in the asset and "Preventive write-offs for Recoverable Reinsurance Amounts" in results, both items indicated in the minimum catalog referred to in Criterion C-1 of this Annex.

Liability

Retained Deposits

Premiums retained by reinsurance and reassurance ceded

(28) Institutions or Mutual Societies that have ceded or retroceded reinsurance or reassurance will register the amount of premiums retained to Institutions or Foreign Reinsurers that they have carried out in accordance with articles 34 fraction V, 35 fraction V and 54 of the General Law of Insurance and Mutual Societies of Insurance in force until April 3, 2015.

Reserve of losses retained by reinsurance ceded

(29) Institutions or Mutual Societies that have ceded or retroceded reinsurance or reassurance will register the amount of loss reserves retained to Institutions or Foreign Reinsurers that they have carried out in accordance with articles 34 fraction V, 35 fraction V and 54 of the General Law of Insurance and Mutual Societies of Insurance in force until April 3, 2015.

Other participations

Participation to reassurers for guarantees pending recovery

(30) The part of the guarantees to be recovered corresponding to reassurance institutions, derived from surety bond claims for reassurance ceded and retroceded, will be included in this item.

Participation to reassurers for recoveries, payable

(31) Recoveries pending payment to reassurers for reassurance ceded and retroceded, once the recovery on the written-off surety bond has been obtained, will be shown under this item.

Creditors for Premiums of Non-Proportional Reinsurance and Reassurance Coverage

(32) It will reflect the amount of premiums pending payment derived from non-proportional reinsurance and reassurance contracts concluded, as well as provisions for such concepts.

Presentation standards

(33) Concepts relative to reinsurers and reassurers in the terms established in this Provision, must be shown in the Consolidated Balance Sheet of Institutions, grouped in the item of reinsurers and reassurers of the asset and liability, as appropriate.

Financial reinsurance

(34) This criterion establishes the accounting treatment to which Institutions must adhere in financial reinsurance operations they carry out, for presentation.

(35) The funds that Institutions obtain through financing from financial reinsurance contracts, which represent rights and obligations, shall be registered under the following concepts:

Asset

i.

Loans from financial reinsurance contracts granted.- refers to the amount of financing obtained pending collection, from financial reinsurance operations;

ii.

Debtors for interest on loans and Credits for financial reinsurance, which corresponds to accrued interest pending collection for financing obtained in financial reinsurance operations, and

iii.

Estimation for Write-off of loans from financial reinsurance contracts granted, corresponds to the Write-off effected due to non-compliance with the deadlines agreed upon in financial reinsurance contracts for the loan and interest, in accordance with what is stated in criterion B-8 Accounts Receivable.

Liability

i.

Creditors from financial reinsurance contracts, corresponds to the payment commitment on financing obtained through financial reinsurance operations, and

ii.

Creditors for interest on financial reinsurance contracts, refers to accrued interest payable derived from financial reinsurance contracts.

Results

i.

Write-offs, corresponds to the charge to results for the Write-off effected due to non-compliance with the deadlines agreed upon in financial reinsurance contracts for the loan and interest generated pending collection, in accordance with what is stated in criterion B-8 Accounts Receivable;

ii.

Interest derived from financial reinsurance contracts, corresponds to the interest owed by the institution established in financial reinsurance contracts, calculated according to the rate agreed upon in the financial reinsurance contracts, and

iii.

Interest on financial reinsurance contracts granted, corresponds to the accrued interest derived from financial reinsurance loans granted, calculated according to the rate agreed upon in the contracts.

Recognition and Valuation Standards

(36) All assets and liabilities derived from reinsurance operations shall be recognized and valued in the balance sheet.

Participation of Reinsurers or Surety Reinsurers

(37) In the case of the participation to which Institutions are entitled arising from the cession of responsibilities assumed in insurance and surety policies or in proportional and non-proportional reinsurance and surety reinsurance contracts, this shall be recognized for accounting purposes at the following moments:

For the purpose of ceded premiums:

a)

At the time of premium issuance and if there is a proportional reinsurance contract.

b)

When a risk already issued is ceded.

For the purpose of the participation of institutions and reinsurers for claims:

a)

On the same date that the claim or complaint giving rise to it is accounted for.

b)

On the valuation date of the Reserve for Incurred and Unreported Claims and Adjusted Expenses for Incurred and Unreported Claims.

Its valuation shall be carried out in accordance with the participation corresponding to each reinsurer in the reinsurance contract and the currency in which it was concluded.

Retention of resources with reinsurers

(38) In reinsurance and surety reinsurance operations taken, the retention of resources that cedents effect for the cession of responsibilities assumed in insurance and surety policies to Institutions, their accounting registration shall be recognized under the item "Premiums retained for reinsurance and surety reinsurance taken", in the month following the subscription of the insurance contracts, in accordance with the information provided by the cedent.

(39) Its valuation shall be carried out in accordance with the participation corresponding to each reinsurer in the reinsurance contract and the currency in which it was concluded.

Current Account

(40) The items comprising the current account items of Institutions shall be recognized under this concept when payment or collection for such items is accepted. In the case of the Reinsurance and Surety Reinsurance Intermediaries current account item, only the brokerage that Institutions must pay to reinsurance intermediaries shall be registered and recognized under this item at the moment that the issuance of premiums taken on the risks or responsibilities assumed is recognized.

(41) Valuation shall be carried out in accordance with the amount to be received or delivered in the currency in which the reinsurance operations were concluded. Likewise, the balances of paid claims that are registered under the item "Participation of Institutions or Foreign Reinsurers for Pending Claims" shall be recognized in the amount of the current account at the moment that payment of said claims is made.

Advances of Commissions and Profit Participation in Reinsurance

(42) Advances of reinsurance commissions and profit participation shall be recognized as a liability under the item "Insurance Institutions current account" or "Surety Institutions", as applicable, for the amount of cash received in excess of the application of the reinsurance or surety reinsurance commission percentages established in the corresponding contracts in relation to the cession of premiums; likewise, such advances shall be recognized at the moment that the cession of corresponding premiums is accounted for.

(43) Likewise, an advance shall be recognized for the amount of reinsurance commissions that exceeds the amount of the ceded premium corresponding to the same reinsurance contract and period of its validity, for which it shall be recognized at the moment that the cession of premiums is accounted for or in accordance with accrual based on the validity period of the contract. (by period, it shall be understood that established in the particular or specific conditions of the contract).

(44) In the case of the advance of reinsurance profit participation (account to compare reinsurance income and expense), it shall be recognized as a liability for the amount of cash received before the deadline established to determine the reinsurance result in accordance with the conditions established in the corresponding contract, which shall not be less than the validity period of the contract (by period it shall be understood, the coverage validity established in the particular or specific conditions of the contract). Reinsurance profits shall be attributable largely to the quality of the cedent's underwriting and the certain result of direct insurance, always attending to the substance of the reinsurance contract, its private nature, and the indemnificatory character of uncertain risks.

(45) The valuation of said advances shall be carried out in accordance with the amount received and the currency in which the reinsurance operations were concluded.

Provisions for Reinsurance Payments

(46) The premiums for non-proportional reinsurance and surety reinsurance coverages of reinsurance contracts shall be recognized in the liability and in the results accounts in accordance with what is stated in NIF C-9 "Provisions, Contingencies and Commitments" issued by CINIF.

Presentation Standards

(47) Loans and interest from financial reinsurance contracts are presented in the asset within Current Portfolio; if they are overdue, they shall be presented in Overdue Credit Portfolio, and, if applicable, the estimation for Write-off of loans from financial reinsurance contracts.

(48) The financing obtained and the interest inherent to financial reinsurance contracts shall be presented in the liability within the item of financing obtained from financial reinsurance contracts.

(49) In results, it is part of the comprehensive financing result, in the line item of financial reinsurance.

j)

Permanent Investments (B-10)

(1) This section aims to make known the criteria to which Institutions and Mutual Societies shall be subject when they hold shares in one or more subsidiaries, for the preparation of consolidated financial statements, in order to know the general financial situation that these Institutions and Mutual Societies have with their subsidiaries; therefore, the Commission considers it convenient to have the consolidated financial statements of said corporate groups, which shall be formulated in accordance with NIF B-8 "Consolidated or Combined Financial Statements".

(2) Likewise, for the case of permanent investments considered as associates, Institutions and Mutual Societies shall adhere to NIF C-7 "Investments in Associates, Joint Ventures and Other Permanent Investments" issued by CINIF, except for the provisions and definitions stated in this Chapter.

(3) The four basic consolidated financial statements show the financial situation, results, changes in equity, and Cash Flows of an economic entity which is composed of the controlling entity and its subsidiaries, which may have an economic figure equal to or different from the controller.

(4) The Institution, Mutual Society that has the character of a controlling entity, shall establish the necessary methodology to allow the homogenization of the registration and valuation of operations carried out by subsidiaries, with the records of these Institutions and Mutual Societies, in order to adequately carry out the consolidation process, for which they shall take into account the following:

Temporary Investments.- Subsidiaries that are not Institutions or Mutual Societies that within their assets have temporary investments, for consolidation purposes shall be valued in accordance with the criteria established by this Commission and make the corresponding adjustments;

Real Estate.- Subsidiaries that are not Institutions or Mutual Societies or real estate companies and that have real estate, for consolidation purposes their valuation shall adhere to the corresponding NIFs.

Likewise, balances corresponding to "estimation for impairment of long-term assets" shall be included within the format stated in criterion C-1, under the item "Real Estate" and in results under the item of investment valuation the balance corresponding to "impairment loss";

Other Assets.- Subsidiaries that are not Institutions or Mutual Societies and that have other types of assets not stated in the minimum catalog referred to in Criterion C-1 of this Annex, for consolidation purposes shall form part of the Debtors group under the item "Various" or within the item "Other Assets", considering the nature of the asset, stating in a separate line the description of the assets that are incorporated into the minimum catalog, which for this effect the Institution or Mutual Society shall send to the Commission;

Technical Reserves.- In the case that subsidiaries are Institutions or Mutual Societies, the technical reserves that they individually report in their financial statements shall sum the reserves originated between them and the controller, subtracting the participation for the concept of reinsurance and/or surety reinsurance that they have operated between them, in virtue that the controller shall be considered as the total holder of the obligations, and

Other Liabilities.- Subsidiaries that are not Institutions or Mutual Societies and that have other types of liabilities not stated in the minimum catalog referred to in provision 38.1.8 of these Provisions, for consolidation purposes shall form part of the Creditors group under the item "Various" or within the item "Other Liabilities" considering the nature of the liability, stating in a separate line the description of the liabilities that are incorporated into the minimum catalog, which for this effect the Institution or Mutual Society shall send to the Commission.

Permanent Investments.- For the valuation of shares that Institutions hold in Insurance Institutions, the sum of equity capital and the catastrophic risk reserve, divided by the number of shares in circulation, shall be considered.

For the valuation of shares that Institutions hold in other surety institutions, it shall be determined by the sum of equity capital and the contingency reserve, divided by the number of shares in circulation.

(5) In the case of income and expenses registered by subsidiaries, different from the operations registered by Institutions and Mutual Societies, for consolidation purposes they shall be integrated into other income and other expenses and grouped in the line item of operational and administrative expenses.

(6) For the recognition of transactions in foreign currency and of foreign operations, in the financial statements of subsidiaries that qualify as foreign operations, the provisions stated in NIF B-15 "Conversion of Foreign Currencies" must be observed, except for what is established in the criteria corresponding to "Estimation of assets and liabilities and off-balance sheet items" and "Availability and Temporary Investments", taking into consideration that Institutions and Mutual Societies carry out specialized operations. Likewise, instead of using the item "Changes", within equity the item "Accumulated Effect from Conversion" shall be included in a separate line item.

k)

Technical Reserves (B-11)

Objective

(1) This criterion aims to establish the bases for Institutions and Mutual Societies to carry out the accounting registration of technical reserves, referred to in articles 216 and 220 of the LISF and Title 5 of the CUSF.

Valuation

(2) Institutions and Mutual Societies shall constitute and value technical reserves in accordance with what is established in articles 218, 219, 221 and 222 of the LISF, as well as what is stated in the provisions of Title 5 Of Technical Reserves, of this Circular and other applicable provisions.

Registration

(3) Institutions and Mutual Societies shall register in their accounting the liabilities for technical reserves and register the corresponding increase or decrease in the results items contemplated for this effect in the minimum catalog referred to in Criterion C-1 of this Annex.

(4) Likewise, in accordance with what is provided in articles 224 and 228 of the LISF, the registration of technical reserves shall be carried out monthly, for each operation and line of business, or for each line or sub-line, in accordance with the result yielded by the valuation.

(5) Technical reserves determined in foreign currency (dollars) shall be accounted for in that currency in the corresponding liability in the items established according to the minimum catalog and in results at the equivalent in national currency at the close of each month.

Reserve for Risks in Course

(6) For the Reserve for Risks in Course of life, accident and health, and damage operations, Institutions shall register under the item "Reserve for Risks in Course (Valuation at Agreed Technical Rate)" the result of the valuation of said reserve, of those policies in force in the month of valuation in question (t+n) that began their validity in month (t), applying the procedures and principles established in Chapters 5.1 and 5.3., using for the valuation, the conditions and the technical interest rate or rates corresponding to the last business day of said month (t). The registration of the aforementioned reserve shall be applied against results in the item of net increase to the Reserve for Risks in Course. Likewise, in the asset, recoverable amounts of reinsurance shall be registered under the item "Participation of Institutions or Foreign Reinsurers for risks in course (Valuation at Agreed Technical Rate)" and the estimation for non-compliance which shall affect results in the concept of preventive write-offs for recoverable amounts of reinsurance, established in the minimum catalog referred to in Criterion C-1 of this Annex.

(7) In the valuation that, month by month, is carried out of the Reserve for Risks in Course of long-term insurance, variations that arise in its value due to differences between the interest rates used for the original calculation ("Agreed Technical Rate") and the market interest rates used for the monthly valuation of the corresponding technical reserve shall be determined. These variations shall be registered under the item named "Result in the Valuation of the Reserve for Risks in Course of Long Term due to Variations in Interest Rate". Additionally, the corresponding effects in Recoverable Amounts of Reinsurance shall be registered under the Asset item named "For Participation of Institutions or Foreign Reinsurers for risks in course (Variation at Agreed Technical Rate)".

The "Result in the Valuation of the Reserve for Risks in Course of Long Term due to Variations in Interest Rate" shall be determined solely by the change in the interest rates employed, so that in the first valuation of the Reserve for Risks in Course of long-term insurance in accordance with these Provisions, a valuation shall be carried out that identifies the amount that comes from the change in the interest rate employed, as well as the amounts coming from changes in the calculation methodology and demographic hypotheses. For these effects, Institutions shall carry out a valuation with the valuation method registered with the Commission in accordance with these Provisions employing the technical interest rate with which the reserve was being valued before the entry into force of these Provisions ("Agreed Technical Rate"), and compare said amount with the valuation of the reserve applying the market risk-free rate curve corresponding in accordance with these Provisions, understanding that the difference between the amounts obtained with said valuations is the effect produced solely by the change in the interest rates employed.

(8) The sum of the item "Reserve for Risks in Course (Valuation at Agreed Technical Rate)" and the item "Result in the Valuation of the Reserve for Risks in Course of Long Term due to Variations in Interest Rate", shall be the value that shall be presented under the general item "Reserve for Risks in Course", which shall be consistent with the valuation of said reserve in accordance with the procedures and principles established in Chapters 5.1 and 5.3., and using for the valuation, the market risk-free interest rate or rates corresponding to the month of valuation (t+n) in question.

(9) Likewise, in congruence with the calculation of the Reserve for Risks in Course, the corresponding recoverable amounts of reinsurance shall be determined, using the items of the minimum catalog established for this effect in this Annex.

(10) Additionally, in equity, in congruence with the registration established for the liability:

(11) The variations that arise in the value of the Reserve for Risks in Course and in the Recoverable Amounts of Reinsurance of long term due to differences in the interest rates employed in their valuation, shall correspond to unrealized losses or gains, which could be reversed subsequently depending on the movements of the rates employed for valuation, so their registration shall affect equity under the item "Surplus / Deficit from Valuation of the Reserve for Risks in Course of Long Term".

(12) Likewise, the deferred tax that, if any, is generated from the registration of variations from the valuation of the Reserve for Risks in Course of long term under the item "Deferred Income Tax of the Reserve for Risks in Course of Long Term" shall be considered.

Reserves for obligations pending to fulfill

(13) In accordance with what is established in article 303 of the LISF, Institutions and Mutual Societies shall keep the registration of claims, maturities, and received complaints up to date. Likewise, reserves for obligations pending to fulfill shall be valued in accordance with the methodology established for each of them in the respective provisions, registering the liability under the item of contractual obligations, in the corresponding concept against results and in the asset, the recoverable amounts of reinsurance and the estimation for non-compliance, which shall affect results, in the concepts established for this effect in the minimum catalog referred to in Criterion C-1 of this Annex.

The special mathematical reserve, the reserve for investment fluctuation, the contingency reserve, the catastrophic risk reserve, and those others determined by the Commission.

(14) Their registration shall be carried out in the corresponding liability as well as in their results, in accordance with the methodology established for each of them in the respective provisions and in accordance with the concepts established in the minimum catalog referred to in Criterion C-1 of this Annex.

Reserve for Sureties in Force

(15) For the Reserve for Sureties in Force, they shall register the corresponding total liability against results in the concept of net increase of the Reserve for Sureties in Force and in the asset, the recoverable amounts of surety reinsurance and the estimation for non-compliance, which shall affect results in the concept of preventive write-offs for recoverable amounts of surety reinsurance, established in the minimum catalog referred to in Criterion C-1 of this Annex.

Contingency Reserve for Sureties

(16) The liability determined in accordance with the respective calculation bases shall be registered against its results, in accordance with the minimum catalog. Said contingency reserve for sureties is cumulative and shall only cease to increase when so determined by the Commission.

Presentation

(17) In accordance with the formats of the financial statements established in Series III. Criteria relative to the basic consolidated financial statements of the CUSF, the amounts of technical reserves that Institutions and Mutual Societies register shall be presented under the item of Technical Reserves in the Balance Sheet.

Specific technical reserves

(18) In order to establish the bases for the accounting registration of the constitution and/or cancellation of specific technical reserves ordered by CONDUSEF, cited in Chapter 5.18 of this Circular, Institutions and Mutual Societies shall carry out the accounting entry of constitution and/or cancellation of each specific technical reserve, through an individual daily journal entry containing the following data:

Constitution of Reserves.

i.

Number of daily journal entry for reserve constitution;

ii.

Policy date of registration journal entry for constitution;

iii.

Number of official document issued by CONDUSEF containing the respective order;

iv.

Date of the official document issued by CONDUSEF containing the respective order;

v.

Name of the insured, and

vi.

Constitution of specific technical reserves, in accordance with the minimum catalog referenced in Criterion C-1 of this Annex, and

Cancellation of Reserves.

i.

Policy number of the journal entry for reserve cancellation;

ii.

Date of the journal entry policy for reserve cancellation;

iii.

Number of official document issued by CONDUSEF with which its constitution was ordered;

iv.

Date of the official document issued by CONDUSEF containing the respective order;

v.

Name of the insured, and

vi.

Cancellation of specific technical reserves, in accordance with the minimum catalog referenced in Criterion C-1 of this Annex.

(19) The journal entries with all the indicated data must be kept available in the offices of the Institutions and Mutual Societies, in case the Commission requires the corresponding information and verification.

(20) The Insurance Institution or Mutual Society that has accounted for the specific technical reserves of each month, through a globalizing accounting journal entry, must present to this Commission, within the information indicated in this Criterion, corresponding to the "Date of the journal entry policy for the registration of the reserve", the date on which the reserve was registered in the claims register referred to in article 303 of the LISF, provided that the amount of this reserve is part of the respective total amount of the global journal entry.

Accounting registration of additional benefits of pension insurance derived from Social Security Laws

(21) This section aims to establish uniform criteria for the accounting registration of costs and expenses incurred by authorized Insurance Institutions for the practice of pension insurance derived from social security laws, for the additional benefits they grant, relative to policies whose offers have not been issued through the Offer and Resolution Administrator System referred to in Chapter 14.4 of this Circular.

(22) In the additional benefits to basic pensions granted directly by the Insurance Institution and which by their nature originate the constitution or increase of risk reserves in force, these must be registered from the moment the obligation to grant the corresponding benefits arises, and said registration will be charged to results in an item called "Net Increase of Risk Reserve in Force", sub-items "For Additional Benefits of Direct Insurance", or, "For Additional Benefits of Retroceded Reinsurance" as applicable, indicated in the minimum catalog referenced in Criterion C-1 of this Annex.

(23) The Insurance Institution must register at the moment the obligation to pay additional benefits arises, the reserve for pending obligations for claims occurred, charged to results in the item of claim experience and other contractual obligations, in the sub-items called "Claims for Additional Benefits of Direct Insurance", "For Pensions" and in the sub-item "Claims for Additional Benefits of Retroceded Reinsurance", "For Pensions", indicated in the minimum catalog referenced in Criterion C-1 of this Annex.

Premiums in Deposit

(24) They are represented by all those cash inflows for the payment of insurance premiums and surety bonds that are received in advance or are pending application, as well as all those deposits registered in the bank accounts of the Institutions whose origin has not been identified, considering that the main source of income of the Institutions corresponds to the collection of premiums.

(25) Premiums in Deposit represent an obligation for the Institutions, so they must be reported in a liability item, which will be decreased when its application is made against the items of premiums receivable.

l)

Off-Balance Sheet Accounts (B-12)

(1) In off-balance sheet accounts, Institutions will register values that do not directly affect or modify the items of the Balance Sheet and the Statement of Results, and serve for administrative controls or reminders, and will be grouped at minimum as follows according to the criteria indicated in each case.

Group: Values in deposit

i.

Values in custody.- Values received in custody;

Recovery guarantees in the possession of the Institution, of which the surety bonds have been cancelled, and which have not been claimed by the surety or solidary obligor. For the deposits registered here, no asset and/or liability accounts of the Institution shall be affected.

ii.

Values in pledge.- Values received as guarantee for loans granted;

iii.

Seized assets.- Assets, values and rights on which the institution has placed a seizure and which are under its responsibility or that of third parties, and

iv.

Collateral of financial guarantee insurance.- Collateral received, whether cash, the Nominal Value of Letters of Credit, the Value or Market Price of securities, titles or documents, as well as the Cash Flows of securities, with which authorized Institutions have as additional guarantee or backing for the obligations derived from a Financial Guarantee policy, as established in the Rules of Operation for Financial Guarantee Insurance.

Group: Funds in administration

i.

Funds for labor obligations in administration.- They will register the amount that the insurer administers for these concepts; independently of these records, they must carry out the necessary ones to control this type of operations, by contractor and class of investment;

ii.

Funds in administration.- Amount that the insurer administers for these concepts; independently of these records they must carry out the necessary ones to control this type of operations;

iii.

Funds received in administration of losses.- Amount of deposits received by the insurer and the expenditures made as a consequence of these operations, keeping an individual record for each contract entered into;

iv.

Trusts.- Amounts that the insurer or surety company receives for these concepts to administer, they must also establish a special accounting for each contract they enter into, in which they will register the money and other goods, values and rights entrusted to them, as well as the increases and decreases, for the respective products or expenses, the balances of the controlled accounts must invariably coincide with those of the special accountings, and

The losses borne by the entity for the responsibilities incurred as a fiduciary, will be recognized in results in the period in which they are known, regardless of the moment in which any legal promotion is made to that effect.

The recognition of income from the management of trusts must be made based on accrual. The accumulation of such accrued income must be suspended at the moment when the debt for these presents 90 or more natural days of non-payment of payment, being able to accumulate again when the pending payment debt is liquidated in its entirety.

While the accrued income from the management of trusts is suspended from accumulation and not collected, the control of them will be carried out in off-balance sheet accounts. In case such accrued income is collected, it will be recognized directly in the results of the exercise.

v.

Products in favor of settlors in administration.- Total amount after taxes, in favor of the settlors and before any type of discount for commissions received by insurers or surety companies and its balance will be cumulative, being settled at the end of each social exercise.

Group: Responsibilities for surety bonds in force.

Surety bonds in force.- Amount of the responsibilities borne by the Institution, and

Surety bonds ceded in retrocession.- Amount of the responsibilities ceded and retroceded in retrocession to national and foreign institutions.

Group: Recovery guarantees for issued surety bonds and for Surety Insurance.

i.

Recovery guarantees.- Corresponds to the amount of guarantees granted by the sureties and solidary obligors, which must be registered at their fair value, whether by direct issuance or by retroceded reinsurance; They must keep control of the guarantees granted by the issuance of direct surety bonds separately from those of the retroceded reinsurance. When the amount of the guarantee is higher than the value of the assumed responsibilities, it will be registered as the maximum amount only the amount of the cumulus of the assumed responsibilities. For the deposits registered here, no Asset and/or Liability accounts of the institution shall be affected.

Guarantees granted by debtors for the issuance of surety insurance policies registered at their fair value, whether by direct issuance or by reinsurance; having control of the certificates of direct surety insurance separately from those of reinsurance. For the deposits registered here, no Asset and/or Liability accounts of the Institution shall be affected.

The amount of accrued and collected interest, derived from guarantees consisting of cash, unless otherwise agreed, will form part of the value of said guarantees; having control that allows separating the corresponding principal from the interests and from them only may be disposed when the surety insurance or the surety bond are claimed or cancelled, as the law provides.

ii.

Participation in retrocession of recovery guarantees. Guarantees granted by the sureties and solidary obligors for the retrocession operations ceded and retroceded to other institutions. They must keep control of the surety bonds they cede from the direct and those they cede from the taken. It will be registered as maximum the amount of the ceded responsibilities, and

iii.

Participation in reinsurers of recovery guarantees. Guarantees granted by debtors for the issuance of policies and insurance certificates for reinsurance operations ceded and retroceded to other institutions.

Group: Received claims pending verification

i.

Received claims;

ii.

Received claims that are pending justification taking as maximum limit for their registration the amount of the surety bond policy. Cancellation movements will proceed when the claim is paid, it is qualified as improper or there is withdrawal. In case there is litigation in the claim, the registration must remain in this account, and

iii.

Participation of received claims.- Amount of the participations that correspond to other institutions, for the claims pending justification of surety bond policies in which retroceded reinsurance has operated. They must have control over the surety bonds ceded from the direct and ceded from the taken.

Group: Contingent claims

i.

Contingent claims.- They refer to the registration of received claims that have been presented to the surety company and which has knowledge and verification that there is some litigation between the surety and beneficiary to determine the exigibility of the policies, without until that moment being part of the litigation the surety company. Likewise, it corresponds to the registration of those claims in which the surety company has determined some deficiency in the information presented by the beneficiary and is within the period indicated in article 279 of the LISF for its proper integration.

Likewise, the amount claimed in excess of the amount covered by the surety bond policy will be registered, in accordance with the applicable administrative provisions. For the scenarios that affect the status of the received claims in the surety company, the applicable accounting reclassifications must be made in order to keep the information updated regarding said claims, as indicated in the applicable administrative provisions.

Likewise, the amount of contingencies in litigation for surety bonds granted in public works contracts will be registered, as established in paragraph C-1 Claims of this Circular, and

ii.

Participation of contingent claims.- Amount of the participations that correspond to other institutions for the contingent claims of surety bond policies in which retroceded reinsurance has operated. They must have control over the surety bonds ceded from the direct and ceded from the taken, as well as of the claims that the institution has verification that there is some litigation between the surety and the beneficiary, without until that moment the surety company being a participant in said litigation; and of the claims that are in the process of integration, as well as the claims for amount higher than the amount specified in the respective policy, in accordance with the applicable administrative provisions.

Group: Paid claims

i.

Paid claims.- Amount of the claims paid by the institution in the exercise due to the assumed responsibilities, and

ii.

Participation of paid claims.- Amount of the responsibilities paid in the exercise, ceded and retroceded in retrocession to national and foreign institutions. They must have control over the surety bonds ceded from the direct and ceded from the taken.

Group: Cancelled claims

i.

Cancelled claims of the exercise.- Amount of the claims that the institution cancels in the exercise because they have been determined as improper, and

ii.

Participation of cancelled claims.- Amount of the claims cancelled in the exercise, ceded and retroceded in retrocession to national and foreign institutions.

Group: Recovery of paid claims

i.

Recovery of paid claims.- Amount of the recoveries made in the exercise on the paid claims, and

ii.

Participation of paid claims.- Amount of the participations corresponding to retrocessioners for the recoveries that are made in the exercise derived from retroceded reinsurance. They must have control over the surety bonds ceded from the direct and ceded from the taken.

Group: Fiscal loss to amortize

i.

Fiscal loss to amortize.- Corresponds to the pending part to amortize of the fiscal loss.

Group: Reserve to constitute for labor obligations

i.

Reserve to constitute for labor obligations.- Excess resulting from comparing the current net liability with the projected net liability. In order to recognize the figures relative to each new period, the initial balance of this item must be cancelled at the end of each exercise and, at the same time, if applicable, it will register the excess determined again.

Group: Capital registration accounts

i.

Updated contribution capital.- Capital contributions made by partners or shareholders and their update, and they will be decreased with the capital reductions that are made, in the terms established by the Income Tax Law;

ii.

Subordinated obligations issued.- Amount of the obligations issued, pending placement, and

iii.

Surplus from capitalization of real estate valuation.- Amount of the surplus whose capitalization is carried out based on the respective authorizations granted by the National Commission of Insurance and Sureties.

Group: Registration accounts. Fiscal registration

i.

Asset to depreciate.- For fiscal purposes the pending part to depreciate of depreciable assets;

ii.

Intangible Assets.- For fiscal purposes the pending part to amortize of intangible assets;

iii.

Fiscal update adjustment.- For fiscal purposes the monthly amount of the adjustment or update of technical reserves, in accordance with what is established in the Income Tax Law;

iv.

Fiscal result.- Amount resulting from the combination between accumulative income, deductible items, non-accumulative items and non-deductible items, and

v.

Net fiscal profit to distribute.- Corresponds to the net fiscal profit of each exercise, as well as the dividends received by the institution from other commercial societies resident in Mexico and it is decreased with the amount of dividends or profits that are distributed in cash or in goods, coming from previously registered profits, in the terms established by the Income Tax Law and for the purposes of the withholdings of said tax that are established in that Law.

Group: Registration accounts. Various

i.

Uncollectable accounts.- Amount of Uncollectable Credits that have been written off by the institution, keeping control by branches in those cases that so require;

ii.

Participation of uncollectable accounts by retrocession.- Amount of the participation of surety bonds paid that have been declared uncollectable by retroceded reinsurance. They must have control over the operations by retroceded reinsurance of the direct and of the retroceded reinsurance of the taken;

iii.

Purchase of currency hedges.- Hedges purchased at their equivalent in national currency at the contracted exchange rate;

iv.

Depositories of surety bond policies to be issued.- Amount of the surety bond policy allocations that the surety institution makes to its agents, taking as a base the amount of the policy coverage or by the amount of the current operating margin;

v.

Sanctions to pay .- represent the fines imposed by the National Commission of Insurance and Sureties, pending payment, even for those sanctions that are in the process of resolution by this Commission, or before other authorities, and

vi.

Unspecified diverse concepts.- All those concepts and operations that do not specifically appear in other off-balance sheet accounts, establishing the pertinent classifications for adequate analysis, through the respective sub-accounts.

Group: Operations with derivative products

i.

Acquisition of option contracts.- Notional amount of option contracts;

ii.

Rights and obligations for future operations.- Notional amount of future operations;

iii.

Acquisition of swaps.- Notional amount of Swap Operations, and

iv.

Acquisition of forwards.- Notional amount of Forward Operations.

Group: Operations with securities granted in loan

i.

Goods to receive as guarantee for loan.- Amount of the goods or values delivered as guarantee for the securities loan operation.

Group: Guarantees received for derivatives

i.

Guarantees received.- Amount of guarantees received for derivative operations.

Group: Guarantees received for repo

i.

Guarantees received for repo.- Quotation cost of the securities that are in guarantee for repo.

ii.

Accrued interest not collected derived from overdue Credit portfolio.- corresponds to the control of the accrued interests of the Overdue Credits of the Overdue Portfolio.

Presentation

(2) Off-balance sheet accounts must be presented at the end of the Balance sheet for each Group established in this section.

m)

Premiums (B-13)

(1) This criterion establishes the accounting treatment to which Institutions and Mutual Societies must be subject, for the registration of premiums for insurance and surety contracts.

Accounting registration

(2) Insurance Institutions and Mutual Societies must register in the item that integrates premiums issued by operation and branch, insurance contracts at the moment of their subscription for the total premium of the operation, which will be determined by the previously defined payments, or in the case of insurance in which by their characteristics the insured sum is periodically modified, the registration of the premium must be in accordance with that period, against the item of debtors for insurance premiums and in the case of premiums for retroceded reinsurance, these will be registered in results in the month following their issuance in accordance with the information provided by the ceding company, against the item of insurance institutions.

(3) Likewise, premiums issued in advance must also affect results in the item of premiums issued by operation and branch, at the moment of the subscription of the insurance contracts, considering as premiums issued in advance, the issuance that is made on a date prior to the start date of the policy to which such premium corresponds, in accordance with what is established in Provision 5.2.3. of this Circular.

(4) The premiums issued registered in results are integrated at minimum by the following concepts, according to the operations practiced by Institutions and Mutual Societies:

From the Direct:

i.

First year premiums of direct insurance.- They correspond to first year premiums of direct insurance, of the life operation;

ii.

Renewal premiums of direct insurance.- They correspond to renewal premiums in direct insurance, of the life operation;

iii.

Single premiums of direct insurance.- They correspond to single payment premiums of direct insurance, of the life operation and of insurance contracts that have as a basis pension plans or survival plans derived from social security laws;

iv.

Premiums of direct insurance.- They correspond to premiums of direct insurance of the accident and disease operations and of damages, and

v.

Premiums of direct insurance by subsidy.- They correspond to the premiums that the Federal Government grants by subsidy to support agricultural and animal insurance.

Less:

vi.

Returned single premiums of direct insurance.- They correspond to the return of premiums for improper cases corresponding to pensions that are cancelled as a consequence of a rectification of the social security institutes, IMSS and/or ISSSTE.

From the Taken:

i.

First year premiums of retroceded reinsurance.- They correspond to first year premiums by retroceded reinsurance, of the life operation;

ii.

Renewal premiums of retroceded reinsurance.- They correspond to renewal premiums by retroceded reinsurance, of the life operation;

iii.

Single premiums of retroceded reinsurance.- They correspond to

single payment premiums by

retroceded reinsurance, of the life operation and of insurance contracts that have as a basis pension plans or survival plans derived from social security laws, and

iv.

Primas del reaseguro tomado.- Correspond to

premiums for reinsurance taken, from

accident and health and damage operations.

Less:

v.

Returned single premiums from reinsurance taken.- Correspond to the return of

premiums from the taken side for improper cases corresponding to pensions that are cancelled as a consequence of a rectification by social security institutes, IMSS and/or ISSSTE.

Ceded Premiums

Accounting Registration

(5) Insurance Institutions and Mutual Societies must register in results by operation and line in the item that integrates ceded premiums, at the time of issuance of the insurance contracts, in the percentages agreed upon in the reinsurance contracts, in the case of the ceded premiums from the taken side, the registration will be made the month following the issuance of the contracts, according to the information provided by the cedent, against the item of insurance institutions.

(6) The registration of premiums for reinsurance and surety reinsurance operations relative to proportional contracts and facultative business in any of their placement forms, shall be considered as "ceded premiums" and registered in the corresponding items.

(7) Ceded premiums in results are integrated at a minimum by the following concepts, according to the operations practiced by Institutions and Mutual Societies:

Ceded from the Direct

i.

First-year ceded premiums.- Correspond to direct insurance premiums, ceded in reinsurance, relative to the life operation;

ii.

Renewal ceded premiums.- Result from the renewal of direct insurance premiums, ceded in reinsurance, relative to the life operation;

iii.

Single ceded premiums.- Are single-payment premiums from direct insurance, ceded in reinsurance, relative to the life operation and to insurance contracts that have as their basis pension or survival plans derived from social security laws, and

iv.

Ceded premiums.- Are premiums from direct insurance, ceded in reinsurance, relative to the accident, health and damage operations.

Ceded from the Taken

i.

First-year retroceded premiums.- Correspond to premiums from reinsurance taken, retroceded in reinsurance, relative to the life operation;

ii.

Renewal retroceded premiums.- Result from the renewal of premiums from the reinsurance taken, retroceded in reinsurance, relative to the life operation;

iii.

Single retroceded premiums.- Are single-payment premiums from reinsurance taken, retroceded in reinsurance, relative to the life operation and to insurance contracts that have as their basis pension or survival plans derived from social security laws, and

iv.

Retroceded premiums.- Are premiums from reinsurance taken, retroceded in reinsurance, relative to the accident, health and damage operations.

Surety Premiums

Accounting Registration

(8) Institutions must register in results in the item that integrates sureties issued by surety policies, by line and sub-line, at the time of subscription of the surety contract against the item of premiums to be collected for issued sureties and in the case of re-surety taken, these will be registered in results in the month following their issuance according to the information provided by the cedent, against the item of surety institutions.

(9) Surety premiums in results are integrated at a minimum by the following concepts, according to the lines or sub-lines practiced by Institutions:

Premiums from the Direct

i.

Direct surety premiums.- Correspond to premiums for subscription of direct surety policies from the surety operation.

Less:

ii.

Returned premiums for direct surety.- Are surety premiums returned by the surety institutions.

Premiums from the Taken

i.

Premiums from re-surety taken.- Correspond to premiums for surety policies from re-surety taken.

Less:

ii.

Returned premiums for surety taken.- Are surety premiums returned by the institutions.

Ceded Surety Premiums

(10) Institutions must register in results by line and sub-line in the item that integrates ceded premiums, at the time of subscription of the surety contract and in the case of retroceded premiums in re-surety, in the month following the issuance of the contracts, according to the information provided by the cedent, against the item of surety institutions.

(11) Ceded premiums in results are integrated at a minimum by the following concepts, according to the operations practiced by Institutions:

Ceded from the Direct

i.

Ceded premiums in re-surety.- Correspond to premiums ceded to re-surety providers from the country and abroad for re-surety.

Less:

ii.

Returned premiums for ceded re-surety.- Correspond to premiums for policies of sureties returned in re-surety.

Ceded from the Taken

i.

Retroceded premiums in re-surety.- Correspond to premiums from re-surety taken retroceded in re-surety.

Less:

ii.

Returned premiums for retroceded re-surety.- Correspond to premiums for policies of sureties returned from the taken side for retroceded re-surety.

n)

Costs (B-14)

Acquisition Cost

Objective

(1) The purpose of this criterion is to establish the accounting treatment to which Institutions must be subject for the registration of the acquisition cost for the intermediation of contracts of insurance and sureties, as well as commissions for ceded reinsurance and re-surety and other concepts, in accordance with what is established in articles 91, 92, 93, 94, 101, 102 and 361 section VII of the LISF and 1° and 24 of the Regulation of Insurance and Surety Agents.

Accounting Registration

Acquisition Cost

(2) When it concerns commissions that Institutions grant for the placement of contracts of insurance and sureties in the terms of articles 101 and 102 of the LISF, regardless of their payment form, the total amount of commissions must be recognized directly in results at the moment in which the insurance and surety contracts that give rise to them are registered, against the liability relative to commissions or compensations to accrue and, when premiums have been collected, their allocation to the agents who intervened in the placement of the contracts will be made, in the concepts that for such effect are established in the minimum catalog.

(3) Commissions for premiums and the participation in profits from reinsurance and re-surety taken, must be registered in results in the month in which the information is received, against the corresponding liability in Insurance Institutions, Current Account, under the understanding that the commissions for premiums and the participation in profits from reinsurance and re-surety, at no time may be higher than the ceded premium.

(4) When it concerns any other compensation that Institutions grant for the intermediation of insurance and surety policies, they must be supported with the documentation that accredits their application and in compliance with NIF C-9 of the NIF, they must constitute the corresponding provision, in order to affect the results of the exercise to which their granting corresponds.

(5) The application of commissions in favor of insurance and surety policyholders, will affect their results at the time of issuance of the insurance and surety contracts in which they must specify in the policy and in the corresponding premium receipts, the amount of the reduction of premiums that corresponds to the total or partial application of the cited commissions.

(6) In relation to the cost of non-proportional reinsurance and re-surety coverages, the recognition to results will be carried out monthly from the effective date of the reinsurance contract that gives rise to it according to the cost of the coverage contract, with independence of the payments agreed upon for the concept of minimum premium and deposit, recognition that must be reflected against the liability relative to Insurance Institutions, Current Account. Likewise, in the case that at the end of the coverage period, according to the premiums issued, claim experience and other factors, an adjustment in the cost of the coverage is determined at the expense of Institutions and Mutual Societies, in compliance with NIF C-9 "Provisions, contingencies and commitments" of the NIF, they must constitute the corresponding provision in order to affect the results of the exercise to which the indicated adjustment corresponds.

(7) Likewise, when non-proportional contracts are celebrated that consider in their coverage more than one line, the costs associated with each of the protected lines must be identified, to the effect of reflecting the specific costs of each of them, precisely in the accounting registration.

(8) Similarly, in this type of contract there must be no participation in profits from reinsurance.

(9) Accounting registration of additional benefits of pension insurance derived from the Social Security Laws.- When the Insurance Institution grants additional benefits to basic pensions based on contracts celebrated with other Insurance Institutions, it must register the total amount of the obligation incurred, regardless of its form and term of payment, applying it to its results in the item "Cost of Premiums for Additional Benefits", sub-item "Single Premiums", or, "Payable at Determined Term". The obligation pending payment of these benefits will be registered in the item "Provisions for Additional Benefits", sub-item "Single Premiums" and "Payable at Determined Term", therefore, the total amount of payments to be made or of the total obligation incurred, must be applied to the results of the Insurance Institution on the date when the validity of said benefits begins.

(10) In no case may the application of costs or expenses of additional benefits refer to these criteria be deferred to the results of subsequent exercises.

(11) The concept of other acquisition expenses will refer to all other expenditures for the administration, development, promotion and placement of insurance and surety contracts, which must be registered in results at the moment they are incurred. Likewise, the payments and compensations to legal entities for services other than those that the LISF reserves to insurance agents, must be recognized directly in results at the moment in which the insurance and surety contracts that give rise to them are registered, regardless of their form of payment.

Recovery of Acquisition Cost

(12) Commissions recovered for the concept of ceded premiums in reinsurance and/or re-surety, will be registered in their results at the moment in which the insurance and surety contracts that give rise to them are registered, against their asset accounts in the item of Insurance Institutions, Current Account, which for such effect are established in the minimum catalog.

(13) Commissions on premiums from reinsurance and re-surety taken retroceded, must be registered in results in the month in which the information is received, against the asset corresponding to Insurance Institutions, Current Account.

(14) In reinsurance and re-surety contracts in which the payment of the participation in profits from ceded reinsurance and re-surety has been agreed upon, it must, if applicable, provision monthly said participation against results, provision that must be adjusted quarterly according to the results obtained and the conditions agreed upon in the reinsurance contracts.

(15) In retroceded reinsurance and re-surety contracts, from the taken side in which the payment of the participation in profits from ceded reinsurance and re-surety has been agreed upon, must be registered in the months in which the information is received, according to the results obtained and the conditions agreed upon in the reinsurance contracts, against the asset corresponding to Insurance Institutions, Current Account.

Claim Cost

Objective

(16) The purpose of this criterion is to establish the accounting treatment to which Institutions and Mutual Societies must be subject for the registration of the claim cost and of claims, due to risks and responsibilities they assume for the issuance of insurance and surety contracts, in accordance with what is established in articles 216, 217, 218, 219, 221, 224, 296, 297, 298, 299, 300, 301 and 303 of the LISF.

Accounting Registration

(17) Institutions and Mutual Societies, in accordance with what is established in articles 301 and 303 of the LISF, must register claims, maturities and received claims, as well as recoveries that they maintain for reinsurance and re-surety contracts, directly in results in the item of net claim cost, claims and other contractual obligations in the following sub-items which are indicated at a minimum below against the liability and asset that for such effect are established in the minimum catalog to which Criterion C-1 of this Annex refers.

Net Claim Cost, Claims and Other Contractual Obligations

Claim Experience and Other Contractual Obligations

From Direct Insurance

(18) The claim cost and maturities of direct insurance will be integrated by the following concepts:

The Increase to the reserve for dividends and bonuses on policies, which will be referred to the increases that according to actuarial procedures is determined, in accordance with what is stated in article 342 section XII of the LISF;

The adjustment to the reserve for obligations pending to fulfill for claims occurred and not reported, which corresponds to the gradual increase of the original reserve and the adjustment of the exercise according to the estimation of claims occurred and not reported, in accordance with what is stated in article 217, section II, subsection c) of the LISF;

The adjustment to the reserve of adjustment expenses assigned to claims occurred and not reported, which corresponds to the gradual increase of the initial reserve and the adjustment of the exercise according to the estimation of adjustment expenses assigned to the claim, in accordance with what is stated in article 217, section II, subsection c) of the LISF;

Claims from direct insurance, correspond to claims from direct insurance occurred and reported during the year, in the case of life operations only claims for death will be registered without including additional benefits, likewise, it will include in this concept services for surety guaranteed by those payments of surety premiums when this benefit is expressly contracted in favor of insureds who require it in their opportunity, and bonuses and paid maturities of pensions, as well as quotas and contributions to the individual account of the retirement insurance from the operations of pension insurance derived from social security laws;

Claims for additional benefits from direct insurance, will be referred to claims occurred for additional benefits in life operation;

Annuities from direct insurance, correspond to annuities from direct insurance, payable at determined term or for life annuities due during the year, in the life operation, in which operations of pension insurance derived from social security laws are not included;

Maturities from direct insurance, will be referred to endowments and flexible insurance of direct insurance, matured during the year, of the life operation, in which operations of pension insurance derived from social security laws are not included;

Surrenders from direct insurance, correspond to amounts paid to insureds for the concept of surrender, for cancellation of loans for policy lapse, encumbered, from direct insurance, as well as for flexible insurance and private pensions, in which operations of pension insurance derived from social security laws are not included;

Adjustment expenses of claims from direct insurance. - correspond to all expenditures paid for expenses incurred from direct insurance, derived from adjustments of claims, as well as for expenses incurred in valuation centers;

The participation of salvages for ceded reinsurance, refers to the amount of the salvages of direct insurance in favor of reinsurance institutions, and

Returns of reserves to the Mexican Institute of Social Security (IMSS) or to the Institute of Security and Social Services of State Workers (ISSSTE) for direct insurance, correspond to returns of reserves to IMSS or to ISSSTE caused basically by the events contemplated by the Social Security Law and/or by the Law of the Institute of Security and Social Services of State Workers that give by terminated the payment of basic benefits, as well as changes in family status.

From Taken Insurance

(19) The claim cost and maturities of taken insurance must be registered in results in the month in which the information is received, against the corresponding liability of Insurance Institutions, Current Account and will be integrated by the following concepts:

The adjustment to the reserve for obligations pending to fulfill for claims occurred and not reported by reinsurance taken, corresponds to the gradual increase of the reserve original and the adjustment of the exercise according to the estimation of claims occurred and not reported from reinsurance taken, in accordance with what is stated in article 217, section II, subsection c) of the LISF;

The adjustment to the reserve of adjustment expenses assigned to claims occurred and not reported by reinsurance taken, corresponds to the gradual increase of the initial reserve and the adjustment of the exercise according to the estimation of adjustment expenses assigned to the claim from reinsurance taken, in accordance with what is stated in article 217, section II, subsection c) of the LISF;

Claims from reinsurance and claims from surety for reinsurance and re-surety taken, refers to claims from reinsurance taken occurred during the year. In life operations only claims for death will be registered without including additional benefits; as well as charged claims, both paid as for which liability was constituted;

Claims for additional benefits from reinsurance taken, will be referred to claims occurred for additional benefits in life operation;

Annuities from reinsurance taken, correspond to annuities from reinsurance taken, payable at determined term or for life annuities due during the year, in the life operation, in which operations of pension insurance derived from social security laws are not included;

Maturities from reinsurance taken, will be referred to endowments and flexible insurance of reinsurance taken, matured during the year, in the life operation, in which operations of pension insurance derived from social security laws are not included;

Surrenders from reinsurance taken, correspond to amounts paid to insureds for the concept of surrender, for cancellation of loans for policy lapse, encumbered, from reinsurance taken, as well as for flexible insurance and private pensions from reinsurance taken, in the life operation, in which operations of pension insurance derived from social security laws are not included;

Adjustment expenses of claims from reinsurance taken. - correspond to all expenditures paid for expenses incurred from reinsurance taken, derived from adjustments of claims, as well as for expenses incurred in valuation centers, for reinsurance taken;

The participation of salvages for retroceded reinsurance, refers to the amount of the salvages of reinsurance taken in favor of reinsurance institutions, and

Returns of reserves to the Mexican Institute of Social Security (IMSS) or to the Institute of Security and Social Services of State Workers (ISSSTE) for reinsurance taken, correspond to returns of reserves to IMSS or to ISSSTE caused basically by the events contemplated by the Social Security Law and/or by the Law of the Institute of Security and Social Services of State Workers that give by terminated the payment of basic benefits, as well as changes in family status, for reinsurance taken.

Recovery of Claims, Maturities and Claims

For Ceded Reinsurance

(20) The recovery of the claim cost and maturities for ceded reinsurance will be integrated by the following concepts:

Claims recovered by ceded reinsurance, correspond to claims recovered by ceded reinsurance, from direct insurance;

Claims for additional benefits recovered by ceded reinsurance, correspond to claims for additional benefits recovered by ceded reinsurance, from direct insurance. For pensions the registration will be made according to the applicable administrative provisions;

Life annuities recovered by ceded reinsurance, represent the amounts recoverable of life annuities by ceded reinsurance, from direct insurance;

Matured endowments recovered by ceded reinsurance, represent the amounts recoverable of matured endowments by ceded reinsurance, from direct insurance;

Surrenders recovered by ceded reinsurance, represent the amounts recoverable of surrenders by ceded reinsurance, from direct insurance;

Adjustment expenses of claims recovered by ceded reinsurance, represent the recoverable amounts for adjustment expenses of claims, by ceded reinsurance, from direct insurance, and

Salvages from direct insurance, represent the amount of salvages obtained from direct insurance.

For Reinsurance Taken

(21) The recovery of the claim cost and maturities for reinsurance taken will be integrated by the following concepts:

Claims recovered by retroceded reinsurance, correspond to claims recovered by retroceded reinsurance, from reinsurance taken;

Claims for additional benefits recovered by retroceded reinsurance, correspond to claims for additional benefits recovered by retroceded reinsurance, from reinsurance taken;

Life annuities recovered by reinsurance, represent the amounts recoverable by retroceded reinsurance from reinsurance taken;

Matured endowments recovered by retroceded reinsurance, represent the amounts recoverable of matured endowments by retroceded reinsurance, from reinsurance taken;

Surrenders recovered by retroceded reinsurance, represent the amounts recoverable of surrenders by retroceded reinsurance, from reinsurance taken;

The expenses for adjustment of claims recovered by retroceded reinsurance represent the recoverable amounts for claim adjustment expenses, by retroceded reinsurance, of the taken reinsurance;

The salvages of the taken reinsurance represent the amounts of salvages obtained from the taken reinsurance;

The recoveries of claims by copayments represent the recoverable amounts charged to insureds, in the operation of accidents and illnesses in the lines of medical expenses and health, and

The recoveries of third-party claims represent the amounts of recoveries made from third parties, of the direct insurance claims.

Recovered Claim Ratio of Non-Proportional Reinsurance

By direct insurance

(22) The recovery of the cost of claims and maturities by taken reinsurance shall be recorded in results in the month in which the information is received, against the corresponding asset of Insurance Institutions, Current Account and will be integrated by the following concepts:

The claims recovered from non-proportional reinsurance coverage represent the recoverable amounts for excess loss coverage of direct insurance by claims and additional benefits.

By taken reinsurance

(23) The claims recovered from non-proportional reinsurance coverage by direct insurance will be integrated by the following concepts:

The claims recovered from non-proportional reinsurance coverage by taken reinsurance represent the recoverable amounts for excess loss coverage of the taken reinsurance by claims and additional benefits.

Net Cost of Claims

Claims

By direct sureties

(24) The concept of claims by direct sureties will be integrated by the following concepts:

The claims by direct sureties correspond to the claims written off, both paid and on which a liability was established, in accordance with the applicable provisions, in relation to the procedure applicable to debtors by surety liabilities;

The participation of recoveries from retrocessionaires corresponds to the recoverable amounts from retrocessionaires for claims paid, by direct retrocession;

The expenditures for payment of claims, by direct retrocession, refers to the payments for claims originating for tax purposes, the amount relative to this concept shall correspond to what is registered in the concept of recoveries to be made on paid claims;

The paid guaranteed claims, of the ceded retrocession, represent the amounts of the guaranteed liabilities corresponding to the ceded retrocession, for which the right to collect is recognized, in accordance with the applicable provisions, in relation to the procedure applicable to debtors by surety liabilities, of the direct retrocession, and

The provision for the payment of dividends on policies represent the provisions for the payment of dividends in suretyship operations, provided that there is authorization from the National Commission of Insurance and Sureties for such effect.

By taken retrocession

(25) The claims recovered from non-proportional reinsurance coverage by taken reinsurance shall be recorded in results in the month in which the information is received, against the corresponding asset of Insurance Institutions, Current Account and will be integrated by the following concepts:

The claims of the reinsurance and claims of retrocession by reinsurance and taken retrocession, refers to the claims of the taken reinsurance occurred during the year, by claims written off, both paid and for which a liability was established;

The participation of claims to retrocessionaires by taken retrocession, corresponds to the recoverable amounts from retrocessionaires for claims paid, by taken retrocession;

The expenditures for payment of claims, by taken retrocession, refers to the payments for claims originating for tax purposes by taken retrocession, the amount relative to this concept shall correspond to what is registered in the concept of recoveries to be made on paid claims, by taken retrocession, and

The paid guaranteed claims, of the taken retrocession, represent the amounts of the guaranteed liabilities corresponding to the retroceded suretyship, for which the right to collect is recognized, in accordance with the applicable provisions, in relation to the procedure applicable to debtors by surety liabilities, of the taken retrocession.

Recovery of claims

By ceded retrocession

(26) The concept of recovery of claims by ceded retrocession will be integrated by the following concepts:

Participation of claims to retrocessionaires, represent the participation of claims charged to other institutions derived from ceded retrocession;

The recovery, corresponds to the amounts of the recoveries made of the claims written off in previous years, by direct sureties;

The release of the surety contingency reserve, corresponds to the release of the contingency reserve in the terms indicated in article 222, fraction II, in relation to article 220 of the LISF;

The recoveries to be made on paid claims, by direct retrocession, refers to the payments for claims originating, for tax purposes, the amount registered in this concept shall correspond to what is registered in the concept of expenditures for payment of claims, and

The paid guaranteed claims, by direct sureties, correspond to the amounts of the guaranteed liabilities corresponding to the direct sureties, for which the right to collect is recognized, in accordance with the criteria of this Circular, regarding debtors by surety liabilities.

By taken retrocession

(27) The claims by taken retrocession shall be recorded in results in the month in which the information is received, against the corresponding liability of Surety Institutions, Current Account and will be integrated by the following concepts:

The participation of claims to retrocessionaires, by taken retrocession, represent the participation of claims charged to other institutions derived from retroceded suretyship;

The recovery, by taken retrocession, corresponds to the amounts of the recoveries made of the claims written off in previous years, by taken retrocession;

The disposition of the surety reserves in force and contingency, by taken retrocession, corresponds to the amounts disposed of the Surety Reserves in Force and contingency, in the terms indicated in article 222, fraction II, in relation to articles 220 and 223 of the LISF;

The recoveries to be made on paid claims, by taken retrocession, refers to the payments for claims originating, for tax purposes, the amount registered in this concept shall correspond to what is registered in the concept of expenditures for payment of claims, by taken retrocession, and

The paid guaranteed claims, by taken retrocession, correspond to the amounts of the guaranteed liabilities corresponding to the sureties of the taken retrocession, for which the right to collect is recognized, in accordance with the criteria of this Circular, regarding debtors by surety liabilities.

Recovered Claims from Reinsurance and Non-Proportional Suretyship

(28) The recovery of claims by taken retrocession shall be recorded in results in the month in which the information is received, against the corresponding asset of Surety Institutions, Current Account and will be integrated by the following concepts:

The recovery of institutions for non-proportional suretyship coverage, by direct suretyship, corresponds to the amounts of the recoveries derived from non-proportional suretyship contracts celebrated by the institutions, and

The recovery of institutions for non-proportional suretyship coverage, by taken retrocession, corresponds to the amounts of the recoveries derived from non-proportional suretyship contracts, by taken retrocession, celebrated by the Institutions.

Presentation

(29) According to the formats of the financial statements established in Series III. Criteria relating to the basic consolidated financial statements of the CUSF, the amounts of claims and claims that Insurance and Mutual Insurance Companies register shall be presented in the statement of results in the item of Net Cost of Claims, Claims and Other Contractual Obligations.

o)

Adjudicated Assets (B-15)

Objective and scope

(1) It is not the object of this criterion the treatment of assets that Institutions acquire and are destined for their use, since for this type of assets the guidelines provided in the accounting criteria applicable to the type of asset in question will apply.

Recognition standards

(2) When an Institution receives in payment of debts or by adjudication at auction within lawsuits related to Credits in its favor, or when exercising the rights conferred by the operations it celebrates in accordance with the LISF, assets, rights, titles or securities, which it should not keep in its assets, it must sell them within a period of one year from their acquisition, when they are titles or movable goods; of two years when they are urban real estate; and of three years when they are commercial or industrial establishments, or rural real estate.

These deadlines may be renewed by the Commission when it is impossible to effect their sale promptly without great loss to the Institution.

(3) Upon expiration of the deadlines or, in their case, the renewals granted from them, the Commission will administratively put up for auction the assets, rights, titles or securities that have not been sold;

Valuation standards

(4) The assets acquired through judicial adjudication shall be registered on the date on which the approving order of the auction through which the adjudication was decreed becomes final.

(5) The assets that have been received through dation in payment shall be registered, on their part, on the date on which the deed of dation is signed, or on the date on which formalities were given to the transmission of the property of the asset.

(6) The recognition value of the Adjudicated Assets will be equal to its Adjudication Value minus the costs and expenses strictly indispensable that are incurred in their adjudication.

(7) When the value of the asset that gave rise to the adjudication is higher than the value of the adjudicated asset, the difference shall be recognized in the results of the exercise as other expenses of the operation.

(8) When the value of the asset that gave rise to the adjudication net of estimates is lower than the value of the adjudicated asset, the value of the latter shall be adjusted to the net value of the asset.

(9) At the time of the sale of the Adjudicated Assets, the difference between the sale price and the Book Value of the adjudicated asset, net of estimates, shall be recognized in the results of the exercise as other income (expenses) of the operation.

Transfer of the adjudicated asset for use

(10) When opting to transfer the adjudicated assets for use by the entity, such transfer may be made at its adjudication value in the item of the Balance Sheet that corresponds to it according to the asset in question, provided that it is fulfilled that the assets are used for the realization of its object and is carried out in accordance with the investment strategies and purposes of the entity that are previously established in its manuals, there being no possibility that said assets can again be considered as adjudicated.

Presentation standards

Statement of results

(11) The result from the sale of Adjudicated Assets, the adjustments to their value, as well as the constitution and adjustment to the respective estimate, shall be presented in the item of other income (expenses) of the operation, as appropriate.

(12) The loss from adjudication of assets shall be presented in the item of other income (expenses) of the operation.

p)

Derivative financial instruments and hedging operations (B-16)

(1) For the accounting recording of Financial Derivative Operations, they must adhere to what is indicated in the minimum catalog referred to in Criterion C-1 of this Annex, to criterion B-2 of these Provisions, as well as what is provided in NIF C-10 "Derivative Financial Instruments and Hedging Relationships" of the Financial Information Standards issued by the CINIF, provided that this is not contrary to what is established in the LISF and in the administrative provisions emanating from it.

(2) With the purpose of reducing the risk exposure of Institutions and Mutual Societies, and as stated in Provision 8.4.1 fraction II, the Financial Derivative Operations they carry out may be carried out solely and exclusively for hedging purposes. In this sense, all operations with derivative products must be linked to assets affected by the coverage of the Investment Base or that back Admissible Own Funds. In this way, if in a medium or long-term scenario, said assets had to be sold, the derivative products that covered them must be canceled or linked to a new instrument that requires this coverage.

The support staff of the Institution or Mutual Society must reconcile daily the confirmations and account statements issued by intermediaries, with the records of the operators of these products, in order to validate the information that will be accounted for; likewise, they must have auxiliary records in order to clearly identify the Financial Derivative Operations;

Support staff must verify their records daily with those of the operators and compare both databases with accounting;

The operations described above that Institutions and Mutual Societies carry out must adhere to the conditions to consider an instrument as a hedge, in accordance with the Financial Information Standard (NIF) issued by the CINIF for this effect and must be accounted for in accordance with what is provided in the last paragraph of this criterion;

The settlements required in the operation with derivative products must be carried out by support staff under authorized instructions and verified amounts, and

For the recording operations of derivatives, a detailed control must be kept through auxiliaries for each of the concepts that affect them.

q)

Effects of inflation (B-17)

(1) Institutions and Mutual Societies must adhere to the guidelines established in NIF B-10, provided that they do not oppose the accounting criteria indicated in the following paragraphs.

(2) When the economic environment is classified as non-inflationary, Institutions and Mutual Societies must appraise their real estate at least once a year, in accordance with what is provided in Chapter 8.5 of these Provisions, although the effects of inflation will not be recognized for the period in which they are in effect, until a new appraisal is carried out; the increase determined between the difference of the last reexpression against the appraisals, shall be registered in the item "Increase by Valuation of Real Estate" of the asset, against the item "Surplus by Valuation of Real Estate" of the equity capital.

(3) In the case of an inflationary environment based on what is stated by NIF B-10, Institutions and Mutual Societies must reveal the initial balance of the main monetary assets and liabilities that were used for the determination of the monetary position of the period, differentiating, if applicable, those that affect or do not affect the financial margin.

(4) Likewise, they must use the value of the Investment Unit (UDI) as a price index.

(5) Institutions and Mutual Societies, to adequately reflect the effects of inflation, must consider as non-monetary items the items indicated in the following paragraph and their updating procedure will be carried out as mentioned below.

(6) The following summarizes the main items or non-monetary items: (i) Real Estate, accumulated depreciation and depreciation of the period; (ii) Reserve for Risks in Course; (iii) Recoverable Amounts from Reinsurers; (iv) Reserve for Catastrophic Risks; (v) Contingency Reserve; (vi) Participation of Retrocessionaires in the Contingency Reserve; (vii) Reserves for Labor Obligations, and (vii) Equity Capital.

Real Estate

(7) Institutions and Mutual Societies must carry out appraisals at least once a year, in accordance with applicable provisions. In the subsequent months until the date on which a new appraisal must be presented, for reexpression purposes, the value of the last appraisal carried out will be considered as the base figure.

(8) In the case that Institutions and Mutual Societies during the non-inflationary economic environment have registered surplus of real estate, determined by the difference between the last reexpression and the appraisals that are carried out, the balance reported by the item "Surplus by Valuation of Real Estate" shall be considered in the adjustment that is determined to recognize the accumulated effects of the inflation that existed during all periods in which there was a non-inflationary environment;

Depreciation

(9) The determination of the depreciation of the exercise, as well as of the accumulated depreciation, must be based both on the updated value of the real estate and on its probable life, determined by technical estimates. To allow adequate comparison, the depreciation system used for updated values and for costs must be congruent, that is, the rates, procedures and probable lives will be the same.

(10) For the determination of the depreciation of the period, the updated value must be taken as a basis.

(11) The profits of previous exercises will not be affected by the update of the accumulated depreciation, even if it implies the correction to the estimated life;

Technical Reserves and Reserves for Labor Obligations

i.

Balance Sheet Accounts

(12) The assets and liabilities that are generated by the concept of Technical Reserves and the Non-Monetary Reserve for Labor Obligations mentioned in this Criterion, will be determined under the actuarial valuation procedures and the administrative provisions contained in this Circular, with the technical support of the respective actuarial reports.

(13) In view of the fact that these reserves, at the date of the financial statements, are valued in constant pesos, it is not necessary to make any adjustment for reexpression, and

ii.

Income Statement Accounts

(14) The increase registered in results must contemplate the reexpression adjustment, as follows:

(15) The reexpression adjustment in the statement of results relative to the net increase of the reserves in question, will be determined by applying to the balance of the same, at the beginning of the year or period, the adjustment factor obtained by subtracting the unit from the quotient resulting from dividing the value of the UDI of the date of the financial statements, by the UDI at the date of closing of the previous year or period.

(16) The adjustment determined in accordance with the above, will be registered with a charge to the temporary account (Correction by Reexpression), and the monetary effect that results in results, in the account of increase of each of the reserves.

Equity Capital

(17) To update the initial balances of the different items of equity capital, it will be necessary to decompose each of the lines by age of contributions and retention of profits, applying to each the factors derived from the UDI, which correspond to the exercise in which they originated;

Accounting recording

(18) The accounting recording of the effects of inflation in financial information must be carried out in separate sub-items, using the same numbers and names of the items contained in the minimum catalog referred to in Criterion C-1 of this Annex, identifying them through some key or device that allows preparing a trial balance that comprises exclusively the sub-items that are updated, which must be consolidated with the balance of historical figures, to generate a balance of reexpressed figures.

r)

Claims (B-18)

(1) Institutions that operate Sureties in accordance with what is stated in article 303 of the LISF must keep the record of the claims they receive from the beneficiaries of the issued policies up to date. This record will be the basis for following up on the deadlines regarding the integration of the claim, for the payment of the claimed amount.

(2) Institutions that operate Sureties must invariably enter in their accounting, in the off-balance sheet items "Claims Received" and "Claims Pending Verification", the amounts that beneficiaries claim and must be reflected in accounting on the same day they are presented.

(3) In the case that the claimed amount increases to such an extent that it exceeds the secured amount according to the respective policy, what is established in paragraphs 10 and 11 of this Criterion must be observed.

(4) Any claim that does not meet the integration requirements specified in fraction VIII of provision 4.2.8 of this Circular, will be registered preventively in the item "Contingent Claims", in the sub-item "Claims Pending Integration", strictly adhering to what is indicated in the first paragraph of paragraph 3 of this Criterion. Claims registered in the sub-item "Claims Pending Integration" will not count for the calculation of the solvency capital requirement.

(5) In accordance with the accounting recording indicated in this Provision, Institutions that operate Sureties must adequately affect the sub-items provided in the minimum catalog, in order to clearly and reliably distinguish the origin and state of the respective claim; whether by the receipt of integrated and pending integration claims, claims in litigation and contingencies in litigation.

(6) In accordance with what is provided by article 279 of the LISF, Institutions that operate

Sureties shall have a period of fifteen (15) natural days, counted from the date of receipt of the claim, to request from the beneficiary the information or documentation necessary related to the surety that is the subject of the claim; in this case, the beneficiary has fifteen (15) natural days, counted from the date of receipt of the respective request, to provide the required documentation and information, and if they fail to do so within said term, the claim shall be deemed integrated. Likewise, if the Institutions operating Sureties do not make use of the right referred to in this paragraph, the beneficiary's claim shall be deemed integrated, and they must reclassify the accounting record previously made in the item "Contingent Claims", sub-item "Claims Pending Integration", transferring it to the item "Received Claims".

(7) Under the terms of the preceding paragraph, when the claim is duly integrated, the Institutions operating Sureties shall have a period of up to 30 natural days, counted from the date the claim was integrated, to proceed with its payment or, in its case, to communicate in writing to the beneficiary the reasons, causes, or grounds for its total or partial impropriety.

(8) The deadlines set forth in this provision shall be considered for the purpose of constituting a liability against the results of the Institutions operating Sureties for the claims received, in accordance with what is indicated in Article 298 of the LISF and Criterion B-7 Debtors, "Debtors by Surety Responsibilities". The recording of the aforementioned liability shall be made independently of the permanence of the record of the received claim in off-balance sheet accounts.

(9) When, for judicial or extrajudicial causes, the Institutions operating Sureties have knowledge and certainty of the enforceability of payment of amounts exceeding the secured amount, they must also record the aforementioned liability for the corresponding higher amount.

(10) In order to maintain control and follow-up of received claims at all times, in addition to their accounting recording, the Institutions operating Sureties must have claim files, which must contain the minimum data expressed in fraction VIII of provision 4.2.8 of this Circular, and the result of the respective evaluation, as well as the payment dates or declaration of impropriety, as applicable, backed by the pertinent supporting documentation.

(11) When there are disagreements on the part of the beneficiaries as a result of the evaluations that result in the impropriety or partial propriety of the received claims, such circumstances must also form part of the file mentioned in this Provision, and in general, they must conserve the documentation of all negotiations carried out between the involved parties.

(12) For the case of received claims determined as proper, the Institutions operating Sureties must make the payment to the beneficiary within the term established in fraction I of Article 279 of the LISF. Once the respective payment is made, the record of the off-balance sheet account "Received Claims" will be cancelled, adhering to Criterion B-7 Debtors, "Debtors by Surety Responsibilities" for the recording of paid claims.

(13) If the Institutions operating Sureties resolve the received claim as improper, they must cancel the record in the respective off-balance sheet accounts, and in this case, they must have at least the acknowledgment or received stamp from the beneficiary of the document where the Institution communicates to them the reasons, causes, or grounds for its impropriety.

(14) Claims that are determined as totally or partially improper during the exercise, under the terms of the preceding paragraph, must be registered in the off-balance sheet account "Cancelled Claims of the Exercise" and the corresponding cancellation for the participation of reinsurers in the item "Participation of Cancelled Claims".

(15) The Institutions operating Sureties may determine the partial propriety of the received claim, and must have the elements that justify the amount determined as proper. In this case, they must make the payment to the beneficiary in accordance with what is established by fraction II of Article 279 of the LISF, cancelling the record in the off-balance sheet accounts of received claims for the amount covered to the beneficiary. As for the remainder, it must remain in the off-balance sheet accounts of received claims, with the Institutions operating Sureties having to have at least the acknowledgment or received stamp of the payment made to the beneficiary in order to cancel said amount.

(16) If within 45 business days counted from the receipt of the claims, the Institution operating the Surety has not notified the beneficiary of its impropriety in accordance with what is provided in Article 279 of the LISF, it must create a liability against results for the claimed amount. The aforementioned record must also be made at the moment of determining the propriety of payment of the sureties, except in those cases that are in litigation. Independently of the previous procedure, the Commission may order the constitution of liabilities against results in those claims that so warrant;

(17) When there is disagreement on the part of the beneficiary regarding the impropriety or partial propriety determined by the Institutions operating Sureties and they have gone before CONDUSEF, submitting to its conciliation, arbitration, or before the competent courts, the registration procedure to be followed will be the following:

The amount registered in the off-balance sheet account "Received Claims" shall not be modified until the arbitration or lawsuit is resolved by a resolution that has become final;

If the arbitral or judicial resolution on the impropriety or partial propriety is against the Institutions operating Sureties, they must make the payment adhering to what is provided in Article 279 of the LISF, as well as to what is provided in Criterion B-7 "Debtors", in the section on Debtors by Surety Responsibilities, and

In the case of resolution in favor of the Institutions operating Sureties on the dismissal of improper claims, the total amount registered in the off-balance sheet account "Received Claims" must be cancelled. In the case of partial propriety, in addition to this cancellation, the Institutions operating Sureties will make the respective payment adhering to what is established in item 5 of this Criterion.

(18) Regarding claims made through judicial or administrative authorities, they must be registered accounting-wise as integrated claims, in the item "Received Claims".

(19) Likewise, the Institutions operating Sureties must report quarterly to the Commission on the claims registered in the aforementioned item "Received Claims", under the terms indicated in the regulatory report RR-7.

Surety Institutions must report to the Commission, through Format I indicated in this provision, the initial balance, the increases and decreases, and the final balance of all sub-items that make up the balance of the item Received Claims.

Surety Institutions must send to the Commission, in Format II indicated in this provision, a detailed report of the claims of highest amount at the institution's charge, in descending order of amount, which together represent at least 80% of the balance of the item Received Claims.

In order for Surety Institutions to comply with the electronic delivery of Formats I and II of this provision, the following instructions for their completion are made known:

I.

Received claims related to sureties issued without recovery guarantees, for information purposes, will only use the columns named "RAMO", "SUBRAMO" and "Balance of claims of the month being reported", to report the total balance corresponding to each sub-item without identifying the name of the sureties, in the case that such claims are part of the 80% of the balance of the item Received Claims.

II.

In the column named "No. Surety", the number of the surety and, if applicable, the inclusion or item must be noted.

III.

In the column of recovery guarantees, in the one related to "Type*", the letter or letters that identify the total of the guarantees with which each claim counts, according to the types of guarantee keys described in Format III of this provision, will be noted, and in the "Amount" column, the global sum of said guarantees.

IV.

The initial balance registered in the column named "Balance of claims of the month immediately preceding the one being reported (1)", must coincide with the balance reported in the immediately preceding month in the column of "Balance of claims of the month being reported (1+2-3)", in order for those surety institutions to inform this Commission, if applicable, of the causes that originated the decrease of such claims. Likewise, they must include the claims that are necessary to represent at least 80% of the balance of the item Received Claims of the month being reported, which if they are not part of the previous month's report, must be presented in the column of "Increases of claims (1)", notwithstanding that in the records of those surety institutions they report balances in the immediately preceding month, so they must not use the aforementioned column "Balance of claims of the month immediately preceding the one being reported (1)", when it comes to claims that are being registered in the report of the month in question.

V.

In that sense, the sum of each of the lines that make up the "Balance of claims of the month being reported (1+2-3)", together, must sum at least 80% of the balance of the item Received Claims, corresponding to the month being reported.

Format I

RECEIVED CLAIMS GLOBAL

AMOUNTS AT _____ OF ____________________ 20__

SUBACCOUNT / Name of Surety

Balance of claims of the month immediately preceding the one being reported (1)

Movements of claims received in the month

Balance of claims of the month being reported (1+2-3)

Increases of claims (2)

Decreases of claims (3)

RECEIVED CLAIMS

Receipt of Claims. Of the Exercise, by Direct Sureties

Receipt of Claims. Of Previous Years, by Direct Sureties

Receipt of Claims. Of the Exercise, by Reinsurance Taken from the Country

Receipt of Claims. Of Previous Years, by Reinsurance Taken from the Country

Receipt of Claims. Of the Exercise, by Reinsurance Taken from Abroad

Receipt of Claims. Of Previous Years, by Reinsurance Taken from Abroad

Claims in Litigation. Of the Exercise, by Direct Sureties

Claims in Litigation. Of Previous Years, by Direct Sureties

Claims in Litigation. Of the Exercise, by Reinsurance Taken from the Country.

Claims in Litigation. Of Previous Years, by Reinsurance Taken from the Country

Claims in Litigation. Of the Exercise, by Reinsurance Taken from Abroad

Claims in Litigation. Of Previous Years, by Reinsurance from Abroad

TOTAL

Format II

NATIONAL INSURANCE AND SURETY COMMISSION

RECEIVED CLAIMS DETAILED

AMOUNTS AT _____ OF ____________________ of 20__

SUB-ITEM/Name of Surety

No. Claim

Date Claim

dd/mm/yyyy

No. Surety

Name of Beneficiary

RAMO

SUB-RAMO

Amount of surety responsibility

Recovery Guarantees

Balance of claims of the month immediately preceding the one being reported (1)

Movements of claims received in the month

Balance of claims of the month being reported (1+2-3)

Amount

Type *

Increases of claims (2)

Decreases of claims (3)

Concept of decrease**

(I, P, D,T, S, O)

RECEIVED CLAIMS

Receipt of Claims. Of the Exercise, by Direct Sureties

(Detail of each of the claims)

Subtotal

Receipt of Claims. Of Previous Years, by Direct Sureties

(Detail of each of the claims)

Subtotal

Receipt of Claims. Of the Exercise, by Reinsurance Taken from the Country

(Detail of each of the claims)

Subtotal

Receipt of Claims. Of Previous Years, by Reinsurance Taken from the Country

(Detail of each of the claims)

Subtotal

Receipt of Claims. Of the Exercise, by Reinsurance Taken from Abroad

(Detail of each of the claims)

Subtotal

Receipt of Claims. Of Previous Years, by Reinsurance Taken from Abroad

(Detail of each of the claims)

Subtotal

Claims in Litigation. Of the Exercise, by Direct Sureties

(Detail of each of the claims)

Subtotal

Claims in Litigation. Of Previous Years, by Direct Sureties

(Detail of each of the claims)

Subtotal

Claims in Litigation. Of the Exercise, by Reinsurance Taken from the Country.

(Detail of each of the claims)

Subtotal

Claims in Litigation. Of Previous Years, by Reinsurance Taken from the Country

(Detail of each of the claims)

Subtotal

Claims in Litigation. Of the Exercise, by Reinsurance Taken from Abroad

(Detail of each of the claims)

Subtotal

Claims in Litigation. Of Previous Years, by Reinsurance from Abroad

(Detail of each of the claims)

Subtotal

TOTAL

• Type of guarantees: Indicate the key corresponding to the type of guarantee, according to the attached relationship.

** Concepts of decrease of claims:

I = Claim declared improper by the surety institution,

P = Claim paid,

D = Withdrawal by the beneficiary,

T = Transfer between sub-items,

S = Cancellation of claims by resolution issued by competent authority in favor of the surety,

and

O = Other causes

In the case of decreases of claims originated by multiple concepts, the various letters corresponding to said concepts must be noted.

FORMAT III

NATIONAL INSURANCE AND SURETY COMMISSION

RECEIVED CLAIMS DETAILED

TYPES OF GUARANTEES

KEY

CONCEPT

A

Pledge consisting of cash, securities issued or guaranteed by the Federal Government or securities issued by credit institutions with "Superior or Excellent" rating.

A1

Risk coverage for compliance that development banks grant directly or through a trust.

B

Pledge consisting of securities issued by credit institutions with "Good and Adequate" rating.

C

Pledge consisting of securities issued by credit institutions with a rating lower than "Adequate".

D

Pledge consisting of deposits in credit institutions.

E

Pledge consisting of loans and credits in credit institutions.

F

Letter of credit from Mexican Credit Institutions.

G

"Stand By" Letter of Credit or Letter of credit from Foreign Credit Institutions with "Superior or Excellent" rating.

H

"Stand By" Letter of Credit or Letter of credit from Foreign Credit Institutions with "Good or Adequate" rating.

I

"Stand By" Letter of Credit or Letter of credit from Foreign Credit Institutions with a rating lower than "Adequate".

J

Counter-surety from Mexican Surety Institutions or from Institutions from Abroad that are registered with the Ministry of Finance and Public Credit in the "General Register of Foreign Reinsurers to take Reinsurance and Re-surety from the Country".

K

Joint Management of Bank Accounts.

L

Trusts celebrated on securities approved by the National Banking and Securities Commission as investment objects.

M

Pledge consisting of securities approved as investment objects by the National Banking and Securities Commission.

N

Mortgage.

Ñ

Encumbrance in Guarantee.

O

Trusts celebrated on real estate given in guarantee.

P

Indemnity contract from a foreign company with "Good, Excellent or Superior" rating.

Q

Joint obligation of a Mexican company rated by an international rating agency.

R

Trusts celebrated on other securities not approved by the National Banking and Securities Commission.

S

Pledge consisting of other securities not approved by the National Banking and Securities Commission.

T

Trusts celebrated on movable goods.

U

Pledge consisting of movable goods.

V

Proven solvency.

W

Ratification of signatures.

X

Signature of joint obligor, natural person with a verified patrimonial relationship.

(20) For claims related to sureties subject to resolution by controversy raised between the surety and the respective beneficiary, whether they are fidelity sureties, judicial (criminal and non-criminal), administrative (fiscal and non-fiscal), or Credit sureties, they will be registered accounting-wise in the item "Contingent Claims", identifying them as "Contingencies in Litigation" and those applicable to "Contingencies in Litigation in Public Works Contracts", according to the minimum catalog, provided that the Institution has knowledge and proof of litigation between the parties in controversy.

(21) When the amount originally claimed as principal, according to item k) fraction VIII of provision 4.2.8. of this Circular, increases as a consequence of the judicial or extrajudicial management carried out by the beneficiary and that amount exceeds the responsibility assumed in the corresponding policy, the excess over the amount covered by the surety must be accounted for in the account "Contingent Claims", under the sub-account "Contingencies by Claims Higher than the Secured Amount", independently of the record made in accordance with item 2 of this Criterion, and the records must be kept until the total termination of the claim process.

(22) It shall be the obligation of the Institutions operating Sureties to make known to the beneficiaries, through the clauses of their policies and contracts in the part relative to claims, the minimum requirements indicated in item k) fraction VIII of provision 4.2.8. of this Circular, in order for the claim writings to be duly presented before the Surety Institutions.

s)

Salvages (B-19)

Objective and scope

(1) This section contains the particular rules relative to the recognition, valuation, presentation, and disclosure in the financial statements of salvages, understanding by these, the goods that, after a loss occurs, report an estimated recovery value.

Recording, valuation, and presentation rules

(2) The good or goods that are recovered or acquired by Insurance Institutions by concept of salvages whose value is determined by an appraiser in the matter in question, or in its case, by the price agreed between the Insurance Institution and the Insured or the beneficiary, will be registered as an asset in the item of inventory of salvages to be realized against results by operation and corresponding branch in the item of recovery of losses, maturities, and claims, according to the minimum catalog of this Circular, at the moment the Institution knows of the existence of the salvage, has the corresponding contractual evidence or, in its case, when the salvage is recovered on a date subsequent to the settlement according to the value determined by the appraiser in the matter in question.

(3) In case that it is about salvages pending to be realized by reinsurance taken, they must be registered in the asset in the item of salvages pending sale by reinsurance taken against results in the sub-item of recovery of losses, maturities, and claims, according to the minimum catalog, of this Annex;

(4) Likewise, when the direct insurance has been ceded and the reinsurance taken has been retroceded, the amounts of the salvages pending sale in favor of Insurance Institutions and reinsurers, the liability by concept of salvages pending sale against results must be registered in the sub-item of losses, maturities, and claims according to the minimum catalog of this Annex.

t)

Procedure for the proration of income and expenses (B-20)

(1) This section defines the criterion relative to the proration of income and expenses.

(2) For the purpose of recording income and expenditure operations that are not of direct allocation, it will be made in the sub-item determined by the Institution, which will not be part of the information delivered to the Commission, which with the application of the proration procedures, will affect the corresponding sub-items, therefore, at the close of each month the balance of the sub-item that has been designated must be "zero".

(3) For the control and verification of the applications made in accordance with what is described in the preceding paragraph, they must adhere to the Provisions contained in Chapter 22.3 of these Provisions.

u)

Analogous and related operations (B-21)

Objective

(1) This section contains the accounting recording, presentation, and disclosure criteria in the financial statements of analogous and related operations carried out by Institutions and Mutual Societies.

Recording and presentation rules

(2) The income obtained and the expenses incurred for the provision of services by analogous and related operations must be registered in the concept of expenses for analogous and related services, which for such effect are established in the minimum catalog of this provision.

(3) Therefore, the concepts of income from the administration of related services, income from related services, and the expenses incurred for the provision of analogous and related services, must be part of the item of Results of Analogous and Related Operations.

(4) In relation to loss administration, expenses for losses occurred and adjustment expenses at the charge of third parties that correspond to contracts celebrated under the terms of Article 118 fraction XXVI, of the LISF, as well as their recovery, will be registered in the item of Net Operating Expenses.

v)

On the accounting recording of premiums of short-term endowment insurance plans and flexible insurance plans (B-22)

(1) The premiums of short-term endowment plans will be registered provided that it is an income coming from a contribution of the insured and, at its maturity, in case of remaining within the Institution or Mutual Society, it will be in a fund of

management of dividends and maturities, and not as a premium through the purchase of a new endowment at short term, whatever the term may be, and

(2) In flexible plans, contributions made by insureds to their policies shall be recorded as premiums, and not the partial withdrawals taken from the reserve for the payment of monthly term insurance.

w)

Leases (B-23)

Scope

(1) For the purposes of Articles 135, 159, 300, 304, 305, and 342, fraction XII of the LISF:

(2) Institutions and Mutual Societies shall adhere to what is indicated in NIF D-5 "Leases", in the valuation, presentation, and disclosure of such operations, considering the following exceptions:

Financial Leases

For the purposes of what is established in paragraph 42.1.4 item c) and item d) of NIF D-5, it shall be understood that the lease term covers most of the economic life of the underlying asset, if such lease covers at least 75% of its useful life. Likewise, the present value of lease payments is substantially all of the fair value of the underlying asset, if such present value constitutes at least 90% of said fair value.

When it comes to real estate lease contracts, these may only be considered as financial when they meet all the requirements set forth in NIF D-5 "Leases".

Real estate acquired through financial leasing must be valued in accordance with the procedures made known by the Commission in Criterion B-6 "Real Estate" of this Annex.

Accounting for the Lessee

When the lessee opts to participate in the sale price of the goods to a third party, the Institution shall recognize the income corresponding to it at the time of the sale against the results of the period as other income (expenses) of the operation.

Operating Leases

Accounting for the Lessor

For the amount of amortizations that have not been settled within 30 natural days following the maturity date of the payment, the lessor must create the corresponding estimate, suspending the accumulation of rents, keeping its control in off-balance sheet accounts under the item of other registration accounts.

The lessor must present the receivable account in the balance sheet under the item of other debtors, and the lease income under the item of other income (expenses) of the operation in the statement of results.

Accounting for the Lessee

Institutions and Mutual Societies that act as lessees and that, at the entry into force of this criterion, have leases classified as operating leases, may apply what is provided in numeral ii), item b) of paragraph 81.4 of NIF D-5.

x)

Reinsurance Operations (B-24)

Objective

(1) This criterion establishes the accounting treatment to which Institutions and Mutual Societies must be subject in Reinsurance operations they carry out.

Recording Rules

(2) Reinsurance operations by the Lead Reinsurer must be recorded on the same day they are effected. Likewise, operations on behalf of the other reinsurer must be recorded by the lead reinsurer in the corresponding asset and liability accounts, having the necessary controls over issuance, collection, commissions, claims, adjustment expenses, salvages, and other concepts, which will serve as the basis for the preparation of reinsurance statements of account that are sent monthly to the other reinsurer, for the latter to record its operations in the corresponding items in the month it receives such information; such records must be made by operation and line of business in accordance with what is stated in Article 25 of the LISF.

(3) The Lead Reinsurer, for the purpose of recording these operations, must identify within the asset under the item of Debtors for Reinsurance Operations, Premiums in Reinsurance, Estimates for recovery from reinsurers for pending claims and adjustment expenses, and in the liability items, commissions to be accrued, reserves for obligations pending fulfillment for claims, benefits, guaranteed values or dividends for Reinsurance Operations, salvages in Reinsurance, recoveries from third parties, as well as register income and expenses for administration in Reinsurance in their results items, in accordance with their nature, balances that must coincide with the Reinsurance Statement of Account at the end of each month, which in turn must coincide with the balances reported in the item of Creditors for Reinsurance Operations.

(4) The Lead Reinsurer must consider that within the asset of Debtors for Reinsurance Operations, premiums in Reinsurance are integrated by premiums, surcharges, taxes, and duties on policies, which are recorded against premiums in Reinsurance in the item of Creditors for Reinsurance Operations; likewise, they must register the liability for commissions to be accrued in favor of agents who have participated in the intermediation of insurance policies on behalf of the reinsurer, decreasing the Commissions for Reinsurance Operations from the item of Creditors for Reinsurance Operations.

(5) Likewise, within the asset concepts under the item of Other Debtors for Reinsurance Operations, it must integrate the concept of Estimates for recovery from reinsurers for pending claims and adjustment expenses, in which estimated claims and adjustment expenses for claims in Reinsurance pending adjustment or settlement are recorded, against the item of reserves for obligations pending fulfillment for claims, benefits, guaranteed values or dividends and adjustment expenses for claims.

(6) Finally, expenses incurred by the Lead Reinsurer on behalf of the other reinsurer must register the amount chargeable to the reinsurer in the item of Debtors for Reinsurance Operations, derived from the outflow of resources to meet such expenditures.

(7) Regarding income from the administration of Reinsurance Operations, the balance chargeable to the reinsurer must be registered in the item of Debtors for Reinsurance Operations, affecting their results in the corresponding items in accordance with the nature of the income.

(8) The recovery of claims by payments chargeable to third parties, carried out by the Lead Reinsurer, must be registered at the moment it has the documentation accrediting the right to collect in the item of accounts receivable; likewise, it must register in the item of Creditors for Reinsurance Operations the rights in favor of the other reinsurer, affecting its results only by the amount of its participation. Likewise, the Non-Lead Reinsurer must register in the item of Creditors for Reinsurance Operations, the expenses for the administration of Reinsurance Operations in favor of the Lead Reinsurer, affecting the results items in accordance with the nature of the expenses.

Presentation Criteria

(9) As a general rule, Reinsurance Operations must be presented in the Balance Sheet in the items of Debtors and Creditors for Reinsurance Operations; likewise, the balances of accounts receivable from third parties for claims, Inventory of salvages to be realized, the reserve for obligations pending fulfillment for claims, and adjustment expenses for claims shall be presented net of Reinsurance.

y)

Surety Insurance (B-25)

Debtors for Surety Insurance Claims

(1) Institutions operating Surety Insurance must record in their accounting all operations they carry out, regardless of their origin, among which stands out the recording of debtors for surety insurance claims, which, in accordance with the minimum catalog referred to in Criterion C-1 of this Annex, is considered an asset.

(2) The right to collect registered at the moment the institution makes the payment of the claim to the beneficiaries of the surety insurance cannot exceed the amount paid and the corresponding accessories;

(3) The aforementioned debtor for surety insurance claims must be enforceable within a period not exceeding 90 natural days from its initial registration; therefore, after said period has elapsed, they must create an estimate for write-offs for 100% of the aforementioned right to collect. In the case where institutions know that the probability of recovery of said asset will be less than 100% from its initial recognition, they must register the corresponding estimate for write-offs.

Recovery of Surety Insurance Guarantees

(4) At the moment the insurance institution is awarded the recovery guarantees, it must cancel the right to collect registered in the item of debtors for surety insurance claims and register the guarantees in the corresponding asset at their fair value in accordance with Financial Information Standard B-17 "Determination of Fair Value", a value that cannot exceed the payment of the claim and the corresponding accessories. In the case of having guarantees, these deteriorate in different proportions according to the type of recovery guarantee obtained at that time. For the purpose of recording the recovery of guarantees for the payment of this type of insurance, which Institutions must carry out, they shall be subject to the following:

(5) For the amount paid for claims carried out by Institutions operating Surety Insurance with own resources, and having recovery guarantees that meet the requirements established for each of them in Chapter 16.3 of these Provisions, what is provided in Article 27, fraction XII of the LISF shall apply; therefore, said amount must be registered in its asset, according to the percentages established in the table annexed to this criterion, removing the charge to results previously made, regardless of its accounting in off-balance sheet accounts.

(6) Expenses incurred for the recovery of paid claims must be registered directly to results, as well as the income obtained on them at that time;

(7) To carry out the recording of the recovery of guarantees for the payment of surety insurance claims, the corresponding file must include the vouchers of the amounts paid, as well as the recovery guarantees available at that date, indicating their value;

(8) The registration of the guarantees, once awarded, will remain registered in the asset for a period of up to four years, depending on the type of guarantee in question, counted from the payment date, taking into account the quality of the guarantee, timeliness, and percentages indicated in the table annexed to this criterion. To this effect, the asset must be cancelled once the aforementioned period has concluded and moved to the item of uncollectible accounts.

(9) The accounting in uncollectible accounts and the cancellation of the asset may be carried out in advance when the Institution operating Surety Insurance has elements that accredit its registration.

(10) In those paid claims that have reinsurance, whether taken or ceded with Insurance Institutions or Institutions from Abroad, the corresponding part shall be registered in the specific items for these operations, in accordance with the minimum catalog referred to in Criterion C-1 of this Annex, applying the Provisions of this Chapter where appropriate. To this effect, the Ceding Institution must inform, within a period not exceeding 20 business days, counted from the date of accounting, to those Institutions to which it ceded reinsurance;

(11) At the close of the fiscal year, Institutions operating Surety Insurance must inform their Board of Directors of the amounts registered in results for the payment of Surety Insurance, as well as for the cancellation of the rights to collect.

(12) For the purposes of determining the recognition percentages of the rights to collect for Surety Insurance, the aforementioned "Debtors (B-7)" criterion of this Annex must be used, corresponding to debtors for surety liabilities, with the exception of the Counter-Surety of Institutions or Institutions from Abroad that are registered in the RGRE with a rating of "Good" or "Adequate", or of persons who meet what is established in Article 188 of the LISF; notwithstanding, said guarantee may be replaced by any of the following options:

TYPE OF GUARANTEE

PERMANENCE IN THE ASSET

1st year

2nd year

3rd year

4th year

Surety to cover surety insurance

100

0

0

0

Surety insurance to cover another surety insurance (Counter-insurance)

100

0

0

0

Provision of Funds Received from Individuals for surety insurance

(13) The amounts that the Institution receives for the concept of funds from individuals for the payment of possible claims must be recognized in the sub-item "Provisions of Funds Received from Individuals" in accordance with the minimum catalog referred to in Criterion C-1 of this Annex, for the amount of cash received, as established in the corresponding contracts.

(14) The accrual of interest pending collection on deposits for the concept of funds for the payment of claims received from individuals must be recognized in the Comprehensive Financing Result against the sub-item Debtors for Interest on Deposits Received as Guarantee. At the moment the accrued interest is collected, the balance in the aforementioned sub-item must be cancelled, and at the same time, it will register the cancellation of the corresponding balance in the Comprehensive Financing Result, generating a payment obligation in the sub-item "Creditors for Interest on Deposits Received as Guarantee".

(15) In the event of a claim, said funds must be applied against the corresponding Debtor for Claims, considering their effects from the reinsurance operations associated with said claim.

Series III. Criteria relating to basic consolidated financial statements.

a)

Minimum Catalog (C-1)

(1) In this section, the concepts that form part of the Balance Sheet and the Statement of Results (including off-balance sheet accounts) of Institutions and Mutual Societies are listed.

Balance Sheet

Total Asset

Investments

Securities and Operations with Derivative Products

Securities

Governmental

Private Companies. Known Rate

Private Companies. Variable Income

Foreign

Dividends Receivable on Capital Securities

Impairment of Securities (-)

Investments in Securities Lent

Restricted Securities

Operations with Derivative Products

Premium Paid for Option Contracts

Contributions and Guarantees for Derivative Operations

Fair Value (active part) at the time of acquisition

Debtor for Repo

Credit Portfolio (Net)

Current Credit Portfolio

On Policies

Housing Credits

Commercial Credits

Unsecured Credits

Loans for Financial Reinsurance Contracts Granted

Discounts and Rediscounts

Overdue Credit Portfolio

On Policies

Housing Credits

Commercial Credits

Unsecured Credits

Loans for Financial Reinsurance Contracts Granted

Discounts and Rediscounts

Preventive Estimates for Credit Risk

Housing Credits

Commercial Credits

Unsecured Credits

Loans for Financial Reinsurance Contracts Granted

Discounts and Rediscounts

Real Estate (Net)

Real Estate

Net Valuation

Depreciation (-)

Investments for Labor Obligations

Cash and Cash Equivalents

Cash

Banks, Checking Account

Debtors

For Premiums

Debtor for Premium by Subsidy Damages

Debts Chargeable to Dependencies and Entities of the Federal Public Administration

Premiums Receivable from Issued Sureties

Agents and Adjusters

Agents, Current Account

Unreported Collected Premiums Debts

Adjusters, Current Account

Documents Receivable

Debtors for Liabilities

Debtors for Liabilities of Sureties for Paid Claims

Debtors for Surety Insurance Claims

Provisions of Funds Received from Individuals (-)

Others

Other Debtors

Guarantee Deposits

VAT Paid for Application

Debtors for Interest on Deposits Received as Guarantee

Matrix and Branches, Current Account

Debtors for Analogous and Related Services

Debtors for Reinsurance Operations

Premiums in Reinsurance

Estimates to recover from Reinsurance for pending claims

Adjustment expenses for Reinsurance Operations

Income and expenses to recover from Reinsurance

Estimate for Write-offs (-)

Estimate for Write-offs of Premiums Receivable

Estimate for Write-offs of Other Debts

Estimate for Write-offs of Unreported Collected Premiums Debts

Estimate for Write-offs of Debtors for Liabilities

Reinsurers and Re-sureties

Insurance and Surety Institutions

Institutions, Current Account

Commissions Receivable from Ceded Reinsurance and Re-surety

Retained Deposits

Premiums Retained for Taken Reinsurance and Re-surety

Claims Retained for Taken Reinsurance

Recoverable Amounts from Reinsurance

By Participation of Institutions or Foreign Reinsurers for Risks in Course (Valuation at Agreed Technical Rate)

By Participation of Institutions or Foreign Reinsurers for Long-Term Risks in Course due to Variations in Interest Rates

By Participation of Institutions or Foreign Reinsurers for Pending Claims

By Participation of Institutions or Foreign Reinsurers in the Reserve of Sureties in Force

By Participation of Reinsurers for Salvages Pending Sale for Taken Reinsurance

By Participation of Reinsurers in Paid Claims of Cash, for Taken Reinsurance

By Participation of Re-sureties and Reinsurers for Surety Claims and Claims Paid for Surety Insurance

By Participation of Re-sureties in Constituted Liabilities

By Participation of Reinsurers for Non-Proportional Reinsurance and Re-surety Coverages

Preventive Estimate of Credit Risks of Foreign Reinsurers (-)

Recoverable Amounts from Reinsurance due to the application of valuation methods in the reserve of risks in course

Recoverable Amounts from Reinsurance due to the application of valuation methods in the reserve for obligations pending fulfillment for claims occurred and not reported

Reinsurance and Re-surety Intermediaries

Estimate for Write-offs (-)

Permanent Investments

Subsidiaries

Associates

Other Permanent Investments

Other Assets

Total Furniture and Equipment

Furniture and Equipment

Right-of-Use Assets

Accumulated Depreciation of Furniture and Equipment (-)

Accumulated Depreciation of Right-of-Use Assets (-)

Total Adjudicated Assets

Adjudicated Assets

Adjudicated Assets Derived from Disposal of Investments

Estimate for write-offs (-)

Others

Inventory of Salvages to Be Realized

Prepayments

Taxes Paid in Advance

Deferred Income Taxes to Apply

Deferred Staff Participation in Profits (In Favor)

Amortizable Assets

Establishment and Reorganization Expenses

Adaptation and Improvement Expenses

Other Concepts to Amortize

Expenses for Issuance and Placement of Subordinated Obligations Convertible

Obligatorily to Capital, to Amortize

Expenses for Issuance and Placement of Subordinated Obligations Not Susceptible of

Being Converted into Shares

Expenses for Issuance and Placement of Other Credit Titles

Costs and expenses associated with the granting of Credit

Amortization (-)

Accumulated Amortization of Establishment and Reorganization Expenses

Accumulated Amortization of Adaptations and Improvements

Accumulated Amortization of Expenses for Issuance of Debt Instruments

Long-Term Intangible Assets

Long-Term Intangible Assets

Impairment of Long-Term Assets (-)

Total Liability

Technical Reserves

Reserve for Risks in Course

Reserve for Risks in Course (Valuation at Agreed Technical Rate)

Life Insurance

Individual Life

Group Life

Group Life

Accident and Health Insurance

Medical Expenses

Personal Accidents

Health

Property Insurance

Civil Liability and Professional Risks

Maritime and Transport

Fire

Agricultural and Animal

Automobiles

Credit

Surety

Housing Credit

Financial Guarantee

Catastrophic Risks

Others

Taken Re-surety

Reserve of Sureties in Force

Fidelity

Judicial

Administrative

Credit

Guarantee Trusts

Result in the Valuation of the Long-Term Reserve for Risks in Course due to

Variations in Interest Rates

Life Insurance

Individual Life

Group Life

Group Life

Accident and Health Insurance

Medical Expenses

Personal Accidents

Health

Property Insurance

Civil Liability and Professional Risks

Maritime and Transport

Fire

Agricultural and Animal

Automobiles

Credit

Surety

Housing Credit

Financial Guarantee

Catastrophic Risks

Others

Taken Re-surety

Reserve of Sureties in Force

Fidelity

Judicial

Administrative

Credit

Guarantee Trusts

Effects by Application of the Valuation Methods of the Reserve for Risks

in Course

Special technical reserve for use of experimental rates

Reserve for Obligations Pending Fulfillment

For expired policies and claims occurred pending payment. Known Amounts

Life

Accidents and Diseases

Damages

For expired policies and claims occurred pending payment. Amounts not

known susceptible to adjustments

Accidents and Diseases

Damages

For expired policies and claims occurred pending payment. For dividends and

periodic profit distributions

Life

Accidents and Diseases

Damages

For claims occurred and not reported and adjustment expenses assigned to the

claims.

Life

Accidents and Diseases

Damages

For funds in administration

For Premiums in Deposit

Effects by Application of the Valuation Methods of the Reserve for

Obligations Pending Fulfillment for Claims Occurred and Not

Reported

Contingency Reserve

Pension Insurance derived from social security

Other insurance

Sureties

Reserves for Specialized Insurance

Special provision reserve for claims (mutual)

Reserve for Investment Fluctuation

Catastrophic Risk Reserves

Agricultural and Animals

Credit

Surety

Housing Credit

Financial Guarantee

Earthquake

Hurricane and Other Hydrometeorological Risks

Reserves for Labor Obligations

Creditors

Agents and Adjusters

Agents, Current Account

Commissions to Accrue

Reserve for Additional Compensation to Agents

Adjusters, Current Account

Funds in Loss Administration

Creditors for Funds in Loss Administration

Creditors for Expenses Incurred by Loss Administration

Creditors for Surety Liabilities for Constituted Liabilities

Various

Inspection and Surveillance Rights

Dividends Payable on Shares

Creditors for Intermediation of Other Services

Creditors for Interest on Deposits Received as Surety Collateral

Creditors for Lease Contracts

Creditors for Interest on Subordinated Bonds Convertible to Capital

Mandatory to Capital

Creditors for Cancelled Policies

Various Creditors

Debts owed to the IMSS

Creditors for Reinsurance Operations

Reinsurance Premiums

Reinsurance Salvages

(-) Commissions for Reinsurance Operations

Recovery of Claims Charged to Third Parties

Expenditures for Reinsurance

Debts to the Special Insurance Fund

Provisions for Additional Benefits

Parent and Branches

Dividends and Bonuses Payable on Surety Policies

Debts for Credit Lines

Reinsurers and Reassurers

Insurance and Surety Institutions

Institutions, Current Account

Commissions Payable for Reinsurance Taken

Retained Deposits

Premiums Retained for Ceded Reinsurance and Reassurance

Reserve for Retained Claims for Ceded Reinsurance

Other Participations

Participation of Reinsurers for Salvages Pending Sale for Ceded Reinsurance

Participation to Reassurers and Reinsurance Companies for Guarantees Pending Recovery

Participation to Reassurers for Recoveries, Payable

Creditors for Premiums of Non-Proportional Reinsurance and Reassurance Coverage

Reinsurance and Reassurance Intermediaries

Operations with Derivative Products. Fair Value (liability side) at the time of acquisition

Obtained Financing

Debt Issuance

Subordinated Bonds Not Susceptible of Being Converted into Shares

Other Credit Instruments

Financial Reinsurance Contracts

Other Liabilities

Provision for Workers' Participation in Profits

Provision for Payment of Taxes

Other Obligations

Deposits as Guarantee for Rents

Provision for Various Obligations

Taxes Withheld on Behalf of Third Parties

VAT Payable

VAT to be Accrued

Deposits as Guarantee for Granting Credits

Creditors for Granting Credits

Deferred Credits

Provision for Deferred Workers' Participation in Profits

Provision for Deferred Payment of Taxes on Profits

Surcharges on Premiums to be Accrued

Products Collected in Advance

Commissions for Granting Credits

Financial Income to be Accrued Derived from Granting Credits

Financial Income to be Accrued in Capitalizable Lease Contracts

Total Capital

Contributed Capital

Paid-in Capital or Social Fund

Capital or Social Fund

Uncalled Capital or Social Fund (-)

Unpaid Capital or Social Fund (-)

Treasury Shares Recomprised (-)

Subordinated Bonds of Mandatory Conversion to Capital

Contributions for Future Capital Increases

Earned Capital

Reserves

Legal

For Acquisition of Treasury Shares

Other

Reserve for Premiums in Sale of Shares

Other Reserves

Organization Fund

Appreciation Surplus

Appreciation Surplus on Real Estate

Appreciation Surplus on Real Estate Acquired through Leasing

Deferred Income Tax on Appreciation of Real Estate

Appreciation Surplus on Securities

Devaluation Surplus on Securities

Result from Monetary Position of Investments in Financial Instruments for Collection or Sale

Deferred Income Tax on Investments in Financial Instruments for Collection or Sale

Result in the Valuation of the Reserve for Risks in Course due to variations in Rates

Appreciation/Devaluation Surplus on the Reserve for Long-Term Risks in Course

Deferred Income Tax on the Reserve for Long-Term Risks in Course

Permanent Investments

Undistributed Profits from Permanent Investments

Participation in the Update of Accounting Capital of Permanent Investments

Participation in Capital Account Accounts of Permanent Investments

Results or Remainders from Previous Exercises

Result or Remainder of the Exercise

Result from Holding Non-Monetary Assets

Correction by Reexpression

Result from Holding Non-Monetary Assets

Remediations for Defined Benefits to Employees

Controlling Participation

Non-Controlling Participation

Total Off-Balance Sheet Accounts

Securities in Deposit

Securities in Custody

Securities in Pledge

Seized Assets

Collateral of Financial Guarantee Insurance

Funds in Administration

Funds for Labor Obligations in Administration

Funds in Administration

Funds Received in Loss Administration

Trusts

Products in Favor of Settlor in Administration

Liabilities for Sureties in Force

Sureties in Force

(-) Sureties Ceded in Reassurance

Recovery Guarantees

Recovery Guarantees for Issued Sureties

Recovery Guarantees for Cautionary Insurance

(-) Participation to Reinsurers and Reassurers of Recovery Guarantees

(-) For Issued Sureties

(-) For Cautionary Insurance

Received Claims Pending Verification

Received Claims

(-) Participation of Received Claims

Contingent Claims

Contingent Claims

(-) Participation of Contingent Claims

Paid Claims

Paid Claims

(-) Participation of Paid Claims

Cancelled Claims

Cancelled Claims of the Exercise

(-) Participation of Cancelled Claims

Recovery of Paid Claims

Recovery of Paid Claims

(-) Participation of Recovery of Paid Claims

Fiscal Loss to Amortize

Reserve to be Constituted for Labor Obligations

Registration Accounts

Of Capital

Updated Contribution Capital

Issued Subordinated Bonds

Appreciation Surplus on Capitalized Real Estate

Of Fiscal Registration

Asset to Depreciate

Expenses to Amortize

Fiscal Update Adjustment

Fiscal Result

Net Fiscal Profit to Distribute

Various

Uncollectible Accounts

(-) Participation of Uncollectible Accounts by Reassurance

Purchase of Currency Hedges

Depositaries of Surety Policies to be Issued

Imposed Sanctions Pending Payment

Accrued Interest Not Collected Derived from Overdue Credit Portfolio

Various Unspecified Concepts

Operations with Derivative Products

Acquisition of Option Contracts

Rights and Obligations for Future Operations

Acquisition of Swaps

Acquisition of Forwards

Operations with Securities Granted in Loan

Guarantees Received for Derivatives

Guarantees Received for Repo

2. Income Statement

Issued Premiums

Direct

Taken

Ceded Premiums

Direct

Taken

Retention Premiums

Direct

Taken

Net Increase in the Reserve for Risks in Course and Sureties in Force

Direct

Taken

Accrued Retention Premiums

Direct

Taken

Net Acquisition Cost

Commissions to Agents

Additional Compensation to Agents

Commissions for Reinsurance and Reassurance Taken

Commissions for Reinsurance and Reassurance Ceded

Direct

Taken

Excess of Loss Coverage

Direct

Taken

Others

Direct

Taken

Net Cost of Loss Experience, Claims and Other Obligations

Pending to Fulfill

Loss Experience and Other Obligations Pending to Fulfill

Direct

Taken

Recovered Loss Experience from Non-Proportional Reinsurance

Direct

Taken

Claims

Direct

Taken

Claims Recovered from Non-Proportional Reinsurance and Reassurance

Direct

Taken

Technical Profit (Loss)

Net Increase in Other Technical Reserves

Reserve for Catastrophic Risks

Reserve for Specialized Insurance

Contingency Reserve

Other Reserves

Result of Analogous and Related Operations

Income from Administration of Related Services

Income from Related Services

Expenses for Analogous and Related Services

Gross Profit (Loss)

Net Operating Expenses

Administrative and Operating Expenses

Remuneration and Benefits to Personnel

Depreciations and Amortizations

Profit (Loss) from Operation

Integral Financing Result

From Investments

From Sale of Investments

From Valuation of Investments

From Surcharge on Premiums

From Issuance of Debt Instruments

From Financial Reinsurance

Interest on Credits

Preventive Write-offs for Recoverable Amounts of Reinsurance

Preventive Write-offs for Credit Risks

Others

Exchange Result

Result from Monetary Position

Participation in the Result of Permanent Investments

Profit (Loss) before Taxes on Profit

Provision for Payment of Taxes on Profit

Profit (Loss) before Discontinued Operations

Discontinued Operations

Profit (Loss) of the Exercise

b) General Balance Sheet (C-2)

(1) This section aims to disclose the basic structure of the General Balance Sheet referred to in Chapter 24.1 of these Provisions.

(2) In accordance with Provisions 23.1.14. Fraction II and 38.1.8. Fraction III, item e), in the case of the Consolidated General Balance Sheet, the "Controlling Participation" and "Non-Controlling Participation" must be incorporated in the capital grouping, in separate lines, and the information referred to in items I, II, III and IV of Provision 24.1.8 must be included, for which the following legends must be included:

"This Consolidated General Balance Sheet was prepared in accordance with the provisions issued in accounting matters by the National Commission of Insurance and Sureties, applied consistently, correctly reflecting in their entirety the operations carried out by the Institution (or in its case, Mutual Society or Controlling Company), and its subsidiaries up to the aforementioned date, which were carried out and valued in compliance with sound institutional practices and applicable legal and administrative provisions."

"This Consolidated General Balance Sheet was approved by the Board of Directors under the responsibility of the officials who sign it."

"The Consolidated Financial Statements and the Disclosure Notes that form an integral part of the consolidated financial statements can be consulted on the Internet, on the electronic page: ___________________________."

"The Consolidated Financial Statements are audited by the C.P.C. _________________________, member of the firm named ___________________ contracted to provide external audit services to this institution/society; likewise, the technical reserves of the institution/society were audited by the Act. ___________________________________."

"The Report issued by the external auditor, the Consolidated Financial Statements and the notes that form an integral part of the audited Consolidated Financial Statements will be located for consultation on the Internet, on the electronic page: ____________________, starting from forty-five business days following the closing of the exercise of __________."

"Likewise, the Report on Solvency and Financial Condition will be located for consultation on the Internet, on the electronic page: ____________________, starting from ninety business days following the closing of the exercise of __________."

(3) In the event that those Institutions and Mutual Societies have capitalized part of the appreciation surplus on real estate, they must insert at the foot of the Consolidated General Balance Sheet the following note:

"Contributed capital includes the amount of $______________ national currency, originated by the partial capitalization of the appreciation surplus on real estate."

c) Income Statement (C-3)

(1) This section aims to disclose the structure of the Income Statement for the purposes stated in Chapter 24.1 of these Provisions.

In accordance with Provisions 23.1.14. Fraction III and 38.1.8. Fraction III, item e), in the case of the Consolidated Income Statement, the lines for "Controlling Participation" and "Non-Controlling Participation" must be incorporated after the Profit (Loss) of the Exercise and at the foot the following legends must be included:

"This Consolidated Income Statement was prepared in accordance with the provisions issued in accounting matters by the National Commission of Insurance and Sureties, applied consistently, reflecting in a consolidated manner the income and expenditures derived from the operations carried out by the Institution (or in its case, Mutual Society or Controlling Company) and its subsidiaries for the aforementioned period, which were carried out and valued in compliance with sound institutional practices and applicable legal and administrative provisions."

"This Consolidated Income Statement was approved by the Board of Directors under the responsibility of the officials who sign it."

d) Cash Flow Statement (C-4)

(1) This section aims to disclose the basic structure and methodology for the preparation of the Cash Flow Statement referred to in Chapter 24.1 of these Provisions.

Objective and Scope

(2) This standard aims to establish the general characteristics, as well as the structure that the Cash Flow Statement of Institutions and Mutual Societies or Controlling Companies must have, which must adhere to what is provided for in this standard, and to what is stated in Financial Information Standard NIF B-2 "Cash Flow Statement". Likewise, minimum guidelines are established, with the purpose of homogenizing the presentation of this financial statement among entities, and in this way, facilitate its comparability.

Objective of the Cash Flow Statement

(3) The Cash Flow Statement has as its main objective to provide users of financial statements with information about the ability of Institutions and Mutual Societies or Controlling Companies to generate cash and cash equivalents, as well as the manner in which entities use said Cash Flows to cover their needs.

(4) When the Cash Flow Statement is used together with the rest of the financial statements, it provides information that allows users to:

Evaluate changes in the entity's assets and liabilities and in its financial structure (including its liquidity and solvency), and

Evaluate both the amounts and dates of receipts and payments, in order to adapt to the circumstances and to opportunities for generation and application of cash and cash equivalents.

(5) Likewise, the Cash Flow Statement presents the operations that were carried out for accounting purposes in the period, that is, when the collection or payment of the item in question is materialized; while the income statement shows the operations accrued in the same period, that is, when they are recognized accounting-wise at the moment they occur, regardless of the date on which they are considered carried out for accounting purposes.

(6) The Cash Flow Statement allows Institutions and Mutual Societies to improve the comparability of information on the operational performance of different entities, because it eliminates the effects generated by the use of different accounting treatments for the same transactions and economic events.

(7) Historical information on Cash Flows is used as an indicator of the amount, timing of generation, and probability of future Cash Flows. Likewise, such information is useful to verify the accuracy of forecasts made in the past of future Cash Flows, to analyze the relationship between profitability and net Cash Flows, as well as, in its case, the effects of inflation when there is an inflationary environment.

Presentation Standards

General Considerations

(8) Institutions and Mutual Societies must exclude from the Cash Flow Statement all operations that did not affect Cash Flows. For example:

Conversion of debt to capital and distribution of dividends in shares;

Acquisition of a subsidiary with payment in shares;

Payments in shares to employees, and

Operations negotiated with exchange of assets.

Structure of the Cash Flow Statement

(9) Institutions and Mutual Societies must classify and present Cash Flows, according to their nature, in operating, investing, and financing activities, attending to their economic substance and not to the form used to carry them out.

(10) The structure of the Cash Flow Statement must include, at minimum, the following items:

Operating activities;

Investing activities;

Financing activities;

Net increase or decrease in cash and cash equivalents;

Effects from changes in the value of cash and cash equivalents;

Cash and cash equivalents at the beginning of the period, and

Cash and cash equivalents at the end of the period.

Operating activities:

(11) Cash Flows related to these activities are those that derive from operations that constitute the main source of income of Institutions and Mutual Societies, therefore, they include activities that intervene in the determination of their net profit or loss, except those that are associated either with investing or financing activities. Some examples of Cash Flows for operating activities are:

1.1) Payments for the acquisition of investments in securities;

1.2) Payments of premiums for the acquisition of options;

1.3) Collections of premiums for the sale of options;

1.4) Outflows of cash and cash equivalents for debtors by repo;

1.5) Outflows of cash and cash equivalents for the granting of Credits;

1.6) Inflows of cash and cash equivalents for the receipt of interbank loans and from other organisms;

1.7) Inflows of cash and cash equivalents for creditors by repo;

1.8) Inflows of cash and cash equivalents for collateral sold or given as guarantee;

1.9) Inflows of cash and cash equivalents for the issuance of subordinated bonds with liability characteristics;

1.10) Collections of income from interest referred to in criterion C-2 "Income Statement", as well as its main associated, which come from, among others, the following concepts:

i. Cash and cash equivalents (with the exception of the profit or loss in changes coming from this concept);

ii. Margin accounts;

iii. Investments in securities, and

iv. debtors by repo.

1.11) Payments of interest expenses referred to in criterion C-2, as well as its main associated, which come from, among others, the following concepts:

i. creditors by repo, and

ii. subordinated bonds with liability characteristics.

1.12) Collection of premiums issued from direct insurance and premiums for reinsurance or reassurance taken;

1.13) Payment of premiums for reinsurance or reassurance ceded, as well as for cancellations and returns of premiums;

1.14) Payments and collections, as appropriate, of Direct Commissions or Compensation and expenses associated with the issuance of policies of the Institutions;

1.15) Payment of losses, claims and other contractual obligations and other expenses related to the handling of losses and claims, as well as the collection of recoveries from reinsurers and reassurers;

1.16) Collections and payments arising from the purchase and sale of foreign currency and minted precious metals, investments in securities, derivatives;

1.17) Collections from the sale of Adjudicated Assets;

1.18) Collections and payments generated by derivatives for trading purposes;

1.19) Collections and payments associated with hedging instruments for covered items that are classified as operating activities;

1.20) Payments for direct benefits to employees, fees, rents, promotion and advertising expenses, among other administrative expenses;

1.21) Payments of taxes on profit;

1.22) Collections of taxes on profit (refunds);

(12) Taxes on profit.- Cash Flows related to taxes on profit must be presented in a separate item within the classification of operating activities, unless it is practical to relate them to investing or financing activities, as is the case of the tax derived from discontinued operations, which is related to investing activities.

Investing activities:

(13) Cash Flows related to investing activities represent the extent to which Institutions and Mutual Societies have allocated resources to items that will generate income and Cash Flows in the future.

(14) Cash Flows for investing activities are, for example, the following:

2.1) Collections from the disposal of real estate, furniture and equipment;

2.2) Payments for the acquisition of real estate, furniture and equipment;

2.3) Collections from the disposal of subsidiaries and associates;

2.4) Payments for the acquisition of subsidiaries and associates;

2.5) Collections from the disposal of other permanent investments;

2.6) Payments for the acquisition of other permanent investments;

2.7) Collections of dividends in cash;

2.8) Payments for the acquisition of intangible assets;

2.9) Collections from the disposal of long-term assets available for sale;

2.10) Collections from the disposal of other long-term assets;

2.11) Payments for the acquisition of other long-term assets;

2.12) Collections associated with hedging instruments for covered items that are classified as investing activities;

2.13) Payments associated with hedging instruments for covered items that are classified as investing activities;

(15) Investments in unconsolidated subsidiaries and associates . -

Cash Flows between the holding entity and its unconsolidated subsidiaries or associates must be presented in the Cash Flow Statement, that is, they must not be eliminated, such as Cash Flows related to the collection and payment of dividends.

(16) Acquisitions and disposals of subsidiaries and other businesses . -

Cash Flows derived from acquisitions or disposals of subsidiaries and other businesses must be classified in investing activities; likewise, they must be presented in a single separate line that involves the entire acquisition operation or, in its case, disposal, instead of presenting the individual acquisition or disposal of the assets and liabilities of said businesses at the date of

acquisition or disposal. Cash Flows derived from acquisitions must not be offset against those from disposals.

(17) Cash Flows paid for the acquisition of subsidiaries and other businesses must be presented net of the cash and cash equivalents balance acquired in such operation.

(18) Cash Flows collected from the disposal of subsidiaries and other businesses (discontinued operations) must be presented net of the cash and cash equivalents balance disposed of in such operation. Furthermore, this amount must be net of the income tax attributable to such disposal. In the case of foreign operations, this net amount must show the accumulated adjustment for conversion attributable to such operations.

Financing Activities:

(19) Cash Flows related to financing activities show the entity's capacity to restore to its shareholders and creditors (for example, holders of subordinated bonds with equity characteristics) the resources they previously allocated to the entity and, where applicable, to pay them returns.

(20) Cash Flows for financing activities are, for example, the following:

3.1) Cash and cash equivalents collected from the issuance of the entity's own shares, net of related issuance expenses;

3.2) Cash and cash equivalents paid to shareholders for capital repayments, dividends, or associated with the repurchase of own shares;

3.3) Collections from the issuance of subordinated bonds with equity characteristics;

3.4) Interest and principal payments associated with subordinated bonds with equity characteristics;

Net increase or decrease in cash and cash equivalents:

(21) After classifying Cash Flows into operating activities, investing activities, and financing activities, the net cash flows from these three sections must be presented.

Effects from changes in the value of cash and cash equivalents:

(22) Institutions and Mutual Societies must present in a separate line item, as applicable, the following:

5.1) The effects from conversion referred to in the section "conversion of the Statement of Cash Flows from functional currency to reporting currency", which arise from having used different exchange rates for the conversion of the initial balance, the final balance, and the Cash Flows, of a foreign operation;

5.2) The effects from exchange gains or losses on cash and cash equivalents referred to in the section "conversion of balances or Cash Flows in foreign currency", which includes the difference generated by the conversion of the initial balance of cash and cash equivalents to the closing day exchange rate of the previous period published by the Bank of Mexico on its internet page www.banxico.org.mx, or the one that replaces it, and of the final balance of cash and cash equivalents to the closing day exchange rate of the current period, published by the Bank of Mexico on the aforementioned page;

5.3) Effects on cash and cash equivalents balances resulting from changes in their value due to fluctuations in their Fair Value, and

5.4) Effects from inflation associated with the balances and Cash Flows of any of the entities comprising the consolidated economic entity that is located in an inflationary economic environment.

Cash and cash equivalents at the beginning of the period:

(23) Institutions and Mutual Societies must present a separate line item named "Cash and cash equivalents at the beginning of the period", which corresponds to the cash and cash equivalents balance presented in the Balance Sheet at the end of the previous period (including restricted availability), in order to reconcile it with the cash and cash equivalents balance at the end of the current period.

Cash and cash equivalents at the end of the period:

(24) Institutions and Mutual Societies must present a separate line item named "Cash and cash equivalents at the end of the period", which must be determined by the algebraic sum of the line items: "Net increase in cash and cash equivalents" or "Net decrease in cash and cash equivalents", "Effects from changes in the value of cash and cash equivalents", and "Cash and cash equivalents at the beginning of the period". This sum must correspond to the cash and cash equivalents balance presented in the Balance Sheet at the end of the period.

Additional Considerations

(25) Financial instruments for hedging purposes. - When a financial instrument is held for hedging purposes, the Cash Flows of said instrument must be classified in the same manner as the Cash Flows from the hedged item.

Procedure for preparing the Statement of Cash Flows

(26) To determine and present the Cash Flows from operating activities, the entity must apply the indirect method, through which the net result of the period is increased or decreased by the effects of transactions of items that do not imply a cash flow; changes occurring in the balances of operating items, and by Cash Flows associated with investing or financing activities.

(27) The net cash flows related to operating activities must be determined by increasing or decreasing the net result by the effects of:

Items that do not imply a cash flow, such as: impairment losses or effects from reversal of impairment associated with investing activities (for example, of real estate, and other long-term assets); depreciation of real estate, furniture, and equipment; amortization of intangible assets; provisions; income taxes incurred and deferred; participation in the result of unconsolidated subsidiaries and associates, and discontinued operations (for example, in the case of the abandonment of a subsidiary or other business);

Changes occurring in the balances of operating items in the Balance Sheet of the entities during the period, such as: changes originating from margin accounts, investments in securities, debtors under repo agreements, securities lending (asset), derivatives (asset), loans, creditors under repo agreements, securities lending (liability), collateral sold or pledged, derivatives (liability), obligations in securitization operations, and subordinated bonds with liability characteristics, and

Cash Flows associated with investing or financing activities.

(28) Institutions and Mutual Societies must determine and present separately, after the operating activities line item, the Cash Flows derived from the main concepts of gross receipts and payments related to investing and financing activities, that is, receipts and payments must not be offset against each other.

Conversion of the Statement of Cash Flows of a foreign operation to the reporting currency

(29) In the conversion of the Statement of Cash Flows from the functional currency to the reporting currency of a foreign operation located in a non-inflationary economic environment, entities must adhere to the following:

The Cash Flows of the period must be converted at the historical closing day exchange rate on the date each cash flow in question was generated, which will be the one published by the Bank of Mexico on its internet page www.banxico.org.mx, or the one that replaces it;

The initial balance of cash and cash equivalents must be converted at the closing day exchange rate on the date of the end of the previous period, published by the Bank of Mexico on the aforementioned internet page, and

The final balance of cash and cash equivalents must be converted at the closing day exchange rate on the date of the end of the current period, published by the Bank of Mexico on the aforementioned internet page.

(30) In the conversion of the Statement of Cash Flows from the functional currency to the reporting currency of a foreign operation located in an inflationary economic environment, entities must adhere to the following:

The Cash Flows of the period must be converted at the closing day exchange rate on the date of the end of the current period, published by the Bank of Mexico on its internet page www.banxico.org.mx, or the one that replaces it;

The initial balance of cash and cash equivalents must be converted at the closing day exchange rate on the date of the end of the current period, published by the Bank of Mexico on the aforementioned internet page, and

The final balance of cash and cash equivalents must be converted at the closing day exchange rate on the date of the end of the current period, published by the Bank of Mexico on the aforementioned internet page.

(31) For the conversion of the Cash Flows of the period, for practical reasons, a representative exchange rate of the conditions existing on the dates when the Cash Flows were generated may be used, such as the weighted average exchange rate of the period; however, when exchange rates have varied significantly during the period, such exchange rate must not be used.

(32) The effect from conversion that arises from having used different exchange rates for the conversion of the initial balance, the final balance, and the Cash Flows must be presented in the line item called "Effects from changes in the value of cash and cash equivalents", referred to in subsection b) of the section "effects from changes in the value of cash and cash equivalents". This effect must correspond to what would have been obtained if both the initial balance of cash and the Cash Flows of the period had been converted at the closing exchange rate used to convert the final balance of cash and cash equivalents.

Conversion of balances or Cash Flows in foreign currency

(33) In order to determine the changes in the balances of operating items in foreign currency from operating activities, these must be converted at the closing day exchange rate published by the Bank of Mexico on its internet page www.banxico.org.mx, or the one that replaces it, on the closing date.

(34) Cash Flows from foreign currency transactions related to investing and financing activities will be converted to the entity's reporting currency by applying to the amount in foreign currency the closing day exchange rate on the date each flow occurred, which will be the one published by the Bank of Mexico on the aforementioned internet page.

(35) The exchange gains or losses originated by variations in the exchange rate are not Cash Flows. However, the effect of variations in the exchange rate of cash and cash equivalents held or payable in foreign currency is presented in the Statement of Cash Flows in order to reconcile cash and cash equivalents at the beginning and end of the period. This effect must be presented separately from the operating, investing, and financing activity line items, within the line item called "Effects from changes in the value of cash and cash equivalents", referred to in paragraph 32, which includes the differences, if any, of having presented the Cash Flows at the closing exchange rate of the current period.

Effects of Inflation

(36) When, in terms of what is established in NIF B-10 "Effects of Inflation", the environment corresponds to a non-inflationary environment, Institutions and Mutual Societies must present their Statement of Cash Flows expressed in nominal values, whereas if said economic environment is inflationary, entities must present their Statement of Cash Flows expressed in monetary units of purchasing power at the date of the end of the current period.

(37) In cases where the economic environment of the entities is inflationary, as part of the operations that did not affect Cash Flows, the effects of inflation recognized in the period within the financial statements must be excluded, in order to determine a Statement of Cash Flows at nominal values. Such Cash Flows must be presented expressed in monetary units of purchasing power at the date of the end of the current period.

(38) When the environment of Institutions and Mutual Societies has changed from non-inflationary to inflationary, the Statements of Cash Flows of previous periods must be presented expressed in monetary units of purchasing power of the date of the end of the current period.

(39) In cases where the economic environment of the entities has changed from inflationary to non-inflationary, the Statements of Cash Flows of previous periods must be presented expressed in the monetary units of purchasing power of the last Statement of Cash Flows presented within an inflationary environment and included in said comparative presentation.

Consolidated Statement of Cash Flows

(40) In the preparation of the consolidated Statement of Cash Flows, Cash Flows that occurred during the period between Institutions and Mutual Societies that are part of the consolidating economic entity must be eliminated. For example, Cash Flows derived from intercompany operations, capital contributions, and dividends paid.

(41) In cases where a controlling entity buys or sells shares of a subsidiary to the non-controlling interest, the Cash Flows associated with said operation must be presented as financing activities, within the consolidated Statement of Cash Flows. This is because this operation is considered a transaction between shareholders.

NAME OF THE INSTITUTION, MUTUAL SOCIETY OR CONTROLLING SOCIETY

STATEMENT OF CASH FLOWS

FROM __ OF __________ TO __ OF __________ OF ____

EXPRESSED IN MONETARY UNITS OF PURCHASING POWER OF ________ OF _______ (1)

(1) This line item will be omitted if the economic environment is "non-inflationary".

Net Result

Adjustments for items that do not imply cash flow:

$

Gain or loss from valuation associated with investing and financing activities

"

Estimate for Write-off or difficult collection

"

Impairment losses or effects from reversal of impairment associated

with investing and financing activities

"

Depreciations and amortizations

"

Adjustment or increase to technical reserves

Provisions

"

Income taxes incurred and deferred

"

Participation in the result of unconsolidated subsidiaries and

associates

"

Discontinued operations

"

$

Operating Activities

Change in margin accounts

$

Change in investments in securities

"

Change in debtors under repo agreements

"

Change in securities lending (asset)

"

Change in derivatives (asset)

"

Change in premiums receivable

Change in debtors

Change in reinsurers and guarantors

Change in Adjudicated Assets

"

Change in other operating assets

"

Changes in contractual obligations and expenses associated with

claims

Change in derivatives (liability)

"

Change in other operating liabilities

"

Change in hedging instruments (of hedged items related

with operating activities)

"

Net cash flows from operating activities

"

Investing Activities

Collections from disposal of real estate, furniture, and equipment

$

Payments for acquisition of real estate, furniture, and equipment

"

Collections from disposal of subsidiaries and associates

"

Payments for acquisition of subsidiaries and associates

"

Collections from disposal of other permanent investments

"

Payments for acquisition of other permanent investments

"

Collections of cash dividends

"

Payments for acquisition of intangible assets

"

Collections from disposal of long-term assets available for sale

"

Collections from disposal of other long-term assets

"

Payments for acquisition of other long-term assets

"

Net cash flows from investing activities

"

Financing Activities

Collections from issuance of shares

$

Payments for capital repayments

"

Payments of cash dividends

"

Payments associated with repurchase of own shares

"

Collections from issuance of subordinated bonds with equity

characteristics

"

Payments associated with subordinated bonds with equity

characteristics

"

Net cash flows from financing activities

"

Net increase or decrease in cash

$

Effects from changes in the value of cash

"

Cash and cash equivalents at the beginning of the period

"

Cash and cash equivalents at the end of the period

$

(42) In accordance with Provisions 23.1.14. Fraction V and 38.1.8. Fraction III, subsection e), in the case of the Statement of Cash Flows, the following legends must be included:

" The present Consolidated Statement of Cash Flows was prepared in accordance with the provisions in accounting matters issued by the National Commission for Insurance and Surety Bonds, applied consistently, reflecting all cash inflows and outflows that occurred in the Institution (or in its case, Mutual Society or Controlling Society) and its subsidiaries for the aforementioned period, which were carried out and valued in compliance with sound institutional practices and applicable legal and administrative provisions.

" The present Consolidated Statement of Cash Flows was approved by the Board of Administration under the responsibility of the officials who sign it. "

e)

Statement of Changes in Equity and Capital (C-5)

(1) This section aims to disclose the basic structure and methodology for the preparation of the Statement of Changes in Equity referred to in Chapter 24.1 of these Provisions.

Background

(2) Financial information must fulfill, among other things, the purpose of reporting modifications in owners' investment during a defined accounting period, requiring the establishment, through specific criteria, of the objectives and general structure that the Statement of Changes in Equity must have.

Objective and Scope

(3) This criterion aims to establish the general characteristics, as well as the structure that the Statement of Changes in Equity of Institutions and Mutual Societies must have, which must adhere to what is provided in this criterion. Furthermore, minimum guidelines are established with the purpose of homogenizing the presentation of this financial statement among the aforementioned entities, and in this way, facilitate its comparability.

Objective of the Statement of Changes

in Equity

(4) The Statement of Changes in Equity aims to present information on the movements in the investment of the owners of Institutions and Mutual Societies during a specific period.

(5) Consequently, said financial statement will show the increase or decrease in the equity of the aforementioned entities, derived from two types of movements: inherent to owners' decisions and to the recognition of comprehensive income.

(6) This criterion does not aim to establish the mechanics by which the aforementioned movements are determined, as they are subject to accounting criteria for Institutions and Mutual Societies or specific NIFs established for this purpose.

Concepts Integrating the Statement of Changes

in Equity

(7) In a general context, the concepts by which modifications to equity are presented are the following:

(8) Movements inherent to owners' decisions. - Within this type of movements are those directly related to the decisions owners make regarding their investment in the entity. Some examples of this type of movement are the following:

Subscription of shares;

Capitalization of profits;

Establishment of reserves;

Transfer of net result to prior periods' results, and

Payment of dividends.

(9) Movements inherent to the recognition of comprehensive income. - These refer to increases or decreases during a period, derived from transactions, other events, and circumstances, originating from sources not linked to owners' decisions. The purpose of reporting this type of movement is to measure the entity's performance by showing the Changes in Equity derived from the net result of the period, as well as those items whose effect from specific provisions of some accounting criteria for Institutions and Mutual Societies or NIFs, are reflected directly in equity and do not constitute capital contributions, reductions, or distributions, such as, for Institutions and Mutual Societies:

Result from valuation of investments in financial instruments to collect or sell;

Result from valuation of Cash Flow hedging instruments;

Accumulated effect from conversion, and

Result from holding non-monetary assets.

Structure of the Statement of Changes

in Equity of Institutions and Mutual Societies.

(10) The Statement of Changes in Equity will include all concepts that integrate equity; their valuation will be carried out in accordance with the corresponding accounting criteria for Institutions and Mutual Societies. These concepts are listed below:

Paid-in capital or social fund;

Contributions for future capital increases formalized by its governing body;

Share premium;

Subordinated obligations in circulation;

Capital reserves;

Result of prior periods;

Result from valuation of investments in financial instruments to collect or sell;

Result from valuation of Cash Flow hedging instruments;

Accumulated effect from conversion;

Result from holding non-monetary assets, and

Net result.

Presentation of the Statement of Changes

in Equity

(11) The concepts described above correspond to the minimum required for the presentation of the Statement of Changes in Equity, however, Institutions and

Mutual societies must disaggregate, either in the aforementioned Statement of Changes in Shareholders' Equity or through notes to the financial statements, the content of the concepts they deem necessary to show the financial position of the entity to the user of the financial information. At the end of this criterion, a Statement of Changes in Shareholders' Equity prepared with the minimum concepts referred to in the preceding paragraph is shown.

Characteristics of the concepts that make up the structure of the Statement of Changes in Shareholders' Equity

(12) Movements must be incorporated into the concepts described in the structure of the Statement of Changes in Shareholders' Equity, already cited, according to the chronological order in which the events occurred:

1. Movements inherent to owner decisions. - Each concept relative to this type of decision must be separated, in accordance with what is established in the paragraph on "movements inherent to owner decisions" of this criterion, describing the concept and the date on which they were generated, and

2. Movements inherent to the recognition of comprehensive income. - They must be separated according to the specific event or criterion that originates them, in accordance with the concepts mentioned in the paragraph on "movements inherent to the recognition of comprehensive income" of this criterion.

General Considerations

(13) The Statement of Changes in Shareholders' Equity must indicate the variations of the periods being reported; this implies starting from the balances that make up the shareholders' equity of the initial period, analyzing the movements that occurred from that date.

(14) Likewise, in the event of an inflationary environment, all balances and movements incorporated in the Statement of Changes in Shareholders' Equity must be shown expressed in monetary units of purchasing power relative to the date of presentation of the financial statements.

NAME OF THE INSTITUTION, MUTUAL SOCIETY OR HOLDING COMPANY

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

FROM DECEMBER 31, ____ TO DECEMBER 31, ____

FIGURES EXPRESSED IN CURRENCY OF PURCHASING POWER OF DECEMBER 31, ___ (1)

(1) This line will be omitted if the economic environment is "non-inflationary".

Contributed Capital

Earned Capital

Permanent Investments

Unrealized Gain/Loss on Non-Monetary Assets

Remeasurements of Defined Benefit Employee Benefits

Surplus or Deficit on Valuation

Concept

Social Capital or Fund

Paid-in Capital

Subordinated Conversion Obligations

Contributions for Future Capital Increases

Capital Reserves

Results of Prior Periods

Results of the Period

Participation in Other Shareholders' Equity Accounts

Unrealized Gain/Loss on Non-Monetary Assets

Remeasurements of Defined Benefit Employee Benefits

From Investments

Total Shareholders' Equity

Balance as of December 31, _________

MOVEMENTS INHERENT TO SHAREHOLDER DECISIONS

Subscription of shares

Capitalization of earnings

Establishment of Reserves

Payment of dividends

Transfer of results from prior periods

Others

Total

MOVEMENTS INHERENT TO THE RECOGNITION OF COMPREHENSIVE INCOME

Comprehensive Income

Results of the Period

Valuation results of available-for-sale securities

Results from holding non-monetary assets

Remeasurements of Defined Benefit Employee Benefits

Others

Total

Balance as of December 31, _______

(15) In accordance with Provisions 23.1.14. Fraction IV and 38.1.8. Fraction III, item e), for the Statement of Changes in Shareholders' Equity and Consolidated Equity, a column relative to "Non-Controlling Interest" must be incorporated, and the following legends must be included at the foot:

"This Statement of Changes in Shareholders' Equity or Consolidated Equity was prepared in accordance with the accounting provisions issued by the National Insurance and Surety Bond Commission, applied consistently, with all movements in the shareholders' equity accounts derived from the operations carried out by the institution (or in its case, Mutual Society or Holding Company) and its subsidiaries for the aforementioned period reflected, which were carried out and valued in compliance with sound institutional practices and applicable legal and administrative provisions.

"This Statement of Changes in Shareholders' Equity or Consolidated Equity was approved by the Board of Directors under the responsibility of the officials who sign it."

(16) The financial statements, as well as the Disclosure Notes, must be signed by at least the general manager and the general accountant, or their equivalents, as well as by the person responsible for carrying out internal audit functions.

(17) In accordance with what is established in these Provisions, Institutions and Mutual Societies may be subject to one or more of the sanctions established in the LISF for the following causes:

1. For the failure to present the information requested under this Chapter, or for the late presentation of such information, and

2. For the incorrect, incomplete, or inadequate presentation of the information referred to in this Chapter; notwithstanding that it has been presented on time and in due form.

f)

Financial Statements of Holding Companies of Financial Groups (C-6)

(1) For the preparation of the Consolidated Financial Statements of Holding Companies of Financial Groups referred to in Chapter 25.1 of these Provisions, such societies must adhere in their structure to what is established in criteria C-1 Minimum Catalog, C-2 Balance Sheet, C-3 Statement of Results, C-4 Statement of Cash Flows, and C-5 Statement of Changes in Shareholders' Equity, of this Annex, and in accordance with Provision 25.1.2, they must note at the foot of the basic consolidated financial statements the legends mentioned in said Provision.

---

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