Regulatory Alerts2024-08-07 | DOF 5735427Added
Amending Circular 4/24 of the Single Insurance and Surety Circular
Amending Circular 4/24 updates Chapter 17.2 regarding reinsurance operations in home credit insurance by removing the previous 30% cap on the maximum retention limit (LMR) for individual credits. The new rules establish that the LMR for damage operations cannot exceed 2% of Admissible Own Funds (FOPAS) covering the Risk Capital Requirement (RCS), with a mandatory reporting requirement if the calculated limit exceeds 1% of FOPAS. Additionally, institutions are prohibited from retaining risks exceeding 10% of FOPAS for properties located on the same or contiguous land plots, defined as within a one-kilometer radius. Any retention amounts exceeding the LMR must be transferred to insurance institutions or foreign reinsurers, with no single entity permitted to accept more than 50% of the excess, through proportional or non-proportional risk-by-risk reinsurance contracts.