BOARD OF DIRECTORS

BOARD RESOLUTION NO. 012/2022

SUBJECT: ECONOMIC POLICY ADVISORY - APPROVAL OF THE MAXIMUM LIMIT FOR FOREIGN INVESTMENTS BY INSURANCE COMPANIES.

SEEING:

• Law No. 1670 of October 31, 1995, Law of the Central Bank of Bolivia and its modifications.
• Board Resolution No. 128/2005 of October 21, 2005, which approves the Statute of the Central Bank of Bolivia and its modifications.
• Law No. 1883 of June 25, 1998, Insurance Law of the Plurinational State of Bolivia.
• Supreme Decree No. 25201 of October 16, 1998.
• Report from the Economic Policy Advisory BCB-APEC-SIE-INF-2022-2 of January 13, 2022.
• Report from the Legal Affairs Management BCB-GAL-SANO-DLBCI-INF-2022-11 of January 14, 2022.

CONSIDERING:

That Law No. 1670 in its articles 44 and 54, subsections a) and q), determines that the highest authority of the Central Bank of Bolivia is its Board of Directors, responsible for defining its specialized policies and general application regulations and internal norms, as well as establishing administrative, operational, and financial strategies. To this effect, the Board of Directors is empowered to adopt general decisions that are necessary for the BCB to fulfill its functions, competence, and powers assigned by the Law, and those that are necessary for the fulfillment of its functions.

That Law No. 1883 in its article 35 establishes that the BCB will periodically set the maximum limit for investments by Insurance companies in securities of issuers constituted abroad, which shall not exceed fifty percent (50%) of the investment resources.

That Supreme Decree No. 25201 regulates the application of article 35 of Law No. 1883 in article 18, and establishes that the Board of Directors of the BCB, through an express resolution, must annually set the maximum limit for foreign investments.

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That article 26 of the BCB Statute provides that the Board of Directors rules on matters within its competence through resolutions or decisions that shall be expressly recorded in the minutes. Every draft Board Resolution must be motivated and justified by a technical report from the Management or Managements to whom the subject matter of the resolution corresponds and by a report from the Legal Affairs Management (GAL).

That the Economic Policy Advisory, in its Technical Report BCB-APEC-SIE-INF-2022-2, recommends establishing the percentage of five percent (5%) as the maximum limit for foreign investments for Insurance Companies valid for the 2022 fiscal year.

That the Legal Affairs Management, in its Report BCB-GAL-SANO-DLBCI-INF-2022-11, concludes that the proposal from APEC for the 2022 fiscal year, regarding the maximum limit of foreign investment for Insurance Companies at five percent (5%) of their investment resources, does not contravene the current legal framework; therefore, it recommends the approval by the Board of Directors of the BCB.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Approve for the 2022 fiscal year, the maximum limit of foreign investment for Insurance companies of five percent (5%) of their investment resources, within the framework of the attribution conferred by article 35 of Law No. 1883, of June 25, 1998, and article 18 of Supreme Decree No. 25201, of October 16, 1998.

Article 2.- Notify the Supervisory Authority of Pensions and Insurance (APS) of this Board Resolution, so that within the framework of its attributions and functions, it transmits to Insurance companies the determination adopted in the preceding article.

Article 3.- Board Resolution No. 019/2021 of January 21, 2021, is hereby repealed.

Article 4.- This Resolution shall enter into force from its approval.

Article 5.- The Presidency and the General Management are charged with the execution and compliance of this Resolution.

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La Paz, January 18, 2022

SIGNED. ROGER EDWIN ROJAS ULO, Oscar Ferrufino Morro, Gabriel Herbas Camacho, Gumercindo Héctor Pino Guzmán, Diego Alejandro Pérez Cueto Eulet.