Central Bank of Bolivia

Board of Directors

BOARD RESOLUTION NO. 019/2021

SUBJECT:

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

VIEWING:

• Law No. 1670 of October 31, 1995, of the Central Bank of Bolivia.
• Law No. 1883 of June 25, 1998, on Insurance.
• Supreme Decree No. 25201 of October 16, 1998, which approves the Regulation of Law No. 1883.
• Report from the Economic Policy Advisory BCB-APEC-SIE-INF-2021-1 of January 14, 2021.

CONSIDERING:

That Law No. 1670 of October 31, 1995, 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 policies and specialized regulations of general application and internal norms, as well as establishing administrative, operational, and financial strategies. To this end, the Board of Directors is empowered to adopt general decisions that may be necessary for the BCB to fulfill its functions, competencies, and powers assigned by the Law, as well as to assume the attributions necessary for the fulfillment of its functions. This aspect is consistent with what is provided for in numbers 1 and 7 of article 11 of the BCB Statute.

That Law No. 1883 of June 25, 1998, in its article 35, establishes that the Central Bank of Bolivia (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 of October 16, 1998, which among other things, regulates the application of article 35 of Law No. 1883; in its article 18, determines that the Board of Directors of the Central Bank of Bolivia, through an express Resolution, must annually set the maximum limit for foreign investments by Insurance Companies.

That the Statute of the Central Bank of Bolivia, in its article 26, determines that the Board of Directors pronounces itself on matters within its competence through resolutions. It may also do so through decisions that will be expressly recorded in the minutes. Every draft resolution of the Board of Directors must be motivated and justified by a technical report from the Management or Managements to which the subject matter of the resolution corresponds and by a report from the Legal Affairs Management. These reports must be sent to the Board of Directors by the General Management with its recommendation, except in technical matters corresponding to the Economic Policy Advisory, which may submit reports to the Board of Directors with its own recommendation.

That the Economic Policy Advisory in its Technical Report BCB-APEC-SIE-INF-2021-1, recommends establishing the percentage of five percent (5%) as the maximum limit for foreign investments for Insurance Companies valid for the 2021 fiscal year.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Determine for the 2021 fiscal year, the maximum limit of investment abroad 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 Pension and Insurance Supervisory Authority (APS) of this Board Resolution, so that, within the framework of its attributions and functions:

1. Transmit to the Insurance Companies the determination adopted in the preceding article; and,
2. Establish a term of three (3) months computable from January 21, 2021, for Insurance Companies that exceed five percent (5%) of investments abroad of their investment resources, to adapt to the maximum limit of investments fixed for the 2021 fiscal year, by the Board of Directors of the Central Bank of Bolivia in compliance with article 35 of Law No. 1883 of June 25, 1998, and article 18 of Supreme Decree No. 25201 of October 16, 1998.

Article 3.- Resolution No. 007/2020 of January 7, 2020, is hereby repealed.

Article 4.- This Resolution shall enter into force from January 26, 2021.

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

La Paz, January 21, 2021

Edwin Rojas Ulo Rafael Boyan Téllez Bismarck Arevilca Vásquez Darwin Ugarte Ontiveros