Insurance and Reinsurance Regulations - Modifications based on Law No. 20,130 of May 2, 2023

Montevideo, November 23, 2023
Ref: INSURANCE AND REINSURANCE REGULATIONS - Modifications based on Law No. 20,130 of May 2, 2023.

The market is informed that the Superintendency of Financial Services adopted the following resolution in November 2023:

1. SUBSTITUTE in Title I BIS - Minimum Capital, of Book II - Stability and Solvency, Article 20 with the following:

ARTICLE 20 (MINIMUM CAPITAL - GROUP II).
The Minimum Capital, to operate in the insurance activity of Group II, is set at the greater of the two parameters determined below:

A. BASIC CAPITAL
The basic capital will be an amount equivalent to the Basic Capital for a branch, determined in the previous article.
Insurance companies wishing to underwrite contracts for collective disability and death insurance and retirement insurance for the payment of benefits under the mandatory individual savings regime (articles 56, 57 and 59 of Law No. 16,713 of September 3, 1995 and amendments) must demonstrate an additional Basic Capital equivalent in national currency to UI 6,400,000 (six million four hundred thousand indexed units), which will be updated quarterly to the value of the indexed unit valid on the last day of each calendar quarter.

B. SOLVENCY MARGIN
The Solvency Margin will be the sum of the following results:

1. For Personal Insurances that do not generate mathematical reserves, the amount resulting from applying the rules established in literal B. of Article 19 for Group I Insurances.
   For the purposes of applying what is provided in literal B. i. c. of the aforementioned Article 19, in the case where the insured capital is the obligation to pay an annuity, it must be computed as a paid claim, only once and in the month of reporting, the actuarial present value of the annuities to be paid. In this situation, claims borne by the reinsurer will be computed by the fraction of the actuarial present value borne by them, according to the respective reinsurance contract. Premiums, claims, and reserves (literals a. to e. of Article 31) corresponding to Collective Disability and Death Insurance will be computed in the same way as those referred to Personal Insurances that do not generate mathematical reserve.

2. For Personal Insurances that generate mathematical reserves, the sum of:
   a. 4% (four percent) of the total mathematical reserves of direct insurance and active reinsurance and of the liquidated claims payable reserve for collective disability and death insurance corresponding to the temporary subsidy for partial incapacity (numeral i. of literal a. of Article 31), multiplied by the ratio between own-conservation mathematical reserves and totals, which cannot be less than 85% (eighty-five percent). b. 3‰ (three per thousand) of non-negative risk capitals multiplied by the ratio existing between own-conservation risk capitals and totals, which cannot be less than 50% (fifty percent).

3. SUBSTITUTE in Chapter II - Pensional Insurances, of Title II - Technical Reserves, of Book II - Stability and Solvency, Articles 31, 33, 34 and 35 with the following:

ARTICLE 31 (TECHNICAL RESERVES OF COLLECTIVE DISABILITY AND DEATH INSURANCE).
Insurance companies operating the coverage of collective disability and death insurance (temporary subsidy for partial incapacity and balance insufficiency) provided for in articles 57 and 59 of Law No. 16,713 of September 3, 1995 and amendments, must constitute the different classes of reserves indicated below:

a. Liquidated Claims Payable Reserve:
It will be constituted over those claims whose pensional benefits defined in articles 57 and 59 of Law No. 16,713 have been liquidated and for which the insurance company is making, or will make, the payment of the corresponding benefits, according to the following:
i. Temporary subsidy for partial incapacity: The value of said reserve will be calculated for each of the liquidated claims and will be equivalent to the actuarial present value of the benefit to be paid during the period in which it must be paid. The actuarial present value must be established in adjustable units. For the purposes of said calculation, the characteristics of current beneficiaries must be considered: sex, age, payment term of benefits, etc.;
ii. Balance insufficiency: It will be determined for each claim as the difference between the actuarial present value of the monthly benefit to be paid to the insured or beneficiary, which will be informed by the insurance company responsible for serving said monthly benefit, and the accumulated balance in the individual savings account.
The value of the liquidated claims payable reserve may never be decreased by the application of reinsurance contracts.

b. Pending Liquidation Claims Reserve:
It will be constituted over those claims reported to the insurance company and whose benefits defined in articles 57 and 59 of Law No. 16,713 are, for any reason, pending liquidation and consequently no payment has yet been made in concept of benefit.
i. Temporary subsidy for partial incapacity: The value of said reserve will be calculated for each of the claims and will be equivalent to the actuarial present value of the benefit estimated to be paid.
ii. Balance insufficiency: It will be determined for each claim as the difference between the actuarial present value of the monthly benefit estimated to correspond to be paid to the insured or beneficiary and the accumulated balance in the individual savings account.
In cases where available information is insufficient, the insurance company must base its calculations on duly substantiated estimates.
The pending liquidation claims reserve must be constituted according to the following criteria:

1. In case of death, upon receiving the respective communication from the Social Security Bank or the pension fund administrator.
2. In case of incapacity, upon receiving the communication from the Social Security Bank informing of the request filed by the insured and for an amount equivalent to 50% (fifty percent) of the estimated actuarial present value to be paid.
3. Upon the Board of Directors of the Social Security Bank issuing the pertinent resolution approving the incapacity, the reserve must be increased to 100% (one hundred percent) of the estimated actuarial present value to be paid.
4. The amount constituted by applying numeral 2 above may only be released after 2 (two) years have passed since the notification from the Social Security Bank regarding the request without a resolution having been adopted regarding it, or when the Board of Directors of the Social Security Bank issues a resolution denying the benefit, and provided that it is definitive (not subject to appeal).

c. Occurred but Not Sufficiently Reported Claims Reserve
The Occurred but Not Sufficiently Reported Claims Reserve is constituted with the objective of covering the eventual deficiency of the liability originated in the lack of information mentioned in the previous literal. Said reserve, which must be calculated monthly using appropriate techniques, must be constituted for an amount not less than 5% (five percent) of the amount calculated in concept of Pending Liquidation Claims Reserve.

d. Occurred but Not Reported Claims Reserve
The Occurred but Not Reported Claims Reserve must be constituted for those claims that as of the calculation date have occurred but have not yet been reported to the insurance company. The value of said reserve, which must be calculated monthly using appropriate techniques, in no case can be lower than 10% (ten percent) of the premiums issued in concept of collective disability and death insurance in the last year prior to the calculation date.

e. Calculation Insufficiency Reserve
This reserve must be constituted considering that there are different situations, which could modify the previously obtained actuarial present values, that result difficult to estimate. The value of said reserve, which must be calculated monthly using appropriate techniques, in no case can be lower than 5% (five percent) of the sum of the values corresponding to the previously defined reserves. Separately from the estimation of the reserves detailed in literals b., c. and d., the reinsurer's participation will be calculated considering the corresponding reinsurance contracts, provided they permanently meet the conditions established in Title VI. The calculated amounts will be exposed in regularization accounts of the constituted reserve. Non-proportional reinsurance contracts will be computed provided the amount can be established precisely and its determination is adequately substantiated and available to the Superintendency of Financial Services. TRANSITIONAL PROVISION disposed by Circulars No. 2,362 and 2,363 of dates November 12 and 19, 2020, respectively:
The aforementioned transitional provision remains in force in all its terms:
“Insurance companies may adapt to the modifications provided for in literals c., d. and e. above within a period of ten years counted from the effective date.
To these effects, at the close of the 2021 exercise, the relationship between its accounting balance and the amount of the reserve according to the regime established in this article must be determined -for each type of reserve-. In case said relationship (R) is less than 1, from January 1, 2022 it must:
a. calculate the amount of each reserve according to the frequency and method provided for in this article, and b. record an adjustment such that, at the close of each month, the accounting balance of each reserve is, at minimum, equal to the amount determined in a. multiplied by an adaptation factor (F). The adaptation factor will be:
F = R + [ (1 – R) / 120 ] x M
M will be equal to 1 in January 2022, 2 in February 2022, 3 in March 2022 and so on until reaching 120 in December 2031.
From the information corresponding to March 31, 2022, the reserve requirement according to the current regime, the accounting balance of the reserve, and the percentage pending constitution must be indicated in notes to the financial statements.”

ARTICLE 33 (COLLECTIVE DISABILITY AND DEATH INSURANCE - TECHNICAL BASES FOR THE CALCULATION OF ACTUARIAL PRESENT VALUES).
The Technical Bases to be used for the calculation of actuarial present values are:
a. General mortality tables and mortality tables for disabled persons, by age and sex, which will be communicated by the Superintendency of Financial Services, which will be updated annually with effect from January 1st of each year. b. The reference yield curve established in Article 36.1, valid on the date of initial constitution of the reserve.

ARTICLE 34 (RESERVES OF PENSIONAL ANNUITY INSURANCES).
Insurance companies operating the coverage of life annuities and temporary annuities referred to in articles 97 and following of this Compilation must constitute a mathematical reserve for each policy issued equivalent to the actuarial present value of the monthly benefit to be paid to the insured and their potential beneficiaries, if applicable. The actuarial present value must be established in Adjustable Units, at minimum, at the close of each month, and may never be decreased, in any case, by the application of reinsurance contracts. For the purposes of calculating the actuarial present value, the characteristics of the insured and possible beneficiaries - if applicable - must be considered: sex, age, status - disabled or not -, pension assignment, and the payment term of benefits. Likewise, a calculation insufficiency reserve must be constituted considering that there are different situations that could modify the previously obtained actuarial present values, that result difficult to estimate, such as: appearance of new beneficiaries, possible disability of the unmarried child under 21 years old, changes in current family situation, etc. The value of said reserve, which must be calculated monthly using appropriate techniques, in no case can be lower than 5% (five percent) of the constituted mathematical reserve. TRANSITIONAL PROVISION disposed by Circulars No. 2,362 and 2,363 of dates November 12 and 19, 2020, respectively: The aforementioned transitional provision remains in force in all its terms:
“Insurance companies may adapt to what is provided regarding the calculation insufficiency reserve within a period of ten years counted from the effective date. To these effects, at the close of the 2021 exercise, the relationship between the accounting balance of said reserve and its amount according to the regime established in this article must be determined. In case said relationship (R) is less than 1, from January 1, 2022 it must:
a. calculate the amount of the reserve according to the frequency and method provided for in this article, and b. record an adjustment such that, at the close of each month, the accounting balance of the reserve is, at minimum, equal to the amount determined in a. multiplied by an adaptation factor (F). The adaptation factor will be:
F = R + [ (1 – R) / 120 ] x M
M will be equal to 1 in January 2022, 2 in February 2022, 3 in March 2022 and so on until reaching 120 in December 2031.
From the information corresponding to March 31, 2022, the reserve requirement according to the current regime, the accounting balance of the reserve, and the percentage pending constitution must be indicated in notes to the financial statements.”

ARTICLE 35 (PENSIONAL ANNUITY INSURANCES - TECHNICAL BASES FOR THE CALCULATION OF ACTUARIAL PRESENT VALUES).
The Technical Bases to be used for the calculation of actuarial present values are:
a. General mortality tables and mortality tables for disabled persons, by age and sex, which will be communicated by the Superintendency of Financial Services, which will be updated annually with effect from January 1st of each year. b. The annual interest rate in Adjustable Units offered by the insurer, which arises from equating the benefits to be paid to the insured and their potential beneficiaries with the accumulated balance in the individual account on the date of transfer of funds. This rate will apply whenever the reserve thus determined is greater than that resulting from applying the reference yield curve established in Article 36.1 valid on the date of initial constitution of the reserve. Otherwise, the aforementioned curve must be used. To perform the aforementioned reserve calculations, what is established in Article 34 will be considered, using the mortality tables referred to in the preceding literal a.

3. SUBSTITUTE in Chapter I – General Provisions, of Title III – Investments, of Book II - Stability and Solvency, Article 45 with the following:

ARTICLE 45 (PRIMARY MARKET).
Investments in the framework of literals A and D. of Article 49, and A. and F. of Article 53 may be acquired in the primary market.
Investments in the framework of literal B. of Articles 49 and 53 may be acquired in the primary market, provided they meet the following conditions:
a. There is a public offer of securities to which all insurers are invited. b. That they have been rated by institutions registered in the Securities Market Register. When dealing with issuances placed directly by the issuer or a placement agent, in addition to the conditions previously provided, the following requirements must also be met:

1. Existence of a placement procedure where all insurers have equal access;

2. In case of excess demand over the total issuance, the issuer must commit to:
   – When dealing with placement procedures by quantity at a single price, to allocate it pro rata to all requests made.
   – When dealing with bidding procedures by price, to allocate the excess demand at the closing price pro rata to the requests made at said price.
   Investments in the framework of literal D) of Article 53 may be acquired in the primary market, provided they meet the following conditions:
   a. That they have been rated by institutions registered in the Securities Market Register. b. That they quote on some local or foreign formal market,
   c. That they have information on their public quotation without restrictions for access to it, on a daily basis.

3. SUBSTITUTE in Chapter III - Pensional Insurances, of Title III – Investments, of Book II - Stability and Solvency, Article 53 with the following:

ARTICLE 53 (INVESTMENTS ADMITTED AS COVERAGE OF PENSIONAL OBLIGATIONS).
Pensional obligations will be constituted by:

• pensional technical reserves.
• debts with insured persons for pensional insurances.
• other pensional obligations (creditor balances of current accounts for passive reinsurance of pensional insurances and deposits in guarantee for passive reinsurance corresponding to pensional insurances).
  All of them must be fully covered with investments in the following assets:

A. Securities issued by the Uruguayan State and by the Central Bank of Uruguay.
Securities issued by the Central Government and by Departmental Governments will be considered securities issued by the Uruguayan State.

B. Securities issued by Public or Private Companies, Financial Trusts and Investment Funds, Uruguayan.
The instruments provided for in this literal must meet the following requirements:
a. be registered in the Securities Market Register. b. quote on some local formal market registered in the Securities Market Register or on some foreign formal market, having to have information on their public quotation without restrictions for access to it, on a daily basis.
c. have a risk rating issued by rating institutions registered in the Securities Market Register. The rating cannot be lower than that corresponding to Category 2, according to the definition given by Article 50.
The existence of a minimum rating does not exempt insurance companies from their responsibilities and obligations regarding the good administration of their assets. d. be enabled by the Central Bank of Uruguay, as an instrument suitable to be acquired by a Pension Savings Fund.

C. Deposits, including certificates of deposit, in national or foreign currency, in the Central Bank of Uruguay and in financial intermediation institutions installed in the country.

D. Fixed income securities issued by international credit organizations or by foreign governments, of very high credit rating.
International credit organizations will be considered those supranational institutions whose shareholding structure is composed of sovereign States or governmental organisms. Securities issued by foreign governments will be considered those issued by National Governments, Central Banks, and State or Municipal Administrations of third countries. For the purposes of carrying out investments in fixed income securities issued by international credit organizations, or foreign governments, insurance companies must request authorization from the Superintendency of Financial Services, to which effects they must present the following information:
a. documentation accrediting the conditions provided for by Article 66 of the Compilation of Rules for the Control of Pensional Funds; b. complete information on the terms and conditions of the titles to be acquired, including the plaza where they are registered, the formal market in which they quote, term, currencies of issuance, yield, eventual guarantees, and other characteristics established in the corresponding issuance document;
c. risk rating opinion of the securities.
The Superintendency of Financial Services may require additional documentation and information to that indicated previously when it deems pertinent, to adopt a founded decision on the authorization request. Additionally, the instruments provided for in the present literal must meet the following requirements:

a) quote in some local or foreign formal market, having information about its public quotation without restrictions for access to it, on a daily basis, b) in the case of fixed income securities issued by foreign governments, having a risk rating not lower than Category 2, according to the definition given in article 50. The existence of a minimum rating does not exempt insurance companies from their responsibilities and obligations regarding the good management of their assets. TRANSITIONAL PROVISION:
For the purposes of compliance with these requirements, securities acquired prior to the entry into force of this resolution will not be considered.
E. Financial instruments issued by Uruguayan or foreign institutions of very high credit rating that have as their object the coverage of financial risks.
To this effect, insurance companies shall proceed in accordance with the provisions established below:
a. (Definition of coverage) Coverage of an observable and measurable risk shall be understood as assuming a position - or combination of positions - in financial instruments, which produce results that vary inversely with the results of the elements whose risks are intended to be covered. b. (Authorization request) Prior authorization from the Superintendence of Financial Services must be requested to the extent that hedging operations require the constitution of guarantees on the assets backing pension obligations.
c. (Foreign currency forward operations - Definition of net
position) Net forward position shall be understood as the difference between forward purchase operations and forward sale operations. d. For the purpose of investing in financial instruments issued by foreign institutions that have as their object the coverage of financial risks of the insurance company, the referred institutions must have an international risk rating not lower than Category 1, according to the definition given in article 50. F. Placements in personal loans to affiliates and beneficiaries of the social security system, for a term of up to two years and interest rate not

lower than the evolution of the Average Wage Index over the last twelve months, plus 5 (five) percentage points.
The maximum of the loan under these conditions cannot exceed six wages of activity or passivity. Such loans will be granted through public or private institutions selected by the insurance company for this purpose, who must guarantee the fulfillment of the obligations assumed by the borrowers. In cases where the established minimum interest results in a rate higher than the maximum interest set by Law No. 18.212 of December 5, 2007, the latter shall prevail. For the purpose of insurance companies being able to make the investments detailed above, they must proceed in accordance with the provisions established in article 54.
5. SUBSTITUTE in Title VII – Files, of Book II – Stability and solvency, article
66.2 with the following:
ARTICLE 66.2 (PENSION FILE).
Insurance companies authorized to operate pension insurance must open a file for each pension benefit that is managed, which must contain the following documentation:
a) Copy of the resolution of the Social Security Bank. b) Updated summary of the individual savings account balance of the affiliate at the pension administrator on the date of determination of the benefit. c) Calculation of the initial allocation corresponding (common retirement or advanced age retirement, total disability retirement, temporary subsidy for partial disability or survivor pension) and their recalculation. d) Value of the initial balance insufficiency determined, when applicable. e) Record of account transfer and subsequent supplements. f) Service computation form issued by the Social Security Bank. g) Copy signed by the beneficiary or beneficiaries of the notification of the calculation referred to in point c). h) Any other documentation related to the benefit being processed.

In the calculation of the benefit, the following must appear, when applicable:

• The detail of the months without contribution and the reasons that originated their
  inclusion in the average of computable allocations.
• If periods of compensated inactivity have been computed (article
  36 of Decree No. 125/996 of April 1, 1996).
• The number of months considered for the average.

6. RENAME Title II - Collective insurance for disability and death, pension
   annuity and compulsory civil liability insurance, of Book IV - Protection of the user of financial services, which will be called Title II - Collective insurance for disability and death, pension annuity insurance and compulsory civil liability insurance.
7. RENAME Chapter I - Collective insurance for disability and death, of the
   Title II - Collective insurance for disability and death, pension annuity insurance and compulsory civil liability insurance, of Book IV – Protection of the user of financial services, which will be called
   Chapter I - Collective insurance for disability and death.
8. SUBSTITUTE in Chapter I - Collective insurance for disability and death, of the
   Title II - Collective insurance for disability and death, pension annuity insurance and compulsory civil liability insurance, of Book IV - Protection of the user of financial services, articles 87, 88, 89, 90, 91, 92 and 94 with the following:
   ARTICLE 87 (MINIMUM MENTIONS).
   The Collective Disability and Death Insurance that, pursuant to articles 57 and 59 of Law No. 16.713 of September 3, 1995, in the wording given by articles 97 and 100 of Law No. 20.130 of May 2, 2023, must be contracted by Pension Fund Administrators, must be instrumented in a public deed or in a private document with certification of signatures and duly notarized by a Public Notary, and shall contain at least the following mentions:
9. Name of the Pension Fund Administrator and the
   insurance company, with identification of their respective legal representatives.
10. Date of celebration of the contract.
11. Start and end dates of the coverage.
12. The risks covered.
13. The insurance premium.
14. Method by which the Administrator will provide to the company

insurance company, monthly, the list of affiliates, the salaries of contribution to the individual savings scheme and the accumulated savings of each of its affiliates.
7. Indication that the insurer knows and accepts that the calculation
of the minimum benefits referred to in literal b. of article 89 and the determination of the sufficiency of balances indicated therein will be carried out by the insurance company responsible for serving the benefit and that it will accept the settlement of the amount of the indemnification that said insurer carries out, provided that it complies with the legally and regulatory defined parameters. All policies of the Collective Disability and Death Insurance must be signed by both contracting parties.
ARTICLE 88 (DEFINITIONS).
For the purposes of the Collective Disability and Death Insurance, the terms used in the policy texts shall be understood in the sense that these are given by Laws No. 16.713 and No. 20.130 and their regulatory norms.
ARTICLE 89 (COVERED RISKS).
The insurance company undertakes to pay indemnities derived from the following accidents, as applicable:
a. Partial disability of the affiliate. The benefit to be paid to the partially disabled person shall be determined in accordance with articles 59 of Law No.
16.713 and 21 of Decree No. 230/023 of August 1, 2023 and
it shall be paid for the term corresponding according to the current legal and regulatory norms. b. Insufficiency of affiliate account balances to generate the minimum benefits defined by Law No. 16713 of September 3, 1995 and amendments and its regulatory decrees regarding retirement for total disability and survivor pension for death in activity or in gain of the temporary subsidy for partial disability. The indemnity for balance insufficiency shall be paid to the insurance company responsible for serving the corresponding benefits through a single payment. For the purposes of the risks defined above, affiliate is understood as the worker incorporated into the mandatory individual savings retirement scheme established in Title IV of Law No. 16.713 through his affiliation to the Pension Fund Administrator that contracts the policy, at the time of occurrence of the accident.
ARTICLE 90 (VALIDITY - COVERAGE BASE).
The validity of the policy shall be for a term of 1 (one) year and cover the

accidents occurring during this period.
For the purposes of determining the coverages indicated in the literals a. and b. of article 89, accidents due to disability or death referred to shall be considered to have occurred on the date determined by the competent services.
ARTICLE 91 (PAYMENT OF BENEFITS).
The policy must provide that, once an accident has occurred, the insurance company shall pay the corresponding benefits in the form and time limit set forth in the corresponding regulatory norms. The benefit corresponding to the temporary insurance for partial disability shall be adjusted in accordance with article 60 of Law No. 16.713.
ARTICLE 92 (PREMIUM).
The premium for this insurance may be freely agreed upon by the parties and it must be expressed as a percentage of the monthly computable allocations on which contribution was made to the Pension Fund.
ARTICLE 94 (SUPPLY OF INFORMATION BY THE
PENSION FUND ADMINISTRATOR).
It is the obligation of the Pension Fund Administrator to provide the insurance company with the information that allows to appreciate correctly the risk that may influence the conditions of the contract. Regarding the benefit for partial disability, once the accident has occurred, it must make available to the insurance company the necessary background to prove said accident and allow its correct settlement, including the period during which it must be paid.
9. INCORPORATE in Chapter I - Collective insurance for disability and death, of the
Title II - Collective insurance for disability and death, pension annuity insurance and compulsory civil liability insurance, of Book IV - Protection of the user of financial services, the following articles:
ARTICLE 94.1 (SUPPLY OF INFORMATION BY THE INSURANCE COMPANY
RESPONSIBLE FOR SERVING THE BENEFIT TO THE
INSURANCE COMPANY THAT MUST COVER THE BALANCE INSUFFICIENCY).
Whenever the insurance company responsible for serving the benefit for total disability or survivor pension for death of the affiliate in activity or in gain of the temporary subsidy for partial disability finds an insufficiency in the accumulated balance in the affiliate's account with respect to the actuarial present value of the minimum legal benefit that corresponds to be paid in accordance with articles 53 and 59 of Law No. 16.713 and 64 of Law No. 20.130, it must provide to the insurance company that must cover the balance insufficiency the following information:

• Balance insufficiency to be covered
• Actuarial present value of the minimum legal benefit that corresponds
  to be paid
• Name and age of the insured or beneficiary
• Origin of the insufficiency: Retirement for total disability or survivor
  pension
  The actuarial present value referred to in the first paragraph of this article shall be determined in accordance with what is established in articles 94.2 and 94.3, as applicable.
  ARTICLE 94.2 (ACTUARIAL PRESENT VALUE OF THE TOTAL DISABILITY RETIREMENT BENEFIT).
  For the purposes of determining the balance insufficiency referred to in the first paragraph of article 94.1, regarding the total disability retirement benefit, the actuarial present value of the monthly benefit that corresponds to be paid to the insured or beneficiary (VAAjit) must be calculated from the following formula:
  RIjit: Initial rent of the total disability retirement calculated in accordance with article 101.4 Last age of the invalid persons mortality table.
  : Financial update factor at node , determined in function of the respective interest rate in each of the nodes, minus the corresponding insurer margin.
  : Survival probability of the totally and permanently disabled retiree from the retirement age until age .
  : Survival probability of the beneficiary of age and until age .

age and: Age of the beneficiary, which coincides with the age of the retiree at the moment of his retirement.
66%: Percentage of the retiree's rent received by the spouse beneficiary entitled to pension.
: Probability that a totally and permanently disabled affiliate has a beneficiary entitled to pension at the retirement age .
: Adjustment factor to consider monthly rent payments.
When the age of the insured - on the date of entry into force - is not exact, the probability of death and of leaving beneficiaries shall be calculated by linear interpolation between the values corresponding to the immediately preceding and immediately following whole ages, of the respective tables.
ARTICLE 94.3 (ACTUARIAL PRESENT VALUE OF THE PENSION FOR
DEATH OF THE AFFILIATE IN ACTIVITY OR IN GAIN OF THE TEMPORARY SUBSIDY FOR PARTIAL DISABILITY).
For the purposes of determining the balance insufficiency referred to in the first paragraph of article 94.1, regarding the survivor pension for death of the affiliate in activity or in gain of the temporary subsidy for partial disability, the actuarial present value of the monthly benefit must be calculated, according to the following formulas depending on whether it is an annuity or temporary:

1. Actuarial Present Value of the life annuity:
   : Benefit defined in the specific case being treated.
   : Financial update factor at node , determined in function of the respective interest rate, minus the corresponding insurer margin.
   Probability that there is a temporary beneficiary at the moment of the start of the rent of the principal beneficiary.

: Last age of the mortality table.
: Survival probability of the principal beneficiary retiree from age until age .
: Survival probability of the temporary beneficiary from age years until age .
: Adjustment factor for monthly payments.
: Adjustment factor = 1.00 if the benefit is defined for one head and 0.88 in case of two heads.
When the age of the insured - on the date of entry into force - is not exact, the probability of death and of leaving beneficiaries shall be calculated by linear interpolation between the values corresponding to the immediately preceding and immediately following whole ages, of the respective tables.
2) Actuarial Present Value of the temporary annuity
a) Actuarial Present Value of the temporary annuity with a single beneficiary:
: Benefit defined in the specific case being treated.
: Financial update factor at node , determined in function of the respective interest rate, minus the corresponding insurer margin.
: Term of the temporary annuity, taking the entry age rounded to the unit.
: Survival probability of the temporary beneficiary from age (rounded to the unit) until age .

b) Actuarial Present Value of temporary annuity with two beneficiaries:
: Benefit defined in the specific case being treated.
: Financial update factor at node , determined in function of the respective interest rate, minus the corresponding insurer margin.
: Term of the temporary annuities of the first beneficiary and second beneficiary, taking entry ages rounded to the unit, with .
: Survival probability of the first temporary beneficiary from age (rounded to the unit) until age .
: Survival probability of the second temporary beneficiary from age (rounded to the unit) until age .
: Adjustment factor that takes the value 0 if and 1 otherwise.
10. SUBSTITUTE in Chapter I - Collective insurance for disability and death, of the
Title II - Collective insurance for disability and death, pension annuity insurance and compulsory civil liability insurance, of Book IV - Protection of the user of financial services, article 96 with the following:
ARTICLE 96 (SUPPLEMENTARY NORMS).
The policy shall be governed, in addition to the minimum guidelines indicated in this, by the provisions contained in Laws Nos. 16.713 and
20.130 and their regulatory norms.
11. RENAME Chapter II - Life annuity insurance, of Title II - Collective
insurance for disability and death, pension annuity insurance and compulsory civil liability insurance, of Book IV - Protection of the user of financial services, which will be called Chapter II - Pension annuity insurance.

12. SUBSTITUTE in Chapter II - Pension annuity insurance, of Title II -
    Collective insurance for disability and death, pension annuity insurance and compulsory civil liability insurance, of Book IV - Protection of the user of financial services, articles 97, 98, 99, 100, 101, 101.1 and 101.2 with the following:
    ARTICLE 97 (MINIMUM MENTIONS).
    Pension annuity insurance shall contain, at minimum, the following mentions:
13. Name of the insured and the insurance company with
    identification of its legal representative
14. Date of celebration of the contract
15. Start date of the benefits and term, if
    applicable
16. Domicile of the contracting parties
17. Covered risk
18. Premium
19. Initial rent
20. Place of payment of the benefits
21. Interest rate
22. Method of adjustment of the benefit
23. Record that the insurance company assumes the
    risk emerging from the payment of the benefits of survivors that correspond.
24. Conditions to access survivor pension
    benefits.
    The contract must be signed by both contracting parties.
    ARTICLE 98 (DEFINITIONS).
    For the purposes of the insurance contracts referred to in article 97, the terms used in the policy texts shall be understood in the sense that these are given by Laws No. 16.713 of September 3, 1995 and amendments and No. 20.130 of May 2, 2023, and their regulatory norms.
    ARTICLE 99 (COVERED RISK).

The coverage granted by the insurance company for the contracting of the policies referred to in article 97 comprises the benefit of a monthly rent payable, as applicable, to:
a. The insured with common retirement cause or advanced age or the insured to whom the existence of total and absolute incapacity for all work has been accredited, while he lives. The benefits corresponding to common retirement or advanced age retirement shall be governed by articles 51 and 55 of Law No. 16.713, while total disability retirement shall be determined in accordance with articles 19 and 59 of said Law. b. The beneficiaries indicated in articles 55, 60 and 61 of Law No. 20.130, whether by the death of the common retiree or by advanced age, of the retiree to whom total and permanent disability has been decreed or of the affiliate in activity or in gain of the temporary subsidy for partial disability, for the terms established in articles 59 and following of the referenced Law. The corresponding benefits shall be determined in accordance with what is established in article 53 of Law No. 16.713 and articles 63 and following of Law No. 20.130. For the purposes of the risks defined above, affiliate is understood as the worker incorporated into the mandatory individual savings retirement scheme established in Title IV of Law No.
16.713 through his affiliation to the Pension Fund Administrator,
at the time of occurrence of the accident.
ARTICLE 100 (PREMIUM).
The price of this insurance shall be a single premium, payable in a single installment through the transfer of the accumulated balance of the individual savings account of the affiliate, either in total or for the amount necessary to cover the payment of the corresponding benefit, to the insurance company for which he, his legal representatives or heirs, as applicable, have opted. Such transfer shall be executed by the Pension Fund Administrator. The excesses that arise shall form
part of the estate of the deceased, in accordance with
article 58 bis of Law No. 16.713.
Once the benefit corresponding to total and permanent disability retirement has been calculated, if it proves insufficient to reach the legal minimums established in Law No. 16.713, the deficit shall be covered through the transfer of the missing amount by
part of the insurance company with which the Administrator
contracted the balance insufficiency coverage. The same procedure shall be followed regarding the survivor pension for death of the affiliate in activity or in gain of the temporary subsidy for partial disability.

Taxes on premiums due shall be deducted from the paid premium.
ARTICLE 101 (INITIAL RETIREMENT PENSION FOR COMMON AND ADVANCED-AGE RETIREMENT).
The initial retirement pension (RIj) determined as consideration for the balance accumulated in the insured's individual savings account must consider exclusively the following:
a) Said balance, previously reduced by applicable taxes. b) The life expectancy of the insured and the average beneficiary, according to general mortality tables by age, without distinction of sex, which will be communicated by the Financial Services Superintendence, and which will be updated annually effective January 1 of each year. c) The probability of leaving beneficiaries, according to the table, without distinction of sex, which will be communicated by the Financial Services Superintendence. d) The average age of the beneficiary, which will coincide with the retiree's age at the time of retirement. e) The respective interest rate referred to in Article 55 of Law No. 16.713 of September 3, 1995. For the determination of said rate, the reference yield curve indicated in Article 36.1 must be considered, at minimum, minus the corresponding margin of the insurer, which must contemplate the margin cap on profits established by regulation. For the calculation of the initial rent, the following formula must be used:
: Single premium of the pension annuity insurance referred to in Article 100.
Last age of the mortality table.

: Financial update factor at node , determined based on the respective interest rate at each node, minus the corresponding margin of the insurer.
: Survival probability of the retiree from retirement age to age .
: Survival probability of the beneficiary of age and until age . and: Age of the beneficiary, which coincides with the retiree's age at the time of retirement. 66%: Percentage of the retiree's rent received by the spouse beneficiary entitled to a pension. : Probability that an affiliate will have a beneficiary entitled to a pension at retirement age . : Adjustment factor to consider monthly rent payments. When the insured's age - on the effective date - is not exact, the probability of death and of leaving beneficiaries will be calculated by linear interpolation between the values corresponding to the immediately preceding and immediately following whole ages, from the respective tables.
ARTICLE 101.1 (PURE THEORETICAL RENT AND CORRESPONDING THEORETICAL MARGIN FOR COMMON AND ADVANCED-AGE RETIREMENT).
The pure theoretical rent (RTP) is the rent that a person could theoretically obtain by managing their own retirement by investing exclusively in minimum-risk securities. For its determination, except regarding the financial update factor, the formula of Article 101 must be applied with the parameters indicated therein. The financial update factor will be that resulting from applying the reference yield curve indicated in Article 36.1, without deductions. The theoretical margin is that which arises as the difference between the initial rent referred to in Article 101 and the pure theoretical rent, and is defined as:
Theoretical Margin = (1 - Initial Rent ) x 100 (in %) Pure Theoretical Rent The Financial Services Superintendence will communicate the pure theoretical rent semi-annually for the ages considered relevant.
ARTICLE 101.2 (PENSION RENT QUOTER).
Insurance companies that decide to offer in the market of life pension annuities must keep updated on their website a pension rent quoter containing information regarding the pension rent offered for common retirement or advanced-age retirement. The quoter must allow the issuance of a quotation form in which the value of the initial rent per 1,000 (one thousand) Uruguayan pesos of balance accumulated in the affiliate's individual savings account will be indicated. Said quotation will constitute a firm offer in the case of affiliates who have a certain retirement date, either by having completed the corresponding retirement procedure at the Social Prevision Bank or by having exercised the right to receive the benefits corresponding to the individual savings regime provided for in numeral 2) of Article 51 of Law No. 16.713 of September 3, 1995 and its amendments. Quotations delivered to the affiliate in other circumstances will be considered based on an estimated retirement date. The quotation form must contain the fields necessary to enter as a minimum the following information:
a. Identifying data of the affiliate: name, identity document, and age. b. The amount of the initial pension rent on the retirement date (certain or estimated, as the case may be) paid per 1,000 (one thousand) Uruguayan pesos of accumulated balance, as well as the effective value of the rent for the accumulated balance in the affiliate's individual savings account.
c. The pure theoretical rent on the retirement date (certain or estimated, as the case may be) per 1,000 (one thousand) Uruguayan pesos of accumulated balance, as established in Article 101.1.

d. The theoretical margin of the insurance company expressed as a percentage of the pure theoretical rent, determined in accordance with Article 101.1. e. The annual interest rate offered by the insurer, which arises from equating the rents to be paid by the life pension insurance, with the balance accumulated in the affiliate's individual savings account.
13. INCORPORATE into Chapter II - Pension Annuity Insurance, of Title II - Collective Disability and Death Insurance, Pension Annuity Insurance, and Compulsory Civil Liability Insurance, of Book IV - Protection of the User of Financial Services, the following articles:
ARTICLE 101.4 (INITIAL RETIREMENT PENSION FOR TOTAL DISABILITY).
The initial retirement pension for total disability (RIjit) determined as consideration for the balance accumulated in the insured's individual savings account will be determined as established in Articles 59 of Law No. 16.713 and 22 of Decree No. 230/023, as the greater value between:

1. 45% (forty-five percent) of the monthly average of computable allowances updated in accordance with the final clause of Article 27 of Law No. 16.713, on which contributions were made to the Pension Fund in the twenty best years of contribution. If twenty years of contribution are not reached, the updated average of the computable allowances effectively computed to the mandatory individual savings pillar will be taken.
2. The initial rent (RIjit) determined as consideration for the balance accumulated in the insured's individual savings account, which must consider exclusively the following:
   a) Said balance, previously reduced by applicable taxes. b) The life expectancy of the insured and the average beneficiary, according to mortality tables by age, without distinction of sex, which will be communicated by the Financial Services Superintendence, and which will be updated annually effective January 1 of each year. In the case of the insured, the mortality table for disabled persons must be applied, while for beneficiaries, the general mortality tables must be applied. c) The probability of leaving beneficiaries for disabled persons, according to the table, without distinction of sex, which will be communicated by the Financial Services Superintendence. d) The average age of the beneficiary, which will coincide with the retiree's age at the time of retirement. e) The respective interest rate referred to in Article 55 of Law No. 16.713 of September 3, 1995. For the determination of said rate, the reference yield curve indicated in Article 36.1 must be considered, at minimum, minus the corresponding margin of the insurer, which must contemplate the margin cap on profits established by regulation. For the calculation of the initial rent, the following formula must be used:
   : Single premium of the pension annuity insurance referred to in Article 100.
   Last age of the mortality table.
   : Financial update factor at node , determined based on the respective interest rate at each node, minus the corresponding margin of the insurer.
   : Survival probability of the disabled retiree from retirement age to age .
   : Survival probability of the beneficiary of age and until age . and: Age of the beneficiary, which coincides with the retiree's age at the time of retirement. 66%: Percentage of the retiree's rent received by the spouse beneficiary entitled to a pension.

: Probability that a disabled affiliate will have a beneficiary entitled to a pension at retirement age .
: Adjustment factor to consider monthly rent payments.
When the insured's age - on the effective date - is not exact, the probability of death and of leaving beneficiaries will be calculated by linear interpolation between the values corresponding to the immediately preceding and immediately following whole ages, from the respective tables. In the event that retirement for total disability is determined by what is indicated in numeral 1, the insurance company must request the insurance company responsible for providing the balance insufficiency coverage to transfer the missing amount. To this end, it must provide the information established in Article 94.1.
ARTICLE 101.5 (INITIAL RENT OF THE SURVIVOR PENSION).
The initial rent corresponding to the survivor pension due to the death of the deceased retiree or who was receiving the temporary subsidy for partial disability must be determined by applying the pension allocation percentage that corresponds - as established in Article 64 of Law No. 20.130 - to the last retirement allowance or subsidy, in accordance with the provisions of clause 2 of Article 63 of Law No. 20.130. The initial rent corresponding to the survivor pension due to the death of the active affiliate will be determined by applying the pension allocation percentage to the retirement or withdrawal that would have corresponded to the deceased on the date of their death, determined in accordance with Article 101, with a minimum equivalent to the allowance for total disability retirement established in Article 101.4. If the concurrence of beneficiaries indicated in literal A) of Article 64 of Law No. 20.130 is configured, the procedure indicated in Articles 67 and 68 of said norm must be followed. If a deficit is registered, the insurance company responsible for servicing the balance insufficiency insurance must be requested to transfer the missing amount. To this end, the information established in Article 94.1 must be provided.
14. SUBSTITUTE in Chapter II - Pension Annuity Insurance, of Title II - Collective Disability and Death Insurance, Pension Annuity Insurance, and Compulsory Civil Liability Insurance, of Book IV - Protection of the User of Financial Services, Articles 102, 103, 104, and 105 with the following:
ARTICLE 102 (PAYMENT DATES).
The payment dates of the initial rent and subsequent rents must be adapted to what is established in Laws No. 16.713 of September 3, 1995 and No. 20.130 of May 2, 2023, and their regulatory norms.
ARTICLE 103 (MINIMUM ADJUSTMENT OF BENEFITS).
The insurance company must adjust the amount of benefits in accordance with the provisions of Article 60 of Law No. 16.713 cited.
ARTICLE 104 (ADDITIONAL ADJUSTMENT OF BENEFITS).
The insurance company may provide, on a general and uniform basis, for the adjustment of benefit values in an amount greater than the minimum adjustment established in the preceding article. In this case, it must present to the Financial Services Superintendence for approval, the adjustment mechanism to be used and its justification within the Technical Bases that integrate its insurance plan. Once the additional benefit is paid, it will subsequently integrate the principal benefit and, therefore, must be adjusted based on the preceding article.
ARTICLE 105 (BENEFICIARIES).
Beneficiaries entitled to a pension are those persons, in full accordance with Articles 55, 60, and 61 of Law No. 20.130, who meet such quality at the time the policy is issued as those who acquire said condition subsequently. The pension allocation that corresponds in each case, as well as the payment period of the benefits, will be determined in accordance with the stipulations provided for in Laws Nos. 16.713 and 20.130, and their regulatory norms.
15. INCORPORATE into Chapter II - Pension Annuity Insurance, of Title II - Collective Disability and Death Insurance, Pension Annuity Insurance, and Compulsory Civil Liability Insurance, of Book IV - Protection of the User of Financial Services, the following article:
ARTICLE 106.1 (SUPPLY OF INFORMATION BY THE ADMINISTRATOR OF PENSION SAVINGS FUNDS).
It is the obligation of the Administrator of Pension Savings Funds to provide the insurance company with the information that allows correctly appreciating the risk that may influence the conditions of the contract. Likewise, once the claim has occurred, it must make available to the insurance company the necessary background to attest to said claim and allow its correct settlement.

16. SUBSTITUTE in Chapter II - Pension Annuity Insurance, of Title II - Collective Disability and Death Insurance, Pension Annuity Insurance, and Compulsory Civil Liability Insurance, of Book IV - Protection of the User of Financial Services, Articles 107, 108, and 109 with the following:
    ARTICLE 107 (DOCUMENTATION ON THE INSURED AND THEIR POTENTIAL BENEFICIARIES).
    At the time the insurance is contracted, the age and marital status of the insured, as well as all data relating to potential beneficiaries indicated in Articles 55, 60, and 61 of Law No. 20.130, if applicable, must be proven by reliable documentation.
    ARTICLE 108 (SUPPLEMENTARY NORMS).
    The life annuity and pension insurance contract will be governed by the provisions provided for in Laws Nos. 16.713 and 20.130, their regulatory norms, and the norms contained in this Compilation.
    ARTICLE 109 (INFORMATION TO THE INSURED OR BENEFICIARY/IES).
    The insurance company will supply the insured annually or, in the event of their death, to the beneficiary/ies, if applicable, information regarding the policy, which must include as a minimum:

• Name of the insured
• Names of the beneficiaries
• Policy number
• Information period
• Rents paid during the information period
• Monthly rent on the date of the information
• Adjustment factors applied in the reported period

17. EFFECTIVE DATE. The provisions in numerales 1 to 16 will be effective from December 1, 2023.
    JUAN PEDRO CANTERA
    Superintendent of Financial Services
    2023-50-1-01182