Regulatory Alerts2018-02-27 | CD-SIBOIF-1043-2-FEB27-2018Added · Updated
Norm for the Distribution of Profits of Insurance, Reinsurance, and Surety Companies
The Superintendence of Banks and Other Financial Institutions issued Resolution No. CD-SIBOIF-1043-2-FEB27-2018 to regulate profit distribution by insurance, reinsurance, and surety companies. The norm requires entities to obtain prior authorization from the Superintendent and meet specific financial thresholds, including a solvency margin index of at least 2.5 times the Required Minimum Capital and a financial liquidity ratio greater than 15%. It caps distributable profits by mandating that 15% of current year profits be allocated to capital reserves and 50% of unearned premium reserves be retained. The regulation also defines the scope of authorized entities and establishes conditions for distributing profits in shares or cash.