Norm for the Implementation of the Accounting Framework for Insurance, Reinsurance, and Surety Companies

Page 1 of 4 Resolution No. CD-SIBOIF-1028-1-NOV21-2017 Dated November 21, 2017

NORM FOR THE IMPLEMENTATION OF THE ACCOUNTING FRAMEWORK FOR INSURANCE, REINSURANCE, AND SURETY COMPANIES

The Board of Directors of the Superintendence of Banks and Other Financial Institutions,

CONSIDERING

I

That Article 10, item 1 of Law No. 316, Law of the Superintendence of Banks and Other Financial Institutions, published in La Gaceta, Official Journal No. 196, of October 14, 1999, and its amendments, establishes that it is the responsibility of the Board of Directors of the Superintendence of Banks and Other Financial Institutions to issue general norms to strengthen and preserve public security and confidence in institutions under the supervision, oversight, and audit of the Superintendence of Banks and Other Financial Institutions.

II

That by Resolution No. CD-SIBOIF-465-3-FEB7-2007, dated February 7, 2007, published in La Gaceta No. 69 of April 13, 2007; the "Single Chart of Accounts Manual for Insurance, Reinsurance, and Surety Companies" was approved.

III

That it is necessary to update the aforementioned accounting framework based on International Financial Reporting Standards (IFRS), which are globally recognized and based on reasonably articulated principles, and on the norms issued by this Superintendence, applicable to the aforementioned institutions.

IV

That in accordance with the considerations expressed above and based on the authority established in Article 3, item 13) of Law No. 316, Law of the Superintendence of Banks and Other Financial Institutions, and its amendments.

In exercise of its powers,

HAS ISSUED

The following:

Resolution No. CD-SIBOIF-1028-1-NOV21-2017

Page 2 of 4

NORM FOR THE IMPLEMENTATION OF THE ACCOUNTING FRAMEWORK FOR INSURANCE, REINSURANCE, AND SURETY COMPANIES

CHAPTER I CONCEPTS, OBJECT, AND SCOPE

Article 1. Concepts.- For the purposes of this norm, the terms indicated in this article, whether in uppercase or lowercase, singular or plural, shall have the following meanings:

a) Insurance, Reinsurance, and Surety Companies: Insurance, reinsurance, and surety companies subject to the supervision of the Superintendence of Banks and Other Financial Institutions.

b) Accounting Framework: Uniform system of accounting records for insurance, reinsurance, and surety companies, which allows the financial statements they prepare to be presented in a homogeneous manner and to adequately reflect their financial, equity, and management results.

c) Superintendence: Superintendence of Banks and Other Financial Institutions.

d) Superintendent: Superintendent of Banks and Other Financial Institutions.

Article 2. Object and Scope.- The purpose of this norm is to approve the "Accounting Framework for Insurance, Reinsurance, and Surety Companies," based on: International Financial Reporting Standards (IFRS); and the norms issued by the Superintendence, applicable to the aforementioned institutions; which is contained in the Annex of this norm, being an integral part of it.

CHAPTER II IMPLEMENTATION PHASES OF THE ACCOUNTING FRAMEWORK

Article 3. Guidelines for Implementation.- Insurance, reinsurance, and surety companies must implement the Accounting Framework during a transition period from January 1 to December 31, 2018, in order to establish comparability with the 2019 period; and its adoption starting January 1, 2019.

Article 4. Progress Reports on Activities for Implementation of the Accounting Framework.- Insurance, reinsurance, and surety companies must report, upon request by the Superintendent, the progress of implementation activities for both their transition period and their adoption.

Article 5. Implementation of the Accounting Framework with IFRS 17.- 1 Insurance, reinsurance, and surety companies must adopt and implement all matters concerning IFRS 17 "Insurance Contracts," for which the Superintendent will define the general guidelines to be complied with by said companies, as well as the transition period, definitive convergence date, and other necessary aspects for the adoption and implementation of the aforementioned norm. 1 Art. 5, amended on December 10, 2024 - Resolution CD-SIBOIF-1482-1-DIC10-2024 Art. 5, amended on November 22, 2022 - Resolution CD-SIBOIF-1346-4-NOV22-2022 Art. 5, amended on December 9, 2020 - Resolution CD-SIBOIF-1219-1-DIC09-2020

Page 3 of 4 to be complied with by said companies, as well as the transition period, definitive convergence date, and other necessary aspects for the adoption and implementation of the aforementioned norm.

CHAPTER III RESPONSIBILITIES OF THE BOARD OF DIRECTORS

Article 6. Responsibilities of the Board of Directors.- The Board of Directors of the institution shall have, among others, the following responsibilities:

a) Approve the implementation plan for the accounting framework;

b) Approve changes or adjustments to their manuals, policies, operational procedures, models, internal control, and other topics related to the Accounting Framework established in this norm;

c) Guarantee the human, technological, financial, and other resources necessary for the adoption of the Accounting Framework; and

d) Ensure that the implementation activities of the Accounting Framework are carried out in a timely and proper manner to ensure compliance with what is established in this norm.

CHAPTER IV EXCLUSIONS AND TRANSITION ADJUSTMENTS

Article 7. Exclusions.- While there is no express authorization from the Superintendence and regulatory provisions, insurance, reinsurance, and surety companies shall not carry out Securities Lending operations within the Accounting Framework.

Insurance, reinsurance, and surety companies may only carry out operations that the law or corresponding regulation allows them to perform, complying with the respective procedures when the law indicates that any operation requires the authorization of the Superintendent.

Article 8. Transition Adjustments.- Adjustments generated by the first-time application of the accounting framework and recorded as transition adjustments may only be recognized as accumulated results when the asset or liability that generated them has been realized (sold, received, or all cash flows paid), except for the following operations: labor indemnification and gains from sales with financing of adjudicated assets; such adjustments must be recognized in accumulated results.

CHAPTER V FINAL PROVISIONS

Article 9. Authority of the Superintendent.- The Superintendent is authorized to approve changes or modifications that prove necessary for the adaptation and updating of the annex of this norm; being able to issue additional instructions for its correct application, and must inform the Board of Directors of the Superintendence.

Article 10. Repeal.- From January 1, 2019, the Norm on the Single Chart of Accounts for Insurance, Reinsurance, and Surety Companies, contained in Resolution No. CD-SIBOIF-465-3-FEBR7-2007, dated February 7, 2007, published in La Gaceta, Official Journal No. 69, of April 13, 2007, is repealed.

Article 11. Effectiveness.- This norm shall enter into force upon its notification, without prejudice to its publication in La Gaceta, Official Journal. The Accounting Framework annexed to this norm is exempt from said publication, which will be available on the website of the Superintendence. (f) S. Rosales C. (f) M. Díaz O. (f) Gabriel Pasos Lacayo (f) Fausto Reyes B. (f) illegible (Silvio Moisés Casco Marenco) (f) illegible (Freddy José Blandón Argeñal) (f) illegible (José Edelberto Zelaya Castillo) Ad Hoc Secretary.

EDELBERTO ZELAYA CASTILLO Ad Hoc Secretary SIBOIF Board of Directors