Norm on the Requirements for the Establishment of Insurance, Reinsurance, Surety Companies and Branches of Foreign Insurance Companies

Resolution No. CD-SIBOIF-665-1-FEB17-2011 Dated February 17, 2011

NORM ON THE REQUIREMENTS FOR THE ESTABLISHMENT OF INSURANCE, REINSURANCE, SURETY COMPANIES AND BRANCHES OF FOREIGN INSURANCE COMPANIES

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

CONSIDERS

I That Article 1 of Law 733, the General Law of Insurance, Reinsurance and Surety (LGS), states that the Superintendence of Banks and Other Financial Institutions (Superintendence) has the legal mandate to protect the interests of policyholders who entrust their premiums to insurance, reinsurance or surety companies (insurance companies) and their intermediaries, which are legally authorized and registered to carry out such operations.

II That in order for the Superintendence to fulfill its legal mandate to protect the interests of policyholders, it is necessary that, from the creation process of the future insurance company, the interested parties not only demonstrate the economic viability of the project, but also their solvency and integrity; as required by Article 10 of the LGS;

III That in addition to the aforementioned Article 10, Articles 11, 12, 13, 14, 15 and 16 of the LGS refer to the approval process of the application to establish an insurance company, as well as the requirements to be met to authorize its operation in cases where the application is approved;

IV That Article 20 of the LGS authorizes foreign insurance companies to operate in the country through the establishment of a branch, proceeding to regulate the authorization process and adherence to the laws of the country in Articles 21, 22, 23 and 24 of that same legal framework;

In exercise of its powers,

HAS ISSUED

The following:

NORM ON THE REQUIREMENTS FOR THE ESTABLISHMENT OF INSURANCE, REINSURANCE, SURETY COMPANIES AND BRANCHES OF FOREIGN INSURANCE COMPANIES Resolution No. CD-SIBOIF-665-1-FEB17-2011

CHAPTER I CONCEPTS, OBJECT AND SCOPE

Art. 1. Concepts.- For the purposes of application of the provisions contained in this norm, the terms indicated in this article, both in uppercase and lowercase, singular or plural, shall have the following meanings:

a) 5% Shareholder(s): Natural or legal person who, either individually or jointly with their related parties, intends to participate in the share capital of an insurance company in a percentage equal to or greater than 5% of said share capital.

b) Board of Directors: Board of Directors of the Superintendence of Banks and Other Financial Institutions.

c) LGS or General Insurance Law: Law 733, General Law of Insurance, Reinsurance and Surety, published in La Gaceta, Official Newspaper, No. 162, 163 and 164 of August 25, 26 and 27, 2010.

d) Insurance company: legal person that operates in insurance, reinsurance, surety and reinsuring, national or foreign, private, state or mixed ownership, except for the exceptions expressly contemplated in this norm.

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

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

Art. 2. Object and scope.- This norm aims to establish the requirements, procedures and processes for obtaining authorization for the establishment of insurance companies, and the establishment of branches of foreign insurance companies in the country.

CHAPTER II REQUIREMENTS FOR AUTHORIZATION

Art. 3. Application.- The application to obtain authorization for the establishment of an insurance company shall be submitted to the Superintendence, and must contain at minimum:

a) The draft deed of incorporation and its bylaws.

b) Economic-financial feasibility study, which must contain the information required in Annex 1 of this norm, which is an integral part of it. Said study must be certified by an actuary registered with the Superintendence, an economist, and an authorized public accountant, all with at least 5 years of experience in the insurance activity in their respective professions.

c) Minute showing deposit in the current account of the Superintendence, for the value of 1% of the minimum capital amount, for the processing of the application. Once it has started its operations, said deposit will be returned to the promoters. In case the application is denied, 10% of the deposit amount will be paid to the Treasury of the Republic, the balance will be returned to the interested parties. In case of withdrawal, 50% of the deposit will be paid to the Treasury and the remaining 50% will be returned to the promoters. For the purposes of what is indicated in this subsection, the account number and name of the bank entity where the deposit will be made must be requested from the Superintendence.

d) In the case of insurers, letter of intent or direct backing from reinsurers with whom they intend to place reinsurance business; also indicating the line(s) of business in which they wish to operate. In the case of reinsurers and retro-ceding surety companies, letter of intent or direct backing from their retro-ceders.

e) In order to verify compliance with the provisions of paragraphs 3, 4, 7 and 8 of Article 10 of the LGS, each of the 5% Shareholders of the proposed company, as well as the members of the board of directors and main management team: principal executive, general manager, managers and deputy managers of areas, actuary, anti-money laundering and terrorist financing administrator (AML/CFT administrator), internal auditor and regulatory controller, must present, as indicated, the following information and documentation:

1. For natural persons:

i. Name, age, occupation, nationality and domicile.

ii. Documented curriculum vitae with the information required in Annex 2, which becomes an integral part of this norm.

iii. Asset statements and relationship of income and expenses, with the information required in Annex 3, which becomes an integral part of this norm, signed by the interested party and certified by an authorized public accountant or equivalent professional in the country where it is issued. The figures must be expressed in book value in accordance with accounting standards. This information will only be required for 5% Shareholders.

iv. Photocopy of the identity card on both sides for nationals, or of the identity card for residents or of the passport in the case of foreigners, notarized according to the law on the matter.

v. Photocopy of the Unique Taxpayer Registry Card (RUC), notarized according to the law on the matter. In the case of foreigners not domiciled in the country, they must present the equivalent used in the country where they pay taxes.

vi. Certificate of judicial and/or police records, issued by the corresponding national instances in the case of persons domiciled in Nicaragua, and by the competent foreign body, when it comes to persons not domiciled in Nicaragua or natural persons residing in Nicaragua who have been residents abroad in the last 15 years.

vii. A minimum of 5 recent personal, banking or commercial references as of the date of the application. (national or foreign).

viii. In the case of those who form the main team, they will present a declaration before a public notary stating that they are not subject to any of the situations contemplated in paragraphs 1, 5, 7, 8, 9 and 10 of Article 44 of the LGS. In the case of Directors, they will present a declaration before a public notary stating that they are not subject to the impediments of the aforementioned Article 44.

ix. Detailed breakdown of related natural and legal persons as well as those that make up their unit of interest, based on the criteria established in Article 71 of the LGS and the corresponding regulations.

2. For legal persons:

i. Notarially certified copy of the testimonial of the public deed of incorporation of the company, bylaws and their modifications, if any. In the case of foreign legal persons, the equivalent documents.

ii. A minimum of five recent banking or commercial references as of the date of the application. (national or foreign).

iii. Names and curriculum vitae of the members of the board of directors, which will be presented in accordance with Annex 2.

iv. Notarial certification in original of the minutes in which the authorization granted by the corresponding corporate instance is recorded, to participate as organizer and/or shareholder of the new insurance company and the amount of investment allocated for that purpose.

v. Copy of the report of independent auditors on the audited financial statements, corresponding to the two accounting periods prior to the date of the application.

vi. List and percentage of participation of 5% Shareholders, natural persons, ultimate owners of the shares, in a succession of legal persons, of the legal person shareholder promoting the insurance company in formation. In order to determine if the natural persons indicated here are 5% Shareholders, the calculation methodology established in Annex 4, which is an integral part of this norm, must be followed.

The natural persons who, according to the aforementioned calculation methodology, are 5% Shareholders must comply with the information requirements established in paragraph 1 of this subsection e).

The Superintendent is empowered to request the information he considers necessary regarding the legal persons in which the 5% Shareholders, natural persons, participate, such as members of boards of directors, activity to which they are dedicated, data of incorporation and registration, among others.

Likewise, a scheme reflecting the shareholding structure of the 5% Shareholders must be presented, in which it is reflected whether this percentage of participation is individually or jointly with their related parties, indicating the full names of the natural or legal persons contained in this organizational chart.

f) For all shareholders, documentary evidence of the lawful origin of the wealth to be invested in the new insurance company is required. As a minimum, such documentation must include:

1. Information on the bank accounts from which the money comes.

2. Information on the origin of the money deposited in said accounts.

3. Information on the origin of the wealth (information on the activities from which the wealth comes such as businesses, inheritances, donations, etc.) and evidence that the money comes from them.

The Superintendent is empowered to request any other information he considers necessary in order to comply with the object of this norm and with the legal mandate to protect the interests of the policyholders who entrust their premiums to insurance institutions.

Art. 4. Exceptions.- The Superintendent may authorize exceptions to one, several or all of the requirements indicated in the previous article in the following cases:

a) When the legal person partner is a public law institution with capacity for such effect.

b) When the legal person partner is a bank or international or multilateral development organization, internationally recognized as such.

c) When the legal person partner trades its shares on a stock exchange or regulated market. In these cases, the documents justifying the case must be presented.

Art. 5. Criteria for denying the authorization application.- Without prejudice to the application of other evaluation criteria established in the law and other applicable regulations, the authorization application will be denied in any of the following cases:

a) The required information is not presented complete within the time limit established in this norm.

b) False or misleading information is presented.

c) The information presented demonstrates or allows reasonably to presume, in the judgment of the Superintendent, significant deficiencies in the qualities of the applicants.

In case the presentation of false or misleading information is proven after the authorization to constitute the company or to operate has been issued, said authorizations will be revoked.

Art. 6. Number of copies.- The application and documents presented to the Superintendence must be delivered in original and four simple photocopies.

CHAPTER III REQUIREMENTS FOR THE ESTABLISHMENT OF BRANCHES OF FOREIGN INSURANCE COMPANIES

Art. 7. Application.- For the establishment in the country of a branch of a foreign insurance company, an application must be submitted to the Superintendent through a representative accredited by public instrument, in Spanish, which must contain at minimum:

a) Personal data identifying the legal representative designated by the parent insurance company.

b) Exact address in Nicaragua to receive notifications from the Superintendence.

c) Corporate name and full trade name, and abbreviations, when applicable, of the parent company requesting the establishment of a branch in the country.

d) In the case of insurers and reinsurers, the line(s) of business in which they wish to operate. In the case of surety companies, the types of surety bonds in which they wish to operate.

e) Exact address of the parent foreign insurance company.

f) Exact address in the country where the branch will operate.

g) Documents attached to the application, as indicated in the following article.

The application and documents presented to the Superintendent must be delivered in original and one simple photocopy.

Art. 8. Documentation.- The application for the establishment of a branch of a foreign insurance company must be accompanied by the following documentation:

a) Economic-financial feasibility study certified by an actuary, an economist and an authorized public accountant, in accordance with what is established in Article 3, subsection b) of this norm. This study must contain the information required in Annex 1.

b) Notarially certified copy of the deed of incorporation or constitutive act and bylaws of the applicant company and of the legal authorization that supports its constitution and operation in the country of origin, as well as the proof of validity of all of the foregoing.

c) Audited Financial Statements and annual reports of the applicant foreign insurance company, corresponding to the last 3 years, including their notes and complementary information.

d) Proof that the applicant foreign insurance company is legally authorized to establish branches in Nicaragua, in accordance with its bylaws and the laws of its country of origin, accompanied by certification issued by the supervisory authority of that country stating its conformity with the application.

e) Original of the resolution adopted by the corresponding corporate instance of the parent company, by which the opening of the branch in the country is decided; as well as a notarially certified copy in accordance with the law on the matter of the instrument in which the legal representative is authorized to carry out business, execute acts, conclude contracts and represent judicially and extrajudicially the society registered in the respective records.

f) For the future principal executive or general manager, managers and deputy managers of areas, internal auditor, actuary, AML/CFT administrator and regulatory controller of the branch, including its legal representative:

1. Declaration before a public notary stating that they are not subject to the impediments enunciated by Article 44 of the General Insurance Law.

2. A minimum of five recent banking or commercial references as of the date of the application.

3. Certificate of judicial and/or police records, issued by the corresponding national instances in the case of persons domiciled in Nicaragua, and by the competent foreign body, with the corresponding authentication, when it comes to persons not domiciled in Nicaragua or natural persons residing in Nicaragua who have been residents abroad in the last 15 years.

4. Curriculum vitae in accordance with Annex 2.

g) Declaration of the parent foreign insurance company indicating:

1. The national or foreign entities that are part of the financial group to which the parent insurance company in question belongs, in accordance with what is indicated in Article 181 of the LGS.

2. The ownership structure of the parent insurance company, which allows determining with precision the identity of the natural persons, who are ultimate owners of the shares in a succession of legal person shareholders of the parent company, who hold 5% or more of the paid-up capital, following what is indicated in subsection e) paragraph 2, roman vi, of Article 3 of this norm.

Processing will be given only to applications for the establishment of branches of foreign insurance companies, when institutional information exchange can be carried out between the supervisors of both countries and when the parent company has more than five years of operating and carrying out insurance and/or surety activities in the country that granted the license. If it is a foreign insurance company originating from a merger, the years of operation of the oldest company will be counted.

CHAPTER IV PUBLICATION

Article 9. List of shareholders.- Upon receipt of the application and obtaining all the required information, the Superintendent will publish, in at least two widely circulated national newspapers, only once, and at the expense of the interested applicants, the list of shareholders, as well as the founding directors of the company to be established. In the case of shareholders, legal persons, the list of shareholders who own more than five percent (5%) of the share capital of said entities must also be published. The foregoing is so that any person who has knowledge of any of the circumstances provided for in paragraph 8 of Article 10 of the General Insurance Law, may object to the quality of the shareholders and directors respectively, who will be part of the projected company. Such objections must be presented in writing to the Superintendent for the evaluation of the said official, within a period not exceeding 15 days after the publication, attaching the pertinent evidence; otherwise, the objection is considered not made.

CHAPTER V AUTHORIZATION PROCESS

Art. 10. Authorization.- The Superintendence will have a period of 120 days to rule on the application for authorization to establish an insurance company or to authorize the establishment of a branch of a foreign insurance company. This period will begin to run from the moment when all the information required by the LGS and this norm has been received.

Art. 11. Modifications.- Any changes that the interested parties wish to make during the time the application is pending or prior to the start of operations must be communicated in writing to the Superintendent complying with the same requirements of the original application, insofar as applicable.

Article 12. Requirements to start operations.- To start operations, insurance companies, established in accordance with this norm, must comply with the following requirements:

a) The minimum share capital fully paid in cash, which must adjust to the amounts established by Article 34 of the LGS according to the activity to be carried out and 80% of it in demand deposit at the Central Bank of Nicaragua.

b) Testimonial of the deed of incorporation and its bylaws, with the corresponding registration in the Public Registry.

c) Opening balance sheet; certified by an authorized public accountant.

d) Certification of the appointments of the directors for the first period, of the manager or principal executive of the insurance company, the regulatory controller, the AML/CFT administrator and the internal auditor, in accordance with what was presented attached in the application for authorization to constitute itself.

e) Verification by the Superintendent that the company has, among others, the adequate physical facilities and technological platform, as well as the systems, procedures and administrative infrastructure necessary to provide the services inherent to its corporate object, which comply at minimum with the regulations governing the management of technological and operational risks issued by the Superintendence, such as:

1. Issuance of policies;

2. Registration of its operations;

3. Accounting;

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4. Valuation of asset and liability portfolios;
5. Electronic processing of accounting, financial, technical, and statistical information;
6. Infrastructure for the payment of claims and attention to insured persons and beneficiaries; and, the other services corresponding to the specialty of the operations the company intends to carry out.
7. Name and data of the authorized actuary registered with the Superintendency who will evaluate, certify, and sign technical actuarial studies, actuarial balances, technical actuarial notes, and reserves.
8. Formats of the General Conditions, Particular Conditions, Applications, Addenda, Health Declarations, Technical Notes, Questionnaires, and other documents comprising the policies to be used in the underwriting process.
9. General conditions, particular conditions, and addenda of the reinsurance contracts subscribed.
10. Procedure manuals for each of the operational processes such as, internal audit, claims, underwriting, among others.
11. Integral System for the Prevention and Administration of Money, Goods, or Assets Laundering Risks; and of Terrorism Financing in accordance with the norm issued by the Board of Directors; If the application for operational authorization with evidence of compliance with the aforementioned requirements is not submitted within 6 months from the notification of the resolution authorizing its constitution, it shall become void, and the amount of the deposit referred to in numeral 5 of article 10 of this norm shall be paid to the Treasury of the Republic.

Art. 13. Verification of requirements. Operational Authorization.- Once compliance with the requirements established in the previous article is verified, the Superintendent shall grant the authorization to commence operations in accordance with what is established in article 16 of the LGS.

CHAPTER VI FINAL PROVISIONS

Art. 14. Legalization of documents from abroad and their language.- Documents originating from abroad that are required from natural or legal persons in this regulatory framework must meet the requirements established by the laws on the matter so that they may produce legal effects in the country.

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All information and/or documentation required by this norm that is in a language other than Spanish must be presented with its corresponding translation, which must comply with what is stipulated in the national laws on the matter or with the laws of the country where the translation is carried out.

Art. 15. Annexes.- The Superintendent is authorized to make modifications to the Annexes to this norm when the case so requires.

Art. 16. Validity.- This norm shall enter into force from its publication in La Gaceta, Official Diary.

ANNEX 1 CONTENT OF THE ECONOMIC-FINANCIAL FEASIBILITY STUDY

I. EXECUTIVE SUMMARY OF THE PROJECT It must include the following general data: a) Project identification. b) Legal and regulatory aspects to be considered in the development of the project. c) Brief description of the project including:

1. Current economic and social conditions, internal and external;
2. Economic and social benefits the project will contribute to the country;
3. Source of resources;
4. Target market, size, and geographical area of the project;
5. Other relevant aspects of the project; and,
6. Most important aspects of the study's conclusions.

II. MARKET STUDY a) Determination of the target market. Determination of the target market to which the products and services of the insurance company in formation will be oriented, explaining extensively the reasons that justify the decision.

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b) Current and future demand analysis. In order to know if the insurance company in formation, as well as the products and services it will offer, will have demand that makes the project viable, a market research must be conducted which will be supported by:

1. Evaluation of the financial system and social and economic variables. This part of the study will comprise the analysis of the national financial system and the main economic, political, and social variables, for at least the last 5 years, to determine the strengths, weaknesses, opportunities, and threats of the project. In the case of reinsurers, this study will also comprise the territorial scope in which they will operate. For this, the orientation of monetary policy and the economic growth prospects corresponding to the year in which the application is submitted must also be taken into account; and,
2. Research on the potential market of the project. A market research must be carried out through surveys or other acceptable technique, which allows evaluating, among other aspects, if the new insurance company and the products and services to be offered will have acceptance and demand from market users. Additionally, it must include projections of the demand for products and services and the bases supporting them.

c) Current and future supply analysis. The supply analysis must widely consider the conditions under which competition will take place in the market, taking into account existing products and services and the market niche in which positioning is intended. Regarding this, the characteristics of the main products and services offered by the insurance or reinsurance market and those to be offered by the new society must be indicated. The aspects, characteristics, and advantages of the services and products that the new society will offer, compared to what the market already offers, will be highlighted, this in order to determine which aspects will make its participation possible, indicating its competitive advantages; additionally, projections on the supply of these products and services must be included, as well as the bases supporting the projections.

d) Price analysis. In accordance with the research conducted, an analysis of the prices of similar products and services offered by the insurance or reinsurance market must be presented, in order to compare them with those provided by the company in formation and use them for the projections of probable income and expenses.

e) Commercialization analysis (marketing). The strategy for the commercialization of the products and services of the insurance company in formation must be described, indicating the distribution channels and generally the way in which competition will take place in the market.

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f) Conclusions. Having developed the bases and elements comprising the market study, the corresponding conclusions must be issued, which will also include the favorable and unfavorable aspects found in the research.

III. TECHNICAL STUDY. It must contain all information that allows establishing the necessary infrastructure to serve its target market, as well as quantifying the amount of premiums, coverages, and operational costs of the insurance company in formation, specifying the following: a) Business organization. The internal organization of the society will be described, as well as the different administrative bodies, specifying the number of personnel, experience, academic level, and position within the organization. b) Location and description. Probable geographical location of the head office, as well as technical explanation of this decision. c) Information systems. Description of accounting, administrative, communication, and risk monitoring systems, money laundering prevention, and terrorism financing; as well as the software and hardware to be used. d) Legal framework. The study must be based on the current applicable legal and regulatory provisions, considering their impact on the financial projections of the insurance company. e) Conclusions. Having developed the bases and elements comprising the technical study, the corresponding conclusions must be issued, which will also include the favorable and unfavorable aspects found in the research.

IV. STUDY AND FINANCIAL EVALUATION OF THE PROJECT. In this section, the amount and origin of the economic and financial resources available to carry out the project must be explained, including the following aspects: a) Origin and amount of capital. For this purpose, the authorized, subscribed, and paid capital with which the insurance company will start must be indicated, as well as the description and documentation proving the origin and legitimacy of the funds. b) Policies, methodology, and assumptions. The policies, methodology, and assumptions that will be used to take advantage of the opportunities offered by the insurance market in particular and the economy in general will be described, on the following aspects:

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1. Underwriting of direct or reinsured premiums;
2. Loss ratio;
3. Reinsurance, retrocessions, or reinsurance backing;
4. Investments; and,
5. Administration.

c) Financial projections. Financial projections must be prepared covering a period of no less than five (5) years of operation, presenting the following information:

1. Assumptions for each year of the financial projections;
2. Balance sheet;
3. Income statement;
4. Actuarial income statement;
5. Cash flow;
6. Break-even point;
7. Statement of net worth position in accordance with what is established in the LGS and the respective regulation, which includes the projection of technical equity; and
8. Statement of valuation of technical reserves and integration of their investments. In the cases of numerals 2), 3), 4), and 5), the assumptions supporting the figures recorded must be detailed.

d) Calculation of financial indicators. Among the aspects to be evaluated are:

1. Minimum expected rate of return;
2. Profitability analysis;
3. Net present value, indicating the discount rate used;
4. Internal rate of return of the project; and,
5. Sensitivity analysis. The project's sensitivity analysis must consider endogenous and exogenous factors that could affect the project, proposing pessimistic, normal, and optimistic scenarios.

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e) Conclusions. Having developed the bases and elements comprising the study and financial evaluation, the corresponding conclusions must be issued, which will also include the favorable and unfavorable aspects found in the analysis.

V. ECONOMIC AND SOCIAL EVALUATION. This section must consider the project's contributions to the country's economic variables and society in general, including: f) Social benefits. Job creation, tax generation, access to insurance services, financing sources and investment, contribution to the target market. g) Economic benefits. Participation in the country's economic growth, price competition, incidence on demand and supply, financing sources, contribution to savings, etc. h) Conclusion. Having developed the bases and elements comprising the economic and social study, the corresponding conclusions must be issued, which will also include the favorable and unfavorable aspects established in the analysis.

VI. STRATEGIC PLANNING. Strategic planning for 5 years must include the following aspects: a) Society profile; b) Analysis of the project's strengths, opportunities, weaknesses, and threats; c) Vision; d) Mission; e) Strategic objectives; f) Strategies in the proposed business sphere: 6) Products and Services; 7) Finance; 8) Growth; 9) Organization and Corporate Governance; 10) Personnel;

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11. Marketing; and,
12. Reinsurance and Retrocession or Equity Protection Plans, when applicable. g) Risk management and internal controls; h) Contingency plans; and, i) New business opportunities.

ANNEX 2 CURRICULUM OF ORGANIZERS, PROPOSED ADMINISTRATORS, SHAREHOLDERS, MEMBERS OF THE BOARD OF DIRECTORS, CHIEF EXECUTIVE, GENERAL MANAGER, VICE MANAGERS OF AREAS, REGULATORY CONTROLLER, AND INTERNAL AUDITOR OR THOSE WHO ACT IN THEIR PLACE Strictly Confidential Information

SOCIETY: ________________________________________________________________________ GENERAL DATA Full Name: ________________________________________________________ Nationality: ____________________________________________________________ Profession or trade: _________________________________________________________ Place and date of birth:

---

Identity Card Number:

---

Residence Card (in the case of foreign residents in the country):

---

Passport Number (in the case of non-resident foreigners)

---

RUC Card Number (or its equivalent, as appropriate):

---

Position to be held in the insurance company:

---

Immigration status: ______________________________________________________ Do you have authorization to work in the country? (only for foreign shareholders holding administrative or directorate positions) YES ( ) NO ( )

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Authorization Number: ____________________________________________________ Authorization Date: _____________________________________________________ Validity of the authorization: _________________________________________________

KNOWLEDGE AND EXPERIENCE Knowledge and experience in insurance, banking, stock market, financial activities, and financial risk management: Entity Position Period from ... to Main Functions* Positions held or currently held in other entities: Entity Position Period from ... to Main Functions* Studies and training completed: Institution Title or course name Period from ... to Observations*

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*It is required to expand in a separate document all information related to the functions and activities carried out in these entities, which allows evaluating their knowledge, skills, and aptitudes to solve problems autonomously and flexibly and supports their suitability for the position they hold or are proposed for.

OTHER INFORMATION Have you been declared bankrupt or insolvent? YES ( ) NO ( ) If affirmative, indicate the reasons and state if you have been rehabilitated:_______________________________________________________________________________

---

---

Have you ever been subject to judicial proceedings? YES ( ) NO ( ) If affirmative, indicate: Reason Type of Process Date Final Result Have you been administratively sanctioned or judicially processed for money laundering or other assets? YES ( ) NO ( ) If affirmative, indicate the sanction or process. I declare that the data above are true, subjecting myself to the sanctions determined by law for any inaccuracy thereof. Place and date: _____________________________________________________ (f) __________________ Name: ______________

ANNEX 3 STATEMENT OF NET WORTH AND RELATIONSHIP OF INCOME AND EXPENSES NOTARIAL DECLARATION (Strictly Confidential Information)

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Insurance company: _____________________________________________________ NAME: _______________________________________________________________ Referring to the day ____________________________________________________________ ASSET (In thousands of C$)* Cash on hand Bank deposits (total) Account of ____________ No. __________ Bank

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Account of ____________ No. __________ Bank

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Account of ____________ No.___________ Bank

---

Account of ____________ No. __________ Bank

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Shares (detail in table 3) Bonds, promissory notes, and other securities (detail in table 3) Accounts receivable (only those duly documented, detail in table 4) Inventories (cost value, detail in table 5) Household goods Machinery, furniture, and equipment Tools Vehicles (detail in table 6) Real estate (detail in table 7) Other assets (specify)

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TOTAL ASSETS LIABILITIES (In thousands of C$)* Short-term credits (one year or less, include overdrafts, detail in table 9) Long-term credits (more than one year, detail in table 9) Accounts payable Suppliers Other liabilities (specify) TOTAL LIABILITIES NET EQUITY (Assets minus liabilities) _________________________________ CONTINGENCIES (detail table 10) _______________________________________

• When it comes to foreign currency, indicate its equivalent in national currency, at the official exchange rate of the date of the statement of net worth. INCOME (1) (Figures in thousands of C$) CONCEPTS MONTHLY ANNUAL Salaries Dividends and interest Commissions Rentals

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Others (specify) TOTAL INCOME EXPENSES (2) (Figures in thousands of C$) CONCEPTS MONTHLY ANNUAL Personal expenses Amortization of credits Interest on credits Other expenses (specify) TOTAL EXPENSES INVESTMENTS IN SECURITIES (3) ISSUER TYPE OF INVESTMENT (shares, bonds, promissory notes, etc.) COST VALUE SHARE PERCENTAGE (%) BOOK VALUE

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ACCOUNTS RECEIVABLE (4) TYPE OF DOCUMENT (promissory notes, bills of exchange, etc) ORIGINAL AMOUNT CURRENT BALANCE INVENTORIES (5) DESCRIPTION OF INVENTORY QUANTITY IN STOCK VALUE VEHICLE DETAIL (6) MAKE YEAR ACQUISITION VALUE BOOK VALUE

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REAL ESTATE DETAIL (7) DESCRIPTION OF REAL ESTATE HOUSE, FARM, LAND, BUILDING ADDRESS BOOK VALUE AREA SQM. REG. NO. VOLUME, PAGE AND ENTRY BOOK No. OF DEPT. DETAIL OF ENCUMBRANCES ON THE ABOVE IDENTIFIED REAL ESTATE (8) NAME OF CREDITOR DATA OF REAL ESTATE BALANCE DUE BANKING OBLIGATIONS SHORT AND LONG TERM (9) BANK AND COUNTRY CREDIT NO. BALANCE TYPE OF GUARANTEE CONCESSION DATE MATURITY DATE

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CONTINGENT OBLIGATIONS (10) GUARANTOR, CO-DEBTOR OR SURETY NAME OF CREDITOR ORIGINAL AMOUNT BALANCE INSURANCE CONTRACTED (11) INSURANCE COMPANY POLICY NO. TYPE OF INSURANCE INSURED AMOUNT VALIDITY DATE Note: Any other information or additional documentation deemed appropriate may be added. OBSERVATIONS:

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I DECLARE that the above information is true and I submit myself to the corresponding legal sanctions for any falsehood or inaccuracy that may be proven. Place and date______________________________________________________ (f) ___________________________________________

ANNEX 4 CALCULATION METHODOLOGY TO ESTABLISH 5% SHAREHOLDERS

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The ownership of 5% of a natural person individually or together with their related parties through one or more legal entities up to the institution is determined as follows: PN1 ----------> PJ2 ----------> PJS ---------- PJ(n-1)% ----------> PJ(n) P1% P2% P(n-1)% Where K% is the percentage of participation of PN1 in PJ(n) Conditions:

1. If P1% ≤ 50%: K% = P1% * P2% * ----- * P(n-1)%
2. If P1% > 50%, P1% is considered 100%: a) Where P2% ≤ 50%: K% = 100% * P2% * ----- * P(n-1)% and so on. b) Where P2% > 50%: K% = 100% * 100% * P3% * ----- * P(n-1)% and so on. Abbreviations: PN: Natural Person PJ: Legal Person Pi%: Percentage of participation of natural person “i” in the capital of legal person “i+1”. For i = 1, 2, 3, …., n-1. (f) A. Rosales B. (f) V. Urcuyo V. (f) Gabriel Pasos Lacayo (f) F. Reyes Báez (f) illegible (Silvio Moisés Casco Marenco) (f) U. Cerna B. ANTONIO MORGAN PÉREZ Ad Hoc Secretary Board of Directors SIBOIF