Official Letter Modifying the Authorization Granted to FM Global de México, S.A. de C.V. to Organize and Operate as an Insurance Institution

DOF: 20/02/2020

OFFICIAL LETTER modifying the authorization granted to FM Global de México, S.A. de C.V. to organize and operate as an insurance institution.

A seal bearing the National Coat of Arms appears on the margin, stating: United Mexican States.- SHCP.- Ministry of Finance and Public Credit.- National Insurance and Bonding Commission.- Presidency.- Legal Vice Presidency.- General Legal, Advisory and Intermediaries Directorate.- Advisory Directorate.- File: C00.411.13.2.1-S0109"17".- Official No. 06-C00-41100-61640/2019.

SUBJECT:

The authorization to organize and operate as an insurance institution, granted to FM Global de México, S.A. de C.V., is modified.

FM GLOBAL DE MÉXICO, S.A. DE C.V.

Arquitecto Pedro Ramírez Vázquez 200-11, Floor 6

Colonia Valle Oriente

C.P. 66269, San Pedro Garza García, Nuevo León

The Federal Government, through the National Insurance and Bonding Commission, prior to the Agreement of its Board of Directors, based on Articles 2, paragraph I, 17, 26 and 31, paragraph VIII, of the Organic Law of the Federal Public Administration; Article 2, section D, paragraph III, of the Internal Regulations of the Ministry of Finance and Public Credit; Articles 11, 75, 366 paragraph VIII, 367 paragraphs I and II, 369 paragraph II, 370 last paragraph, 372 paragraph XLI and 373 of the Insurance and Bonding Institutions Law, as well as Articles 4 paragraphs I and II, 6 and 9 of the Internal Regulations of the National Insurance and Bonding Commission, issues these Resolutions in response to the following Background and Considerations:

BACKGROUND

I.

By official letter 101.- 268.- 731.1/327675, published in the Official Gazette of the Federation on July 31, 2008, the Ministry of Finance and Public Credit authorized FM Global de México, S.A. de C.V., to function as an insurance institution, a subsidiary of Factory Mutual Insurance Company, a financial institution from the exterior of Rhode Island, United States of America, in the practice of damage insurance operations, in the marine and transport, fire, miscellaneous, as well as earthquake and other catastrophic risks lines. This authorization was last modified by the aforementioned Dependency by official letter 366-185/10 of October 20, 2010.

II.

By writings received by this Commission on April 6, May 8 and November 9, 2015; February 29, 2016; September 26 and November 3, 2017; February 7 and November 22, 2018, FM Global de México, S.A. de C.V., requested the authorization of this Commission to comprehensively reform its corporate bylaws, including the modification to the first paragraph of Article Seventh due to the increase in its minimum fixed capital without right of withdrawal in the amount of $187,587,100.00 (one hundred eighty-seven million five hundred eighty-seven thousand one hundred pesos 00/100 M.N.), so that said capital amounted to $337,508,480.86 (three hundred thirty-seven million five hundred eight thousand four hundred eighty pesos 86/100 M.N.).

III.

Regarding the comprehensive reform of the corporate bylaws of FM Global de México, S.A. de C.V., this Commission by official letters numbers 06-C00-41100/11196 of April 25, 2016 and 06-C00-41100/23876 of August 11, 2016, gave a favorable opinion, and approved, respectively, public instrument number 16,841 of May 9, 2016, granted before the notary public number 130 of Monterrey, Nuevo León, registered in the Public Commerce Registry of the State of Nuevo León, in which the aforementioned comprehensive reform is recorded.

As for the modification of the first paragraph of Article Seventh due to the increase in the minimum fixed capital without right of withdrawal, this Commission by official letters numbers 06-C00-41100-20050/2019 of May 7, 2019 and 06-C00-41100-56023/2019 of September 17, 2019, approved the same and had the notarial instruments 19,954 and 20,008 of July 1 and 10, 2019, respectively, presented, granted before the notary public number 60 of Monterrey, Nuevo León, and registered in the Public Commerce Registry of the State of Nuevo León.

IV.

In view of the foregoing, the modification to the authorization of FM Global de México, S.A. de C.V., to organize and operate as an insurance institution, was submitted to the consideration of the Board of Directors of this Commission, who, taking into consideration the favorable opinion of its Authorizations Committee, agreed as follows:

« UNIQUE.- THE AUTHORIZATION granted to FM Global de México, S.A. de C.V., is MODIFIED, in order to reflect the modifications made in the corporate bylaws of said institution, which are described below:

• The elimination of the reference "Earthquake", because according to Articles 25, paragraph III, subsection j), and 27, paragraph XV, of the Insurance and Bonding Institutions Law, earthquake risks are included in the Catastrophic Risks line.

• To substitute the amount of social capital it has, with the reference that its capital must be expressed in Investment Units and be paid in national currency as ordered by Article 49, first paragraph, of the Insurance and Bonding Institutions Law.»

CONSIDERATIONS

FIRST.- That Article 369, paragraph II, of the Insurance and Bonding Institutions Law, states that it corresponds to the Board of Directors of this Commission, among others, to modify the authorizations to organize, operate and function as an insurance institution.

SECOND.- That as a result of the resolutions issued in the aforementioned official letters 06-C00-41100/11196 of April 25, 2016 and 06-C00-41100-20050/2019 of May 7, 2019, it is appropriate to modify the terms of the authorization granted to that insurance institution.

THIRD.- That in accordance with what is stated in Background IV of this official letter, the Board of Directors of this Commission, in its Session 210 of October 29, 2019, agreed to modify the authorization granted to that insurance institution.

In light of the foregoing, the following are issued:

RESOLUTIONS

FIRST.- The Preamble, Articles First, Second and Third, base II, subsection a) of the authorization granted to FM Global de México, S.A. de C.V., to operate as an insurance institution, are modified, so that they remain in the following terms:

"AUTHORIZATION GRANTED BY THE FEDERAL GOVERNMENT TO FM GLOBAL DE MÉXICO, S.A. DE C.V., TO ORGANIZE AND FUNCTION AS AN INSURANCE INSTITUTION, SUBSIDIARY OF FACTORY MUTUAL INSURANCE COMPANY, FINANCIAL INSTITUTION FROM THE EXTERIOR OF RHODE ISLAND, UNITED STATES OF AMERICA, UNDER THE FOLLOWING TERMS:

" ARTICLE FIRST.- In exercise of the power conferred by Articles 5 and 33-C of the repealed General Law of Insurance Institutions and Mutual Insurance Companies to the Ministry of Finance and Public Credit, and which from April 4, 2015, are conferred by Articles 11 and 75 of the Insurance and Bonding Institutions Law to the National Insurance and Bonding Commission, authorization is granted to FM Global de México, S.A. de C.V., to organize and function as an insurance institution, subsidiary of Factory Mutual Insurance Company, a financial institution from the exterior of Rhode Island, United States of America.

" ARTICLE SECOND.- The subsidiary insurance institution is authorized to conduct damage insurance operations, in the marine and transport, fire, miscellaneous and other catastrophic risks lines.

" ARTICLE THIRD.- The subsidiary insurance institution shall be subject to the North American Free Trade Agreement, celebrated between the United Mexican States, Canada and the United States of America, to the provisions of the Insurance and Bonding Institutions Law, as well as those derived from it, to the General Law of Commercial Companies, and to the other laws applicable to it, and in particular, to the following bases:

"...

a).- The subsidiary insurance institution must have the minimum paid capital determined for the year in question, for each operation or line it has authorized, expressed in Investment Units and which must be paid in national currency, as ordered by Article 49, first paragraph, of the Insurance and Bonding Institutions Law.

...".

SECOND.- The authorization granted to FM Global de México, S.A. de C.V., to organize and operate as an insurance institution, after the modification indicated in the previous Resolutive, remains entirely in the following terms:

"AUTHORIZATION GRANTED BY THE FEDERAL GOVERNMENT TO FM GLOBAL DE MÉXICO, S.A. DE C.V., TO ORGANIZE AND FUNCTION AS AN INSURANCE INSTITUTION, SUBSIDIARY OF FACTORY MUTUAL INSURANCE COMPANY, FINANCIAL INSTITUTION FROM THE EXTERIOR OF RHODE ISLAND, UNITED STATES OF AMERICA, UNDER THE FOLLOWING TERMS:

" ARTICLE FIRST.- In exercise of the power conferred by Articles 5 and 33-C of the repealed General Law of Insurance Institutions and Mutual Insurance Companies to the Ministry of Finance and Public Credit, and which from April 4, 2015, are conferred by Articles 11 and 75 of the Insurance and Bonding Institutions Law to the National Insurance and Bonding Commission, authorization is granted to FM Global de México, S.A. de C.V., to organize and function as an insurance institution, subsidiary of Factory Mutual Insurance Company, a financial institution from the exterior of Rhode Island, United States of America.

" ARTICLE SECOND.- The subsidiary insurance institution is authorized to conduct damage insurance operations, in the marine and transport, fire, miscellaneous and other catastrophic risks lines.

" ARTICLE THIRD.- The subsidiary insurance institution shall be subject to the North American Free Trade Agreement, celebrated between the United Mexican States, Canada and the United States of America, to the provisions of the Insurance and Bonding Institutions Law, as well as those derived from it, to the General Law of Commercial Companies, and to the other laws applicable to it, and in particular, to the following bases:

" I.- Its name shall be "FM Global de México, Variable Capital Anonymous Company".

" II.-Its social capital shall be variable according to the following:

a).- The subsidiary insurance institution must have the minimum paid capital determined for the year in question, for each operation or line it has authorized, expressed in Investment Units and which must be paid in national currency, as ordered by Article 49, first paragraph, of the Insurance and Bonding Institutions Law.

b).- The variable capital with right of withdrawal in no case may be greater than the paid capital without right of withdrawal.

" III.- Its corporate domicile shall be the City of San Pedro Garza García, Nuevo León.

" ARTICLE FOURTH.- By its very nature, this authorization is non-transferable. "

THIRD.- These resolutions must be published in the Official Gazette of the Federation and in two widely circulated newspapers from the corporate domicile of the institution, within the one hundred twenty days following the date of their notification, in terms of what is provided in Article 75, second paragraph, in relation to Article 11 of the Insurance and Bonding Institutions Law, at the expense of the interested parties.

This official letter is issued based on the information provided by the petitioner contained in the writings sent and is limited exclusively to the modification of the authorization granted to FM Global de México, S.A. de C.V., to organize and operate as a subsidiary insurance institution, in the terms described which, in accordance with the applicable provisions, it is competent for this Commission to resolve, and does not prejudge any act that said company carries out that implies the prior authorization or approval of other financial, administrative, tax or any other authorities, in terms of the current regulations, nor validates the legality or validity of the same in case said authorization or approval is not obtained.

You are hereby informed of the foregoing, based on Articles 2, paragraph I, 17, 26 and 31, paragraph VIII, of the Organic Law of the Federal Public Administration; Article 2, section D, paragraph III, of the Internal Regulations of the Ministry of Finance and Public Credit; Articles 11, 75, 366, paragraph VIII, 367 paragraphs I and II, 369 paragraph II, 370 last paragraph, 372 paragraph XLI and 373 of the Insurance and Bonding Institutions Law, as well as Articles 4, paragraphs I and II, 6 and 9 of the Internal Regulations of the National Insurance and Bonding Commission.

Respectfully,

Mexico City, November 1, 2019. - The President of the National Insurance and Bonding Commission, Ricardo Ernesto Ochoa Rodríguez.- Rubric.

(R.- 492472)

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