Resolution JPRFM-2026-032-S Approving Reforms to Chapter VI on Investment Classification and Valuation and Chapter VII on Mandatory Investment Segments and Percentages for Insurance and Reinsurance Companies

RESOLUTION No. JPRFM-2026-032-S
THE BOARD OF FINANCIAL AND MONETARY POLICY AND REGULATION CONSIDERING:

That, Article 226 of the Constitution of the Republic of Ecuador prescribes that public servants and persons acting by virtue of a state power shall exercise only the competencies and faculties attributed to them in the Constitution and the Law;

That, Article 227 ibid states that the Public Administration constitutes a service to the community governed by the principles of effectiveness, efficiency, quality, hierarchy, coordination, planning, among others;

That, the first paragraph of Article 303 of the constitutional norm determines that the formulation of monetary, credit, exchange, and financial policies is the exclusive faculty of the Executive Function and will be implemented through the Central Bank of Ecuador;

That, on October 13, 2025, the Organic Reformatory Law of the Organic Code of Monetary and Finance was published in the Sixth Supplement of the Official Register No. 142;

That, Article 13 of the Organic Code of Monetary and Finance creates the Board of Financial and Monetary Policy and Regulation, part of the Executive Function, as an organ with functional, technical, and institutional autonomy, and in its decisions, responsible for the formulation of monetary, credit, financial, securities, insurance, and prepaid comprehensive health care services policy and regulation. The Board of Financial and Monetary Policy and Regulation will be the highest governing body of the Central Bank of Ecuador;

That, Article 17 of the aforementioned Code, in its pertinent part, determines that:

"(...) For the fulfillment of these functions, the Board will issue regulations in matters within its competence, without being able to alter legal provisions. The Board of Financial and Monetary Policy and Regulation may issue regulations by segments, economic activities, and other criteria. It may even reform or repeal regulations from the former Board of Monetary Policy and Regulation, the Board of Financial Policy and Regulation, or the Board of Monetary and Financial Policy and Regulation. All norms and policies issued by the Board of Financial and Monetary Policy and Regulation in the exercise of its functions, duties, and faculties must be backed by duly substantiated technical and legal reports (...)";

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That, Article 18 ibid establishes the specific functions of the Board of Financial and Monetary Policy and Regulation. In particular, it empowers it to regulate the creation, constitution, organization, activities, operation, and liquidation of insurance entities; issue the prudential regulatory framework; dictate regulations governing insurance and reinsurance; and, apply the provisions of the Code, respectively, if applicable, based on proposals presented by the respective superintendencies, within their respective scopes of competence;

That, Article 24 of the same Code provides that the acts of the Board of Financial and Monetary Policy and Regulation enjoy the presumption of legality and will be expressed through resolutions that will have mandatory force, which will govern from their publication in the Official Register, or from the date of their issuance when so determined by the Board, in accordance with the subject matter;

That, Article 25.2 ibid determines that the Technical Secretariat of the Board of Financial and Monetary Policy and Regulation is exercised by the Central Bank of Ecuador, and Article 25.3 establishes as its functions the preparation of technical and legal reports supporting regulatory proposals, providing technical and administrative support to the Board of Financial and Monetary Policy and Regulation, and those assigned to it by said Board;

That, Article 22 of the Organic Code of Monetary and Finance, Book III "General Insurance Law" establishes that insurance and reinsurance companies must maintain at all times the general or by-line solvency requirements regulated by the Board, considering among other factors mandatory investments. It also empowers said Board to issue the necessary regulations to apply the solvency regime, being able to determine the deadlines, conditions, measures, and actions necessary for its application;

That, General Provision Twenty-Ninth ibid states: "In current legislation where mention is made, indistinctly, of the Board of Monetary and Financial Policy and Regulation, the Board of Monetary Policy and Regulation; or, the Board of Financial Policy and Regulation, replace and understand as 'Board of Financial and Monetary Policy and Regulation';

That, Article 76 of the Organic Code of Monetary and Finance, Book II "Securities Market Law", defines investment funds and establishes their main characteristics and modalities. This norm provides the conceptual framework necessary to detail, in the regulation, the types of eligible investment funds for the mandatory investments of insurance and reinsurance companies.

That, Article 22 of the Organic Code of Monetary and Finance, Book III "General Insurance Law", establishes that insurance and reinsurance companies must maintain at all times the general or by-line solvency requirements regulated by the Board, considering among other factors mandatory investments. It also empowers said Board to issue the necessary regulations to apply the solvency regime, being able to determine the deadlines, conditions, measures, and actions necessary for its application;

That, Article 23 of the Organic Code of Monetary and Finance, Book III "General Insurance Law", provides that insurance and reinsurance companies must invest at least sixty percent (60%) of paid-in capital and legal reserve in securities market titles, investment funds, financial instruments, and real estate, in the segments and percentages defined by the Board. This provision constitutes the express legal basis for the Board to establish the segments and percentages of mandatory investment in the private insurance system;

That, First Transitional Provision of the Organic Reformatory Law of the Organic Code of Monetary and Finance determines that the members of the Board of Financial and Monetary Policy and Regulation, sworn in on September 16, 2025, by the National Assembly, will continue to exercise their functions for the periods for which they were designated and will maintain their labor continuity and acquired rights;

That, through Letter No. T.233-SGJ-25-098, dated September 5, 2025, signed by the Constitutional President of the Republic, addressed to the President of the National Assembly, the list of candidates for the designation of the Members of the Board of Financial and Monetary Policy Regulation was sent; as well as, the temporality of their stay within the initial period;

That, the Plenary of the National Assembly, on September 16, 2025, designated and swore in the members of the Board of Financial and Monetary Policy and Regulation, in the persons of: Gustavo Estuardo Camacho Dávila; Silvia Daniela Moya Arteta; Roberto Javier Basantes Romero; and, María Isabel Camacho Cárdenas;

That, through Letter No. AUT/0000145, dated May 6, 2026, and Letter No. SCVS-INS-DNA-2026-00082492-O, dated May 18, 2026, the Quito Stock Exchange and the Superintendence of Companies, Securities and Insurance, respectively, remit several requests for reforms to Chapter VI "Norm on classification and valuation of investments for insurance companies and reinsurance companies"; and, to Chapter VII "Norm on the Segments and Maximum Percentages of Mandatory Investment", Title III "On the Surveillance, Control and Information of the Private Insurance System", Book III "Private Insurance System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions;

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That, the Board of Financial and Monetary Policy and Regulation, through ordinary session No. 017-2026, under electronic modality (asynchronous), on July 28, 2026, reviewed the proposal sent via Memorandum No. BCE-BCE-2026-0319-M, dated July 24, 2026, by the General Manager of the Central Bank of Ecuador to the President of the Board of Financial and Monetary Policy and Regulation; as well as, Technical Report No. BCE-GEEE-052-2026 / BCE-SEMF-063-2026, dated July 20, 2026; and, Legal Report No. BCE-GJ-077-2026, dated July 21, 2026; and,

In exercise of its functions and in attention to Article 24 of the Organic Code of Monetary and Finance, the Board of Financial and Monetary Policy and Regulation,

RESOLVES:

Article 1.- In Article 14 of Section III "Classification and Initial Accounting Registration of Fixed Income Financial Investments" of Chapter VI "Norm on classification and valuation of investments for insurance companies and reinsurance companies", Title III "On the Surveillance, Control and Information of the Private Insurance System", Book III "Private Insurance System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, substitute numerals 2 and 3 with the following:

"2. Titles issued by the financial system.- These are investments made by the company in securities issued by banks and financial societies established in the country and abroad, of first rank, that have risk qualification requirements, where applicable;

3. Titles issued by non-financial societies.- These are investments of the insurance entity in instruments issued by national and foreign societies, that have risk qualification where applicable, other than shares; and,".

Article 2.- In Article 14 of Section III "Classification and Initial Accounting Registration of Fixed Income Financial Investments" of Chapter VI "Norm on classification and valuation of investments for insurance companies and reinsurance companies", Title III "On the Surveillance, Control and Information of the Private Insurance System", Book III "Private Insurance System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, after numeral 3, add the following:

"4. Debt titles issued by multilateral and supranational organizations.- These are investments made by the company in debt titles issued by multilateral and supranational organizations".

Article 3.- Substitute numerals 1, 3, 5, and 7 of Article 4 of Chapter VII "Norm on the Segments and Maximum Percentages of Mandatory Investment", Title III "On the Surveillance, Control and Information of the Private Insurance System", Book III "Private Insurance System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, with the following:

"1. Up to one hundred percent (100%) in values issued and guaranteed by institutions or entities of the public sector, including decentralized autonomous governments and public companies, as well as values resulting from securitization processes whose originator or beneficiary belongs to the public sector; that are registered in the Public Cataster of the Securities Market and in the stock exchange and have a risk qualification of "AA+" or higher. Values issued by the Ministry of Finance or the Central Bank of Ecuador are exempt from risk qualification;"

"3. Up to one hundred percent (100%) in long-term obligations, commercial paper issued by mercantile societies subject to the control of the Superintendence of Companies, Securities and Insurance; and, values resulting from credit content securitization processes issued by mercantile trusts, subject to the control of the Superintendence of Companies, Securities and Insurance, that are registered in the Public Cataster of the Securities Market or in the Special Stock Register (REB), that are originated by legal persons and entities of the private financial sector, and that have a risk qualification of "AA+" or higher, of the value or the issuer, as applicable. Insurance companies that are part of the private national insurance system are excepted;"

"5. Up to one hundred percent (100%) in quotas of collective investment funds or exchange-traded investment funds; for which they must have a minimum AA+ qualification registered in the Public Cataster of the Securities Market; or, participation units of investment funds that have a minimum AA+ qualification and that are aligned with the investment policies of insurance companies or reinsurance companies in terms of security, liquidity, and profitability, in that order. The investment in each fund cannot exceed a participation of fifteen percent (15%) of the total of its quotas or participation units;".

"7. Up to one hundred percent (100%) in the following issuers: Sovereign Governments, Central Banks, Multilateral Organizations, and Supranational Organizations.
When it comes to sovereign governments and central banks, the countries must have a "AA" country rating, granted by international risk agencies Standard & Poor's, Fitch Ratings, or Moody's Investors Service.
In the event that one of the countries maintains two or more sovereign risk ratings from international risk agencies, the most conservative rating will be considered.
The insurance company or reinsurance company must maintain documented evidence that these titles are custodied by primary brokers dealers of the FED or the European Commission, and that these investments correspond to the insurance company or reinsurance company.
Investments will be made exclusively in instruments represented in United States dollars".

Article 4.- After Article 12 of Chapter VII "Norm on the Segments and Maximum Percentages of Mandatory Investment", Title III "On the Surveillance, Control and Information of the Private Insurance System", Book III "Private Insurance System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, add the following article:

"Art. 13.- Other investments: Insurance and reinsurance companies may maintain or make other investments different from those regulated in this norm, provided they are not prohibited, and comply with the risk parameters established by the entity on the credit quality of the issuer and concentration levels. These investments will not be considered as part of mandatory investments".

Article 5.- Eliminate the Fourth Transitional Provision of Chapter VII "Norm on the Segments and Maximum Percentages of Mandatory Investment", Title III "On the Surveillance, Control and Information of the Private Insurance System", Book III "Private Insurance System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions; and, renumber the "Fifth" Transitional Provision as "Fourth".

FINAL PROVISION. - This resolution will enter into force from its issuance, without prejudice to its publication in the Official Register.

The publication on the institutional website and the update of the Codification of Monetary, Financial, Securities, and Insurance Resolutions are entrusted to the General Secretariat of the Central Bank of Ecuador.

COMMUNICATE AND PUBLISH. - Given in the city of Quito D.M., on July 28, 2026.

THE PRESIDENT
Mgs. Gustavo Estuardo Camacho Dávila

RESOLUTION No. JPRFM-2026-032-S
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The preceding resolution was approved by the Board of Financial and Monetary Policy and Regulation, in session of July 28, 2026, and signed by the Master Gustavo Estuardo Camacho Dávila, President of the Board of Financial and Monetary Policy and Regulation, in the city of Quito D.M., on July 29, 2026.- I CERTIFY.
TECHNICAL SECRETARIAT
Abg. Ninoska Geovanna Ceballos Pin