Resolution No. 0039-2002: Approves the Regulation on Eligible Investments of Insurance Companies

Lima, January 16, 2002
S.B.S. Resolution
No. 0039-2002

The Superintendent of Banking and Insurance

CONSIDERING:

That, the General Law of the Financial System and the Insurance System and the Organic Law of the Superintendence of Banking and Insurance, Law No. 26702 and its respective modifying laws, hereinafter General Law, establishes in its articles 311 and following the regime for the investments that back the technical reserves, the minimum solvency capital, and the guarantee fund of insurance and/or reinsurance companies;

That, the Superintendence approved the Regulation on Eligible Investments of Companies in the Insurance System, through SBS Resolution No. 165-98 of February 5, 1998, which established the characteristics that investments had to meet to be considered eligible for covering the obligations indicated in the General Law;

That, life insurance and general line insurance correspond to activities of different nature and risks, so it is necessary to recognize this difference in investment limits for backing technical obligations;

That, likewise, it is necessary to clarify the characteristics of the assets that back the technical obligations of companies;

Being in accordance with the opinion of the Adjunct Superintendencies of Insurance and Legal Advice; and,

In exercise of the powers conferred by numeral 7 of article 349 of the General Law and in accordance with what is provided in SBS Resolution No. 1028-2001;

RESOLVES:

Article First.- Approve the Regulation on Eligible Investments of Insurance Companies, which forms part of this Resolution. From the entry into force of the aforementioned Regulation, SBS Resolutions No. 165-98 of February 5, 1998, No. 1260-98 of December 22, 1998, No. 828-2000 of November 16, 2000, and No. 316-2001 of April 30, 2001, Article 14 of the Mortgage Bonds Regulation approved by SBS Resolution No. 1081-99 of December 7, 1999, and Article Fourth of SBS Resolution No. 778-2000 of October 24, 2000, shall be null and void.

Article Second.- This Resolution shall enter into force as of January 31, 2002, so the information corresponding to said month must be prepared taking into account what is stated in this norm.

Register, communicate, and publish.

SOCORRO HEYSEN ZEGARRA
Superintendent of Banking and Insurance (e)

REGULATION ON ELIGIBLE INVESTMENTS
OF INSURANCE COMPANIES 1

CHAPTER I
ON GENERAL ASPECTS

Scope

Article 1.- This Resolution is applicable to the companies indicated in letter D of article 16 of the General Law, hereinafter companies.

Definitions

Article 2.- For the application of this Regulation, the following definitions are considered:

a) Technical Obligations: The total of technical reserves, solvency capital, deferred premiums, unsafe practice, the guarantee fund, the requirement for effective capital to cover credit risk, as well as the requirement for additional effective capital by economic cycle. 2

b) Eligible Investments: Assets that comply with the provisions contained in article 4 of this Regulation and are intended to back technical obligations.

c) Life Companies: Those authorized to cover risks conditioned by the existence of the insured, as indicated in the definitions stated in the Glossary of the General Law, and considering what is provided in SBS Resolution No. 937-2001.

d) General Line Companies: Those authorized to cover all other lines or risks not included in the definition of life lines.

e) Mixed Companies: Those authorized to operate simultaneously in life lines and general lines that are subject to the norms for the accounting identification of life line and general line operations of insurance companies approved by SBS Resolution No. 1141-99.

f) Foreign Companies: Companies constituted abroad.

g) CONASEV: National Commission for the Supervision of Companies and Securities.

h) Short-term Instruments: Those referred to in the Securities Market Law, Legislative Decree No. 861.

i) Mutual Funds for Investment in Securities: Those referred to in the Securities Market Law, Legislative Decree No. 861.

j) Investment Funds: Those referred to in the Law on Investment Funds and their Administrators, Legislative Decree No. 862.

k) Product: Those referred to in the Law on Product Exchanges, Law No. 26361.

General Considerations

Article 3.- Companies must adhere to the following provisions in the process of covering their technical obligations:

a) Companies must at all times back their technical obligations with eligible investments in accordance with what is established in this Regulation.

b) When determining their eligible investments, companies must ensure that there is a match, in terms of time and currency, with their technical obligations.

1 Regulation repealed by SBS Resolution No. 1041-2016, dated 26.02.2016.
2 Literal modified by SBS Resolution No. 2904-2014, dated 15.05.2014.

c) Companies must have full availability of the assets and resources involved in the operations that constitute their eligible investments. Likewise, they must have the documentation that accredits the ownership of said investments.

d) To back their technical obligations, companies will assign eligible investments in the following order: to back technical reserves, solvency capital, deferred premiums, and unsafe practice, and finally, the guarantee fund.

e) Mixed companies will determine their technical obligations in accordance with what is provided by the “Norms for the Accounting Identification of Life Line and General Line Operations of Insurance Companies”, approved by SBS Resolution No. 1141-99 of December 31, 1999, and will apply separately the investment regimes established in this regulation.

CHAPTER II
ON ELIGIBLE INVESTMENTS AND
LIMITS BY INVESTMENT LINE

Eligible Investments

Article 4.- Eligible investments may be made in the assets indicated below, whether represented by physical titles or book entries, as appropriate:

a) Cash: this line comprises available funds existing in the company's treasury, both in vault and in current account, in national and/or foreign currency. Fixed funds intended to cover administrative expenses and current accounts subject to restriction are not considered.

b) Deposits and time deposits of any nature in companies of the financial system of the country or abroad: comprises savings and time deposits, negotiable and non-negotiable certificates of deposit, and bank certificates; as well as other non-negotiable instruments that accredit the holding of funds in companies of the financial system of the country or abroad, in national or foreign currency. Deposits in guarantee and those subject to restrictions are not considered.

c) Securities issued by the Central Government or by the Central Reserve Bank of Peru: this line includes titles representing debt of various nature, issued by the Central Government or by the Central Reserve Bank of Peru, whose term has not expired. Brady Bonds issued by the Central Government are included in this investment line.

d) Titles representing the funds raised by companies of the financial system: under this line, bonds issued by companies of the financial system of the country and abroad are considered. In addition to said instruments, bonds, short-term instruments, titles issued with backing of fiduciary assets constituted by companies of the financial system of the country and abroad, in the capacity of settlors, and other negotiable instruments of similar nature are considered. 3

e) Letters, bonds, certificates, and other mortgage instruments: this line includes investments in instruments linked to mortgage credit contracts, which are regulated by articles 235, 236, and 238 of the General Law.

f) Classified corporate bonds: under this line, bonds of various modalities of companies not belonging to the financial system are considered, even those issued within securitization processes, with terms greater than one year. Bonds issued by foreign companies or within foreign securitization processes are also considered, which must be registered in the securities registry existing in the country of origin of the issuer or in the one where the issuance takes place.

g) Shares listed on the stock exchange and units of mutual funds for investment in securities: investments in these instruments may be made in the following lines:

g.1) Shares, preferred participation certificates, and securities representing shares in deposit (American Depositary Receipts, Global Depositary Receipts, and similar) listed in centralized trading mechanisms and registered in securities registries in the country of origin of the issuer or in the one where the issuance takes place.

g.2) Units of mutual funds for investment in securities, which are registered in CONASEV or subject to supervision by entities similar to it and registered in the securities registry of the country of origin or that in which they are quoted.

h) Financial instruments issued or guaranteed by other States or Central Banks of foreign countries, by multilateral credit institutions, or by first-category foreign banks according to the relationship published by the Central Reserve Bank of Peru, duly qualified by prestigious international risk rating agencies. It also includes short or long-term instruments issued within securitization processes in which the settlors are first-category foreign banks, provided they are registered in the securities registry existing in the country of origin of the issuing bank or in the one where the issuance takes place.

i) 4
Urban real estate located in the national territory: under this line, company real estate is considered, whose ownership right is registered in the Real Property Registry or the Cadastre, provided they are free of liens and encumbrances. This line also includes disbursements that will be made in the construction projects of commercial real estate according to what is stated in article 4-a.

j) Premiums receivable for disability and survivorship insurance, balance of individual accounts of insured affiliates of the Private Pension System, and Recognition Bonus: To be considered eligible investments, premiums receivable must be accredited, and those that are in litigation for collection cannot be considered. The Individual Capitalization Account and the Recognition Bonus will serve as backing for the Technical Reserves for disability and survivorship. In the case of Recognition Bonuses, those that have the title and/or certificate issued by the Office of Pension Standardization will be considered; those that do not have said title and/or certificate will be considered eligible investments for a maximum period of two (2) years, from the date of payment of the preliminary disability and survivorship pension.

k) Unearned and accrued premiums receivable, arising from insurance contracts with a clause for termination for non-payment: Under this line, unearned and accrued premiums receivable is considered the lesser amount resulting from comparing the total of unearned premiums receivable from insureds according to the balance, minus financing interest on premiums and the General Sales Tax (IGV), and unearned direct premiums considered in the calculation of the reserve for risks in progress.

l) Loans secured by life insurance policies: under this line, loans granted up to the limit of the surrender value of life insurance are considered, with an interest rate not lower than the technical rate considered in the calculation of the mathematical reserve.

Inciso modified by SBS Resolution No. 0799-2008 of 27-03-2008 Inciso modified by SBS Resolution No. 1149-2002 of 21-11-2002.

m) Unearned premiums receivable from general insurance ceding companies, pursuant to reinsurance contracts: Unearned premiums receivable are determined according to the payment terms established in reinsurance contracts.

n) Other investments: companies may invest in the following investment instruments:

n.1) Short-term instruments, issued by national or foreign companies, that do not belong to the financial system, or within securitization processes in which the national or foreign settlors are not companies of the financial system.

n.2) Repo operations carried out in centralized trading mechanisms of the country, and repurchase agreements carried out in the country provided that the underlying investment instrument meets the requirements to be an eligible investment. Likewise, repo operations in the Product Exchange wheel and repurchase agreements on product deposit certificates.

n.3) Participation certificates of national or foreign investment funds that are registered in CONASEV or subject to supervision by entities similar to it.

n.4) Real estate credits, which include: 6

n.4.1) Negotiable Mortgage Credit Titles (TCHN) complete and updated.

n.4.2) Real estate credits for the acquisition of future goods initially instrumented in promissory notes and subsequently in a TCHN, provided they have backing of cash deposits, guarantee letters, and/or instruments that qualify as eligible investments for covering technical obligations, included in letters a) to h), n.1) and n.3) above. This is to guarantee the construction of the real estate, its independence, and the constitution of a first and preferential mortgage in favor of the company.

n.4.3) Mortgage credits that companies of the insurance system grant to their employees.

In all cases, the classification of the debtor must be “Normal”, in accordance with the Regulation for the Evaluation and Classification of the Debtor and the Requirement of Provisions, approved by SBS Resolution No. 11356-2008 and its modifying norms. Likewise, they are subject to what is provided in the Regulation for the Classification and Valuation of Investments of Insurance Companies, approved by SBS Resolution No. 7034-2012, and the Chart of Accounts for Companies of the Insurance System, approved by SBS Resolution No. 348-95 and its modifying norms.

n.5) The Superintendence may authorize investments in assets other than those mentioned in this Regulation, for which effect companies must substantiate the quality of the instruments. 7

Disbursements in Real Estate Projects 8

Article 4-a.- Companies may request the Superintendence that the disbursements they make in the construction projects of commercial real estate developed based on real rights be considered as eligible investments. For the effect of the corresponding authorization, the following documentation must be sent to the Superintendence:

i) The contract that confers the real right duly registered;

ii) The commitment letter by which the company undertakes to register the real estate in its name, once the construction of the real estate is finished.

Inciso modified by SBS Resolution No. 1183-2007 of 27-08-2007 and modified again by SBS Resolution No. 2904-2014, dated 15.05.2014.
Inciso incorporated by SBS Resolution No. 1183-2007 of 27-08-2007.
8 Article incorporated by SBS Resolution No. 0799-2008 of 27-03-2008

These flows will only be considered eligible investments to the extent that no liens or encumbrances affecting the company's real rights are presented.”

Limits by Line

Article 5.- For the purpose of covering technical obligations, companies must observe the limits indicated in the following table; in addition, the Superintendence may establish sub-limits by lines when it deems appropriate.

Literal of article
4º
Eligible Investment
Limit in general line companies (1)
Limit in life companies (1)
Calculation Base a) Cash 5% 2% Technical Obligations b) Deposits and time deposits 40% 40% Technical Obligations c) Central Government or BCR Securities 30% 40% Technical Obligations d) Titles repr. of funds raised by financial system 40% 40% Technical Obligations e) Letters, bonds, certificates, and other mortgage instruments 30% 40% Technical Obligations f) Corporate bonds 75% 75% Technical Obligations 9 g) Shares and mutual funds for inv. in securities 40% 20% Technical Obligations g.1) Shares, preferred participation certificates, and securities representing shares in deposit 30% 20% Technical Obligations g.2) Units of mutual funds for investment in securities 30% 20% Technical Obligations h) Instruments issued by States and others 30% 40% Technical Obligations i) Urban real estate 25% 15% Technical Obligations j) Premiums receivable, individual AFP accounts, and Recognition Bonus Receivables for disability and survivorship insurance will serve as backing for the Mathematical Reserves that gave rise to them, with no limit whatsoever up to 100% of the reserves k) Unearned and accrued premiums receivable The receivable corresponding to unearned and accrued premiums is considered as investment, up to 10% of solvency capital and up to 100% of the reserve for risks in progress l) Loans secured by life insurance policies The amount resulting from the calculation established in literal l) of article 4º is destined to back the mathematical reserve of the insurance that gave rise to it m) Unearned premiums receivable from general insurance cedents The assets indicated in literal m) of article 4º back the technical reserves of the lines to which the premiums correspond n) Other investments 50% 50% Technical Obligations n.1) Short-term instruments 10% 5% Technical Obligations n.2) Repo operations and repurchase agreements 5% 5% Technical Obligations n.3) Investment funds 5% 10% Technical Obligations n.4) 10 Real estate credits 30% 30% Technical Obligations

(1)
Modified by Errata published on 23.01.2002
Percentages modified by SBS Resolution No. 17009-2010 of 09-12-2010

n.4.1) Negotiable Mortgage Credit Titles
(sub-limit)
30% 30% Technical Obligations n.4.2) Real estate credits for acquisition of future goods instrumented in promissory notes (sub-limit) 10% 10% Technical Obligations 11 n.4.3) Mortgage credits to employees 2% 2% Technical Obligations n.5) Others 30% 30% Technical Obligations

CHAPTER III
ON OTHER INVESTMENT LIMITS

Global Limit of Investments Abroad

Article 6.- The total of investments in instruments issued by foreign companies or issued within foreign securitization processes may not exceed 40% of technical obligations.

Diversification Limit per Issuer in Each Investment Line 12

Article 7.- Investments in the instruments mentioned in letters b), d), e), f), g), h), n.1) and when pertinent in letter n.5) of article 4 of this Regulation that have been issued by the same issuer; may not exceed 10% of technical obligations in each line.

The credits contemplated in letters n.4.1), n.4.2) and n.4.3) of article 4 of this Regulation that have been granted to the same borrower, may not exceed 10% of obligations in each sub-line.

The limits and sub-limits stated in the preceding paragraphs are not applicable to investments in participation certificates in mutual funds for investment in securities.

Global Limits per Issuer and Economic Group

Article 8.- The total of investments in the instruments referred to in letters b), d), e), f), g), h), n.1), n.2), n.4.1), n.4.2), n.4.3) and, when pertinent, n.5) of article 4 of this Regulation may not exceed 20% of technical obligations, when they are issued or the credits have been granted to the same legal entity or to the same economic group. For the effect of what is provided above, repo operations, with the exception of those carried out in the product exchange, and repurchase agreements on underlying assets that are considered eligible investments will be calculated based on the issuer of the instrument subject to said operation.

In the case of repurchase agreements on product deposit certificates, the guarantor or natural demander will be considered according to what is stated in article 16 of this norm. 13

The investments referred to in the previous paragraph, when issued by legal entities that are part of the economic group of the company, may not exceed 10% of technical obligations.

Nos incisos n4) and n5) have been modified by resolution 1183-2007 of 27-08-2007 Reference modified by SBS Resolution No. 1850-2007 of 14-12-2007
Article modified by SBS Resolution No. 1183-2007 of 27-08-2007.
Paragraph modified by SBS Resolution No. 1183-2007 of 27-08-2007

The determination of economic groups will be carried out in accordance with the provisions of the special regulations on affiliation and economic groups, approved by SBS Resolution No. 445-2000 of June 28, 2000.
The limits indicated in the preceding paragraphs do not apply to investments in participation certificates of mutual investment funds in securities.
Sectoral Limit
Article 9º.- Eligible investments in a specific economic sector, by country, will have a maximum limit of 70% of technical liabilities.
The limit indicated in the preceding paragraph does not apply to investments in participation certificates in mutual investment funds in securities. 14
CHAPTER IV
ON CLASSIFICATION REQUIREMENTS
Minimum risk classification requirement and companies responsible for granting it 15
Article 10º.- To cover technical liabilities, instruments classified in categories below investment grade cannot be acquired, except for instruments issued by central governments of countries in the American continent, including Peru, in which case the classification may be equal to or higher than the lesser of investment grade and that corresponding to the classification received by Peru.
The risk classifications referred to in this Regulation are subject to the following:
a) In the case of investment instruments issued abroad via public or private offering, the risk classifications referred to in this Regulation must be granted by one of the rating agencies indicated in Circular No. AFP-95-2008 and its amendments. Investment grade is considered to be those long-term instruments classified as BBB- (triple B minus) or lower risk and short-term instruments classified as A-3 or lower risk. b) In the case of instruments issued locally via public offering, the risk classifications referred to in this Regulation must be granted by risk rating companies authorized by the Securities Market Superintendence indicated in Circular No. AFP 044-2004. Investment grade is considered to be those long-term instruments classified as BBB- (triple B minus) or lower risk and short-term instruments classified as CP-3 or lower risk. c) In the case of instruments issued locally via private offering, the risk classifications referred to in this Regulation may be granted by one of the risk rating companies indicated in literals a) or b) above. Classification of issuer and/or guarantor 16
Article 11º.- Investments in instruments indicated in literal b) of Article 4° require that companies in the financial system of the country or abroad possess a risk classification not lower than

14 Paragraph added by SBS Resolution No. 1149-2002 of 21-11-2002.
15 Article modified by SBS Resolution No. 6825-2013 of 15-11-2013 16 Article modified by SBS Resolution No. 6825-2013 of 15-11-2013

investment grade for their long-term debt representative instruments. In the case of multiple operations companies referred to in Article 16° of the General Law, the risk classification granted in accordance with Article 136° of said General Law will be taken into consideration. In the case of foreign financial system companies, the classification must be granted by one of the risk rating companies indicated in literal a) of Article 10°. For the purposes of the provision in subsection h) of Article 4º of this Regulation, in the case of instruments issued or guaranteed by other States and Central Banks of foreign countries, the risk classification of the long-term sovereign debt of the issuer's country is considered, and if there is a guarantor, the risk classification of the long-term sovereign debt of the guarantor's country prevails. Regarding instruments issued or guaranteed by multilateral credit institutions or by first-category foreign banks, the classification corresponds to the instrument. In both cases, the classification must be carried out, at least, by one risk rating company indicated in literal a) of the previous Article 10°. Instruments requiring classification and minimum number of classifications 17
Article 12º.- Investments in instruments of Article 4° that, due to regulatory requirements, require risk classification, including those indicated in subsections c), d), e), f), h) and n.1), must comply with the provisions of Article 10°. For this purpose, the number of required classifications and the determination of the final classification of said instruments are subject to the following:
a) Instruments issued abroad, via public or private offering, must be classified by at least one (1) rating company indicated in literal a) of Article 10°. b) Instruments issued locally, via public offering, must be classified by at least two (2) rating companies indicated in literal b) of Article 10°, with the exception of those carried out under the Regulation of the Market of Institutional Investors, approved by SMV Resolution No. 021-2013-SMV/01 or the norm that replaces it, in which case the number of classifications established in said regulation will be required. c) Instruments issued locally, via private offering, must be classified by at least one (1) rating company indicated in literal c) of Article 10°. In all cases where the investment instrument has two (2) or more different risk classifications, the most conservative one will be taken into consideration. Classification requirements are applicable, where appropriate, to investments that the Superintendence authorizes in accordance with subsection n.5) of Article 4º of this Regulation.” Discrepancy between classifications
Article 13º.- When there is a discrepancy between the classifications assigned by rating companies to an instrument or a company, the classification with the higher risk will be considered.
CHAPTER V
ON VALUATION
Financial Investments 18

17 Article modified by SBS Resolution No. 6825-2013 of 15-11-2013 18 Article modified by SBS Resolution No. 1183-2007 of 27-08-2007

Article 14º.- For the purposes of covering the technical liabilities of companies, this will be carried out complying with the provisions established in the Regulation for the Evaluation and Classification of the Debtor and the Requirement of Provisions for the instruments mentioned in subsections n.4.1), n.4.2) and n.4.3) of Article 4° of this Regulation; and the provisions established in the Regulation of Classification, Valuation and Provisions of the Financial Investments of Insurance Companies for the other instruments, with the exception of the treatment established for investments available for sale, which will be valued on an individual basis.
The provisions referred to in the Regulation for the Evaluation and Classification of the Debtor and the Requirement of Provisions will be calculated on the nominal value of real estate credits.
Investments in urban real estate located in national territory 19
Article 15º.- For the purposes of backing technical liabilities, the value of urban real estate located in national territory will be determined applying the criteria established in the Conceptual Accounting Framework of the Chart of Accounts for Insurance System Companies, approved by SBS Resolution No. 348-95 and its amendments, and in the Regulation of Classification and Valuation of Investments of Insurance Companies.
Properties for own use must be appraised at the beginning and every two years by experts registered in the Registry of Appraisers (REPEV) maintained by the Superintendence. The appraisal report carried out by said experts must contain the commercial value and the realization value of the appraised property. In case of significant changes in the market values of said properties, the Superintendence may order appraisals in periods shorter than indicated
CHAPTER VI
REPURCHASE AGREEMENTS ON PRODUCT DEPOSIT CERTIFICATES Minimum requirements
Article 16.- Repurchase agreements on product deposit certificates must contemplate the following minimum requirements:
a) Observe what is established in articles 17aº and 17bº of Title VI of the Compendium of Regulatory Superintendence Norms of the Private Pension System, as applicable. b) Said repurchase agreement must be structured by a product broker, according to the definitions established in the Regulation of Product Wheel Operations of the Lima Product Exchange, approved by CONASEV Resolution No. 822-97-EF/94.10. c) The repurchase agreement must have a purchase commitment of the product by a natural demander of the products, in case of default by the counterparty of the repurchase agreement, it being necessary that said demander be classified in the Normal category according to what is indicated in SBS Resolution No. 572-97. d) Alternatively to what is established in the previous subsection c), the repurchase agreement must have the guarantee of a financial system company, in case of default by the counterparty of the repurchase agreement. e) These repurchase agreements cannot be structured on operations designated as available with delivery at term or operations with deferred delivery of the Lima Product Exchange according to the Regulation of Product Wheel Operations of the Lima Product Exchange, approved by CONASEV Resolution No. 822-97-EF/94.10.

19 Article modified by SBS Resolution No. 7034-2012 of 19-09-2012

CHAPTER VII
ON THE SUBMISSION OF INFORMATION
Annual Investment Plan
Article 17º.- Companies must annually prepare an investment plan which will indicate, among others, the following aspects:
a) The investment policy to be developed by the company during the fiscal year, which specifies the policy corresponding to eligible investments and that relative to investments not intended to back technical liabilities, including at least the diversification criteria and policies for risk management; b) The projected composition of the portfolio of eligible investments; and, c) The investment procedures and practices, as well as the responsible parties for the implementation and control of said plan, as well as the decision-making instances for the negotiation of investments. Submission of the annual investment plan
Article 18º.- Companies must submit to this Superintendence the following information:
a) The investment plan, which will be presented during the first thirty (30) calendar days of each fiscal year. If the plan suffers substantial changes, the reformed plan must be presented within ten (10) calendar days of the changes occurring; and, b) The quarterly evaluation on the implementation of the investment plan, together with the respective financial statements. Submission of information 20
Article 19º.- Companies must present to this Superintendence the information indicated below, together with the corresponding financial statements:

No. of Annex Designation Periodicity
Annex No. ES-3 Technical Liabilities Monthly
Annex No. ES-4 Eligible Investments Monthly
Annex No. ES-4A Investment in Deposits Monthly
Annex No. ES-4B Investment in debt representative instruments Monthly
Annex No. ES-4C Investment in capital representative instruments Monthly
Annex No. ES-4D Repo operations and repurchase agreements Monthly
Annex No. ES-4E.1 General characteristics of own-use real estate and investments in real estate Monthly
Annex No. ES-4E.2 Sold Real Estate Annual
Annex No. ES-4E.3 Additional characteristics of investments in real estate that generate periodic flows Annual
Annex No. ES-4E.4 Application of discounted cash flow methodology in investments in real estate Quarterly
Annex No. ES-4F Other Instruments Monthly
Annex No. ES-4G Premiums receivable from insured parties not due and not accrued Monthly
Annex No. ES-4H Unaccrued premiums receivable from cedents Monthly

20 Article modified by SBS Resolution No. 7034-2012 of 19-09-2012.

Annex No. ES-4I General characteristics of the underlying real estate of instruments issued by trusts Monthly
In the preparation of the Annexes, the following will be taken into account:

1. The annexes must record all assets of the same class that the company possesses, whether eligible investments or not.
2. The valuations of the investments recorded must correspond to those current on the last calendar day of the period being reported.
   FINAL AND TRANSITORY PROVISIONS
   First.- Transfers of eligible investments for an amount greater than 5% of the technical liabilities corresponding to the previous month must be communicated to the Superintendence on the next business day of occurrence.
   Second.- Investments that have been authorized by the Superintendence on a date prior to this Regulation and are not listed in Article 4º of this norm, will be considered as backing for technical liabilities until December 31, 2002.
   Third.- While the Securities Market Law, Legislative Decree No. 861, does not provide for the classification of other instruments besides those indicated in its Article 280º, the classification of the investments indicated in subsection g) of Article 4º of this Regulation will not be required. The Superintendence may establish through Circular additional requirements that investments indicated in subsection g) of Article 4º of this Regulation must comply with, in case said investments are made abroad. Fourth.- Until December 31, 2013, for the purposes of backing the guarantee fund, companies may assign investments from each of the items indicated in Article 4° of this Regulation, with the exception of those referred to in subsections j), k), l) and m), up to the amount of said fund. Likewise, with respect to the backing of the guarantee fund, the provisions of Articles 5°, 6°, 7º, 8º and 9º of this Regulation will not apply.. Fifth.- For the purposes of the provision in subsection j) of Article 4º of this norm, companies may consider as eligible investments the estimates on Recognition Bonds until June 30, 2003. Sixth.- Life insurance companies will have an adaptation period for the purposes of complying with the investment limits of the assets indicated in subsections g), g.1) and g.2) of Article 4º of this Regulation, according to the following schedule: 22 To Limit 31/12/02 25% 31/12/03 20%

21 Modified by SBS Resolution No. 18030-2010 of 28-12-2010.
22 Modified by SBS Resolution No. 1149-2002 of 21-11-2002.

Seventh.- Companies will have an adaptation period for the purposes of complying with the investment limits of the assets indicated in subsection i) of Article 4º of this Regulation, which for life insurance companies expires on December 31, 2002, while for general insurance companies it will be adjusted to the following schedule: 23 To Limit 31/12/02 29% 31/12/03 28% 31/12/04 25%” Eighth.- The Superintendence may authorize a temporary increase in the limit established in Article 5º of this norm for the investments indicated in subsection c) of Article 4º of life insurance companies by up to an additional 10% of technical liabilities, when said increase aims to adjust the matching between investments and technical reserves to a term greater than 10 years, for the period that said increase fulfills its purpose. Ninth.- The methodological notes of the annexes described in Article 19° may be modified by a multiple letter issued by the Superintendence. 24 Tenth.- Investment instruments issued abroad, via public or private offering, by companies constituted in Peru, may be considered exceptionally as eligible investments if they meet the following conditions: 25
i. The minimum risk classification granted to said instruments, by rating companies indicated in literal a) of Article 10°, is BB- (double B minus) or lower risk for long-term instruments; and,
ii. The local risk classification of the instrument, if it has one, is at least investment grade. If the instrument in question does not have a local risk classification, and the issuer has other long-term instruments issued locally without specific guarantee, these must be at least investment grade. In case both local classifications are available, the risk classification of the instrument subject to the exception will prevail.
If any of the conditions described above are affected, investments in these instruments will cease to be eligible.
Eleventh.- Investments in debt instruments issued by central governments of countries in the American continent, made before the date when Peru achieved an investment grade risk classification, may be maintained as investments covering the technical liabilities of insurance companies until their maturity, provided they do not show a deterioration in their risk classification. 26

23 Substituted by SBS Resolution No. 1149-2002 of 21-11-2002.
24 Provision incorporated by SBS Resolution No. 14292-2009 of 30-10-2009 25 Provision incorporated by SBS Resolution No. 6825-2013 of 15-11-2013 26 Provision incorporated by SBS Resolution No. 6825-2013 of 15-11-2013