Lima, 26 March 2002

S.B.S. Resolution No. 288-2002

The Superintendent of Banking and Insurance

WHEREAS:

That, by means of Circular S-570-97 of 19 November 1997, the rules for the establishment of provisions for doubtful collection accounts were issued, which incorporated current accounts with reinsurers;

That, based on the experience gained, it is necessary to establish clarifications in the application of the aforementioned rule in order to continue promoting the adequate identification and administration of the reinsurance risk of the companies;

That, likewise, it is necessary to update the information of the current accounts with reinsurers and coinsurers in order to adequately monitor them;

In accordance with the opinion of the Deputy Superintendencies of Insurance and Legal Advisory; and,

In use of the powers conferred by numerals 9 and 13 of article 349 of the General Law and of the faculties conferred by SBS Resolution No. 1028-2001 of 27 December 2001;

RESOLVES:

Article One.- To approve the rules for the control of accounts receivable and payable to reinsurers and coinsurers, which form an integral part of this Resolution.

Article Two.- To leave without effect numeral 1 of Circular No. S-570-97 of 19 November 1997, as well as annexes I and II.

Article Three.- This Resolution enters into force on the day following its publication in the official newspaper “El Peruano”.

Register, communicate and publish.

SOCORRO HEYSEN ZEGARRA
Superintendent of Banking and Insurance (e)

RULES FOR THE CONTROL OF ACCOUNTS RECEIVABLE AND PAYABLE TO REINSURERS AND COINSURERS

CHAPTER I GENERAL ASPECTS

Scope

Article 1.- This rule is applicable to insurance and reinsurance companies established in the country, hereinafter companies.

Definitions

Article 2.- For the purposes of this rule, the following definitions shall be considered:

a) Reinsurance: International contract by means of which risks are transferred or dispersed from an insurance company called cedent to another company called reinsurer or assignee.

b) Obligatory Reinsurance: Also called automatic, that by means of which the cedent company is contractually obliged to mandatorily cede a percentage of the portfolio of a determined risk, which the reinsurer is obliged to accept and to participate in the risks, in the premiums and in the claims. The participation is based on the insured sum.

c) Individual Facultative Reinsurance: Contract in which the cedent company transfers to the reinsurer a percentage of a policy or an individual risk based on the insured sum.

d) Non-Proportional Reinsurance: Contract in which the insurance or cedent company buys protection for its portfolio against claims that exceed its capacity, whereby the reinsurance company does not participate proportionally either in the insured sum, or in the premium, or in the claim, but contributes to those claims that exceed a determined amount whose value is fixed in the contract. The coverage may be per risk, per event, per period, or by combination of these. Automatic Non-Proportional Reinsurances in the case of portfolios and Facultative Non-Proportional Reinsurances in the case of individual insurances, for the purpose of this rule, shall be considered incorporated in this definition.

e) Coinsurance: Insurance operation in which two or more insurers concur, with the consent of the insured, to cover the insured risk proportionally to their participation in the contract, and reinsurance contracts may subsequently be entered into to transfer the assumed risk.

f) Superintendency: Superintendency of Banking and Insurance

Formalities of the Reinsurance Contract

Article 3.- 1

[1] Left without effect by SBS Resolution No. 282-2003 of 06-03-2003.

CHAPTER II ACCOUNTS RECEIVABLE AND PAYABLE TO REINSURERS AND COINSURERS

Technical current accounts

Article 4.- The technical current accounts correspond to the statements of account, by type of contract, prepared by the reinsurance area, or whoever acts in its place, that support the balances of the reinsurers and coinsurers current accounts, which must contain at least the information indicated below:

1. Individual Facultative Contracts: Whose statements of account must be prepared for each individual facultative contract. They must be pre-numbered and allow the identification of the premiums ceded or received, of each claim indicating the name of the insured and the date of occurrence, the commissions or other concepts, such as the payments made and received with indication of the number of the cash voucher, and the balance at the end of each month.

2. Automatic Contracts: Whose statements of account must be kept individually for each reinsurer and by type of risk. They must be pre-numbered and allow the identification of the number of the cession schedule, of claims and of other concepts, such as the payments made and received with indication of the number of the cash voucher, and the balance of the month.

3. Non-Proportional Contracts: Whose statements of account shall be adapted, as applicable, to numerals 1 and 2 of this article, according to whether they are automatic or facultative.

4. Contracts with coinsurers: Whose statements of account must follow the treatment of automatic contracts and must be kept by coinsurer.

Reinsurers and Coinsurers Current Accounts

Article 5.- The reinsurers and coinsurers current accounts comprise the accounts receivable and payable expressed in nuevos soles, resulting from the compilation and summary of the technical current accounts. They are presented by type of contract and by reinsurer or coinsurer and constitute the basis of items 14 "Accounts receivable from reinsurers and coinsurers" and 24 "Accounts payable to reinsurers and coinsurers" of the Balance Sheet, monthly reported to this Superintendency.

CHAPTER III ON RECONCILIATIONS AND PROVISIONS

Documentation between counterparty companies

Article 6.- Companies that maintain coinsurance and reinsurance operations with others must consider the following:

• Account statements must be sent to counterparty companies within fifteen (15) days following the closing date of each month.

• The cession schedules must be sent to counterparty companies within a period that may not exceed thirty (30) days from the issuance of the invoicing.

Reconciliations

Article 7.- Reconciliations with reinsurance and coinsurance companies shall be required by the Superintendency in cases where the counterparty's balances do not coincide with the book balances shown by the company. In such cases, the company may not consider as reconciling items those belonging to itself. In the reconciliations, only items pending accounting by the counterparty with an age exceeding 60 days, after receipt of the account statement, shall be included.

This Superintendency may order the accounting record of obligations not accounted for by the company accepting the risk that are recorded by the ceding company, if in its judgment there is evidence supporting the aforementioned liabilities.

Provisions

Article 8.-

The items that make up the debit balances of the current accounts of reinsurers and coinsurers, in the event of overdue collection periods, shall be provisioned as follows:

a) Those maintained without movement for periods equal to or greater than six (6) months shall be provisioned at fifty percent (50%) of the amount of the individual debtor items or of the net debit balance, as applicable.

b) Those maintained without movement for periods equal to or greater than twelve (12) months shall be provisioned at one hundred percent (100%) of the amount of the individual debtor items or of the net debit balance, as applicable.

c) The provision corresponding to automatic reinsurance contracts shall be made for the net debit balance of the respective current account with each reinsurer. In the case of facultative reinsurance, excess of loss, catastrophic risk and other modalities of contracts other than automatic reinsurance contracts, the provision shall be made for the amount of the individual items that prove to be uncollectible. In both cases, the periods established in the preceding letters shall apply.

Likewise, when in the judgment of the Superintendency it is considered that there is no certainty of collection or of compliance with the obligations on the part of the reinsurer, the corresponding provision must be made.

CHAPTER IV ON INFORMATION

Information to the Superintendency 2

Article 9.-

Companies must submit to this Superintendency the information indicated in the following annexes that form an integral part of this Resolution:

Annex No. 1 "Current accounts with reinsurers and/or coinsurers - Detail of balances reported in the Balance Sheet" on a quarterly basis.

Annex No. 2 "Current accounts with reinsurers and/or coinsurers - Analysis of debtor items by age of balances and determination of provisions", on a quarterly basis.

Such information must be submitted within thirty (30) days following the end of each quarter, except for the annexes containing the information corresponding to the fourth quarter of the year, which must be submitted within forty-five (45) days following the end of said quarter.

[2] Article amended by Resolution 1584-2004 of 17-09-2004.

In the case of information in foreign currency, the accounting exchange rate established by this Superintendency must be used, in accordance with the provisions of Circular No. G-092-2001 of 16 February 2001

Automated information system

Article 10.-

Companies must have an information system that allows verification of the information submitted to this Superintendency. In this sense, said system shall be required to provide, at a minimum, the information referred to in article 4, with the detail contained in the models indicated below:

Model No. 1 "Technical current accounts of individual facultative reinsurance contracts".

Model No. 2 "Technical current accounts of automatic reinsurance contracts".

In the case of technical current accounts of non-proportional reinsurance contracts, Models No. 1 or No. 2 must be used, depending on whether they are automatic or facultative contracts. In the case of coinsurance, Model No. 2 shall be used

The information referred to in this article shall be presented at the request of this Superintendency and must allow its conversion to EXCEL format.

CHAPTER V ON INFRACTIONS AND SANCTIONS

Classification of the infraction

Article 11.- 3

TRANSITORY PROVISIONS

First.- Companies shall send the information referred to in article 9 of this norm on a quarterly basis starting from the one corresponding to 30 September 2002; in the meantime they shall continue presenting said information semi-annually.

Second.- Companies must have recorded as of 30 March 2002, the items contained in their reconciliation that correspond to the company itself. Likewise, they must record the debtor and creditor items, pending accounting, corresponding to the counterparty reinsurance or coinsurance companies within a period that will expire on 30 September 2002.

Third.- The companies shall have a period ending on 30 June 2003 to implement the automated information system referred to in article 10 of this regulation.4

[3] Left without effect by Resolution SBS N° 282-2003 of 06-03-2003.

ANNEX N° 1

CURRENT ACCOUNTS WITH REINSURERS AND/OR COINSURERS DETAIL OF BALANCES REPORTED IN THE GENERAL BALANCE SHEET AS OF ....................... (In Nuevos Soles)

SBS CODES (*)	NAME OF THE COMPANIES AND DETAIL OF THE CONTRACTS	PREMIUMS CEDED (1)	PREMIUMS RECEIVED	CLAIMS CEDED	CLAIMS RECEIVED	COMMISSIONS RECEIVED	PREMIUM DISCOUNTS AND OTHERS	DEBIT BALANCE	CREDIT BALANCE
	Automatic Contracts Reinsurance Companies
	Facultative Contracts Reinsurance Companies
	Excess of Loss Contracts Reinsurance Companies
	Others Reinsurance Companies
	Coinsuring company :
	TOTAL

[*] SBS Code of Reinsurers, of Registry of Brokers or Code of National Company.

[1] Premiums before discount

General Manager
Technical Manager
General Accountant

ANNEX N° 2

CURRENT ACCOUNTS WITH REINSURERS AND/OR COINSURERS ANALYSIS OF DEBIT ITEMS BY AGE OF BALANCES AND DETERMINATION OF PROVISIONS AS OF ....................... (In Nuevos Soles)

NAME OF THE COMPANIES AND DETAIL OF CONTRACTS	LESS THAN 6 MONTHS OF AGE	6 OR MORE MONTHS OF AGE	12 OR MORE MONTHS OF AGE	TOTAL OF ITEMS TO BE PROVISIONED
Reinsurance Companies ?? Automatic Contracts Reinsurance company ?? Facultative Contracts Reinsurance company ?? Excess of Loss Contracts Reinsurance company ?? Others (specify) Reinsurance company
Coinsuring companies :
TOTAL

General Manager
Technical Manager
General Accountant

MODEL N° 1

INDIVIDUAL FACULTATIVE CONTRACTS - LOCAL AND FOREIGN REINSURER

STATEMENT OF ACCOUNT N°
NAME OF THE REINSURER
AS OF .......................
( Type of Currency) (1)

Insured
Validity
Risk
SBS Code of the reinsurer

DATES	DETAIL	PREMIUMS CEDED (*)	PREMIUMS RECEIVED	CLAIMS CEDED	CLAIMS RECEIVED	COMMISSIONS RECEIVED	DISCOUNTS AND OTHERS (DEBITORS)	OTHER CONCEPTS (CREDITORS)	DEBIT BALANCE	CREDIT BALANCE
	Balance previous month: - Detail of each operation with indication of the N° of the originating accounting document
	Less (-) Payments received / made
TOTALS

[*] Premiums before discount

[1] In the case of contracts in foreign currency, record in dollars

[Nota:] Note: Record the sum of debit items and the sum of credit items without netting.

MODEL No. 2 AUTOMATIC CONTRACTS - LOCAL AND FOREIGN REINSURER

STATEMENT OF ACCOUNT No.
NAME OF THE REINSURER (COINSURER)
AS OF .......................
(Type of Currency) (1)

Validity
Risk
SBS Code of the reinsurer

NAME OF THE COMPANIES AND DETAIL OF THE CONTRACTS	PREMIUMS CEDED (*)	PREMIUMS RECEIVED	CLAIMS CEDED	CLAIMS RECEIVED	COMMISSIONS RECEIVED	OTHER CONCEPTS	DEBIT BALANCE	CREDIT BALANCE
Balance previous month: - Detail of each operation with indication of the No. of the schedule and source accounting document
Less (-) Payments received / made
TOTAL

[*] Premiums before discount

[1] In the case of contracts in foreign currency, record in dollars

[Nota:] Note: Record the sum of debit items and the sum of credit items and net the balance.