Resolution SBS No. 02571-2022: Amending the Regulation on Capital Requirements for Insurance and Reinsurance Companies

Los Laureles Nº 214 - Lima 27 - Perú Telf. : (511)6309000 Lima, August 17, 2022 Resolution S.B.S. No. 02571 -2022 The Superintendent of Banks, Insurance and Private Pension Fund Administrators

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 modifications, hereinafter General Law, establishes in its articles 298 and following the minimum capital requirements that insurance and reinsurance companies must comply with;

That the Regulation on Capital Requirements for Insurance and Reinsurance Companies, approved by Resolution SBS No. 1124-2006 and modifying norms, establishes, among other aspects, the methodology for calculating the solvency margin that insurance and reinsurance companies must follow;

That, it is necessary to modify the aforementioned Regulation on Capital Requirements, in order to update the calculation of the solvency margin for Previsional Insurance based on run-off portfolio claims, so that such estimation is in line with the behavior of claims in the time horizon evaluated for the calculation;

That, for the purpose of collecting opinions from the general public regarding the proposal to modify the aforementioned regulatory framework, the prepublication of the draft resolution on the matter was ordered on the electronic portal of the Superintendence, under the provisions of the Thirty-Second Final and Complementary Provision of the General Law and Supreme Decree No. 001-2009-JUS;

Having the approval of the Adjunct Superintendencies of Insurance, Economic Studies and Legal Advice; and,

In exercise of the powers conferred by items 7, 9 and 13 of Article 349 of the General Law;

RESOLVES:

Article First. - Modify the Regulation on Capital Requirements for Insurance and Reinsurance Companies, approved by Resolution No. 1124-2006 and modifying norms, according to the following:

1. Modify item 6.4.1 "Previsional Insurance" of Article 6 "Calculation Procedure" in the following terms:

"6.4.1 Previsional Insurance

Los Laureles Nº 214 - Lima 27 - Perú Telf. : (511)6309000 The solvency margin for previsional insurance operations - invalidity, survival and funeral expenses - of the Private Pension System (Law No. 25897 and modifications), is determined as follows: (…) Run-off portfolio Includes previous risk management contracts and previous collective contracts (SISCO) prior to the current SISCO. The solvency margin must be calculated separately for each SISCO contract and for the entire run-off portfolio prior to SISCO. The solvency margin is calculated based on the information contained in the financial statements and is equal to the result of applying the following procedure: a) Based on claims from the last twelve (12) months (Table No. 8.1): a.1) The amount of accepted insurance and reinsurance claims from the last twelve (12) months, net of cancellations, will be calculated. a.2) 14.5% of a.1) will be obtained. a.3) The amount obtained in a.2) will be multiplied by the retention ratio, which will be obtained from the corresponding reinsurance contract. This retention ratio may not be less than 0.30. The solvency margin for previsional insurance is equal to the sum of the result obtained in the current portfolio and in the run-off portfolios, none of these values being less than zero."

2. Modify the formats of Tables No. 8 and No. 10 of Annex ES-7C "Solvency Margin Information", according to the attached annex to this resolution, which is published on the Institutional Portal (www.sbs.gob.pe) in accordance with the provisions of Supreme Decree No. 001-2009-JUS.

Article Second. - This Resolution enters into force on January 1, 2023.

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MARIA DEL SOCORRO HEYSEN ZEGARRA Superintendent of Banks, Insurance and AFP