Resolution SBS No. 3863-2016: Actuarial Management Regulation for Insurance Companies

Los Laureles Nº 214 - Lima 27 - Peru Tel. : (511)6309000 1/14 Lima, July 13, 2016 S.B.S. Resolution No. 3863-2016 The Superintendent of Banking, Insurance and Private Pension Fund Administrators

CONSIDERING:

That, through SBS Resolution No. 37-2008 and its modifying norms, the Regulation on Integrated Risk Management was approved;

That, the regulatory framework related to risk management must be complemented with specific norms that establish guidelines for each type of significant risk;

That, it is convenient for insurance companies to have actuarial management proportional to the nature, magnitude, and complexity of the risks inherent in their activities;

That, it is necessary to promote the improvement of actuarial management in companies, establishing for this purpose guidelines and minimum requirements for its adequate management;

That, for the purpose of incorporating the review and evaluation of actuarial management as a scheduled activity of the Internal Audit Unit, it is necessary to modify the Internal Audit Regulation, approved by SBS Resolution No. 11699-2008 and its modifying norms;

That, it is necessary to modify the External Audit Regulation, approved by SBS Resolution No. 17026-2010 and its modifying norms; the Claim Reserves Regulation, approved by SBS Resolution No. 4095-2013 and its modifying norms; the Norms for the Registration of Directors, Managers and Principal Officials – REDIR, approved by Circular G-119-2004 and its modifying norms, as well as the Sanctions Regulation, approved by SBS Resolution No. 816-2005 and its modifying norms; in order to adapt these norms to the provisions related to actuarial management;

That, it is necessary to modify the Chart of Accounts for Companies in the Insurance System, approved by SBS Resolution No. 348-95 and its modifying norms, regarding the accounting record of technical reserves;

That, for the purpose of collecting opinions from the general public regarding the proposal to modify the regulation, the draft resolution was published on the electronic portal of this Superintendence, under the provisions of Supreme Decree No. 001-2009-JUS;

Having the approval of the Adjunct Superintendencies of Insurance, Private Pension Fund Administrators, Risks, Economic Studies and Legal Advice; and,

In exercise of the powers conferred by paragraphs 7, 9 and 13 of Article 349 of the General Law of the Financial System and of the Insurance System and the Organic Law of the Superintendence of Banking and Insurance, Law No. 26702 and its modifying norms, hereinafter General Law;

RESOLVES:

Article First.- Approve the Actuarial Management Regulation for Insurance Companies, hereinafter the Regulation, which forms part of this Resolution.

ACTUARIAL MANAGEMENT REGULATION FOR INSURANCE COMPANIES

CHAPTER I
GENERAL PROVISIONS

Article 1.- Scope
This norm applies to the companies included in paragraph D of Article 16 of the General Law.
The provisions of this Regulation are complementary to the provisions of the Regulation on Integrated Risk Management, understanding the latter as the framework norm.
Actuarial management comprises all aspects contained in this Regulation. In this sense, within their responsibilities, the Board of Directors, general management, control functions (actuarial function and technical risk management function) and operational technical areas contribute to actuarial management.

Article 2.- Definitions
For the application of this Regulation, the following definitions must be considered:

a. Sensitivity Analysis.- Technique that estimates the impact that the movement of a particular risk factor could have on the company's financial position. b. Operational Technical Areas.- Those areas within the company's organization that are responsible for the continuous and routine execution of policies, procedures and methodologies regarding pricing, underwriting, establishment of technical reserves, reinsurance, claims management and calculation of capital requirements for technical risk. Within their scope of action, these areas contribute to actuarial management.

c. Methodological document for the calculation of technical reserves.- Document in which the methodology (models, parameters, assumptions and other relevant considerations) that the company carries out for the calculation of total, ceded and retained technical reserves is established, according to the segmentation it has determined (business line, risk, product, etc.). This document applies in cases where this Superintendence has not established the methodology for the calculation of technical reserves, when the company proposes a methodology different from that indicated in the norms and for the establishment of additional technical reserves.
d. Control Functions.- Those functions that are part of an effective risk management and internal control system, and that constitute a source of support for the Board of Directors in the fulfillment of its obligations regarding risk supervision, compliance and controls. Among the control functions are the actuarial function and the technical risk management function. e. Scenario Test.- Technique that estimates the impact that simultaneous movements of a number of risk factors, which make up a scenario, could have on the company's financial position. Scenarios can be historical or hypothetical. f. Stress Test.- Tool that allows simulating adverse events or scenarios that may occur to a company, and is used to evaluate the potential impact of these scenarios on the company's financial position. The stress test involves the use of several techniques, such as sensitivity analysis and scenario testing. g. Regulation on Integrated Risk Management.- Norm approved through SBS Resolution No. 37-2008 and its modifying norms. h. Technical Risk.- The possibility of losses or adverse modification of the value of commitments undertaken by virtue of insurance, reinsurance and co-insurance contracts. In the case of non-life insurance, fluctuations related to the frequency, severity, and settlement of claims are considered. For life insurance, this may include the possibility of losses due to variations in the level, trend or volatility of mortality, longevity, disability, morbidity, renewal or surrender rates of insurance contracts, among other parameters and assumptions, as well as the expenses of executing these obligations. This definition includes underwriting risk. 1
i. SISCO.- Collective insurance policy that administers disability and survival risks, as well as burial expenses, in accordance with the Compendium of Regulatory Norms of the Superintendence of the Private System for the Administration of Pension Funds, approved by Resolution No. 232-98-EF/SAFP and its modifying norms.
j. Expense methodological document.- Document that details the methodology that the company employs for the allocation of expenses, according to the segmentation it has determined (business line, risk, product, etc.). 2

Article 3.- Board of Directors Responsibility
In addition to what is established in the Regulation on Integrated Risk Management, the company's Board of Directors has the following responsibilities associated with actuarial management:

a) Approve and review periodically, at least annually, the objectives, guidelines and strategy for actuarial management; including the level of tolerance and appetite for technical risk. b) Approve and review periodically, at least annually, the policies, procedures and manuals that include aspects related to pricing, underwriting, technical reserves, reinsurance, claims management and the quality of data related to actuarial management. c) Approve the methodological document for the calculation of technical reserves and the expense methodological document, when applicable. 3 d) Approve and review periodically the resources and organizational structure necessary for the fulfillment of the actuarial function and the technical risk management function, in such a way as to ensure carrying out these functions effectively and avoiding conflicts of interest. e) Appoint the official in charge of the actuarial function, even if this function is partially or totally subcontracted by the company. f) Take the necessary measures to periodically monitor exposure to the main technical risks, and ensure the implementation of actions or plans derived from this monitoring.

Article 4.- Management Responsibility
General management is responsible for implementing actuarial management in accordance with the provisions of the Board of Directors and current norms.
Managers of operational technical areas must inform the person in charge of the actuarial function and the technical risk management function of any relevant fact that affects the fulfillment of their respective obligations.

Article 5.- Data Quality
The company must have internal processes and procedures to guarantee that the data used for the calculation of technical reserves are complete, accurate and adequate.
Data are considered complete when they meet the following conditions:

a) They include sufficient historical information to evaluate the characteristics of the underlying risks and identify trends in risks. b) They are available regarding each segment or business line (previously defined by the company) used in the calculation of technical reserves, and no pertinent data is excluded from the calculation without justification.

Data are considered accurate when they meet the following conditions:

a) They do not contain significant errors. In this regard, an error is considered significant when it could influence decision-making or the judgment of users of the calculation result, including the Superintendence. b) Data from different periods used for the same estimation are coherent. c) They are recorded in a timely and coherent manner over time.

Data are considered adequate when they meet the following conditions:

a) They are coherent with the purposes for which they will be used. b) The nature of the data guarantees that the estimates of technical reserves do not include a significant estimation error. In this regard, an estimation error is considered significant when it could influence decision-making or the judgment of users of the calculation result, including the Superintendence. c) They are coherent with the hypotheses on which the actuarial and statistical techniques applied to them are based when calculating technical reserves. d) They adequately reflect the risks to which the company is exposed in relation to its obligations. e) They have been collected, processed and applied in a transparent and structured manner.

When the company does not have sufficient data of adequate quality to apply a reliable actuarial method, it may use approximations to calculate technical reserves, provided that all the following requirements are met:

a) The insufficiency of data is not due to inadequate internal processes and procedures regarding the collection, storage or validation of data used to value technical reserves. b) The insufficiency of data cannot be remedied with external data. c) It is not viable for the company to adjust the data to remedy the insufficiency.

CHAPTER II
CONTROL FUNCTIONS

Article 6.- Actuarial Function
The company must have an effective actuarial function with the objective of carrying out at least the following activities, with a minimum annual frequency:

a) Coordinate the calculation of technical reserves (total, retained and ceded), identifying any inconsistency with the provisions established in the Superintendence's norms for the calculation of said technical reserves, and proposing the necessary corrective measures. b) Ensure the adequacy of the methodologies and underlying models used, as well as the assumptions and parameters employed in the calculation of technical reserves. c) Evaluate the sufficiency and quality of the data used in the calculation of technical reserves. d) Evaluate the reasonableness of technical reserves, by conducting backtesting studies, in order to establish recommendations regarding their sufficiency, as well as to improve current calculations, their methods and procedures. Likewise, evaluate cases in which, based on the principle of proportionality and/or data limitations, it would not be necessary and/or applicable to perform backtesting. 4 e) Pronounce on the general technical reserves policy. f) Pronounce on the general pricing policy. g) Pronounce on the general underwriting policy. h) Pronounce on the general claims management policy. i) Pronounce on the reinsurance policy and the adequacy of reinsurance contracts, as a result of the activities indicated in this article. j) Contribute to the effective application of the risk management system.

The actuarial function will be performed by persons who have sufficient knowledge of reserve valuation, pricing, actuarial and financial mathematics, which are in accordance with the nature, volume and complexity of the risks inherent in the company's activities, and who demonstrate professional experience in actuarial functions. Likewise, they must receive regular training in the areas of their responsibility. Operational technical areas may perform aspects of the actuarial function, proportionally to the nature, scale and complexity of the company's operations and inherent risks.

Article 7.- Actuarial Function Report to the Board of Directors
The official in charge of the actuarial function must prepare a report that must be presented to the Board of Directors at least annually, with scope up to December 31 of each year, and must document all the activities indicated in Article 6, as well as their results. In said report, possible deficiencies must be clearly determined and recommendations on how to remedy them must be formulated. The report must be sent to the Superintendence within ninety (90) calendar days following the close of each year.

Article 8.- Technical Risk Management Function
As a complement to the actuarial function, the company must have a technical risk management function, which fulfills the objective of:

a) Identifying and evaluating, quantitatively or qualitatively, the technical risks emerging from the company's activities. b) Monitoring indicators, limits and/or guidelines, for the follow-up and control of the appetite and tolerance for technical risk, which have been previously defined by the company, which must consider the effects of reinsurance. These indicators, limits and/or guidelines must be associated at least with the underwriting process. c) Evaluate the capital requirements for technical risk or solvency margin, according to current regulation. d) Participate in the effective implementation of the technical risk management system. e) Report continuously and timely to the Risk Committee, general management and operational technical areas on the relevant aspects of technical risk management for timely decision-making.

Article 9.- Technical Risk Management Function Report to the Risk Committee
The person in charge of the technical risk management function must prepare a report on the compliance with the activities of the technical risk management function that must be presented to the Risk Committee, who in turn must forward it to the Board of Directors, at least semi-annually with its respective evaluation and recommendations. Among the topics to be reported, the following must be considered:

i) Exposure to technical risks, their incidence and impact on the company's results and solvency. ii) Deviations that occur with respect to the level of tolerance to technical risks, including the causes that originate such deviations and the proposal of corrective measures.

CHAPTER III
MINIMUM REQUIREMENTS OF ACTUARIAL MANAGEMENT

Article 10.- Assumptions and parameters applicable in pricing and in the calculation of technical reserves
The company must ensure that the assumptions and parameters applicable in pricing and in the calculation of technical reserves (mortality/morbidity tables, technical interest rates, surrender or lapse rates, inflation, expense allocation, among others) are realistic and adequate. For this purpose, the company must support each of these assumptions and/or parameters, identifying their relevance, uncertainty and circumstances in which they would not apply. Assumptions and parameters must be applied coherently over time, without arbitrary changes. The company must detail in the expense methodological document, the allocation methodology for each category of expenses (administration, investment management, acquisition and management or settlement of claims). These categories must take into account the general expenses incurred for the administration of insurance contract obligations. 5

In cases where this Superintendence determines the parameters or methodology for the establishment of a certain type of technical reserve, the company must apply these provisions. However, this does not exempt the company from performing the "backtesting" type methodology validation, as indicated in Article 11 of this Regulation.

When calculating technical reserves, the company must take into account the value of financial guarantees and possible contractual options by the policyholder, included in insurance contracts. Among the contractual options are those of cessation (surrender, suspension, among others) and those of continuity (reactivation, renewal, among others).

Article 11.- Reasonableness of technical reserves
Companies must implement a validation methodology for technical reserves of the "backtesting" type, based on the principle of proportionality, which allows comparing the actual results of a particular period with the corresponding projections made in previous periods for the period considered. "Backtesting" studies must be carried out at least annually, at the end of each fiscal year, and must be available to the Superintendence for the purpose of establishing the reasonableness of the balances of the established reserves; and in case the studies show that the reserves have been insufficient and may compromise the company's solvency, the change and/or modification of methodology or the establishment of additional technical reserves must be carried out in the cases of technical reserves established according to regulatory methodology, as established in Article 12 of this Regulation.

In the case of policy portfolios or risks that have coverage under finite reinsurance contracts, companies must perform an actuarial valuation that must include the estimation of the claims reserve, analysis of the claims payment pattern, as well as the respective variabilities. 6

When the Superintendence detects that the results obtained from the application of the methodologies or models used by companies do not reasonably reflect the patterns of future obligations, claims, or expenses, it will request the company, through an Official Letter, to modify its methodologies within a determined period. If the company does not proceed to modify its methodology by the end of the period established by the Superintendence, it will assign a method to perform the valuation, without prejudice to the sanctions that may apply.

Article 12.- Change of own methodology for the calculation of technical reserves or establishment of additional technical reserves
In the case of those technical reserves where each company has defined its own calculation methodology, the company must modify said methodology when necessary, based on

5 Paragraph incorporated by SBS Resolution No. 1143-2021 of 16.04.2021, effective from 20.04.2021.
6 Paragraph incorporated by SBS Resolution No. 4706-2017 of 06/12/2017.

Los Laureles Nº 214 - Lima 27 - Peru Tel. : (511)6309000 2/14

Los Laureles Nº 214 - Lima 27 - Peru Tel. : (511)6309000 3/14

Los Laureles Nº 214 - Lima 27 - Peru Tel. : (511)6309000 4/14

Los Laureles Nº 214 - Lima 27 - Peru Tel. : (511)6309000 5/14

Los Laureles Nº 214 - Lima 27 - Peru Tel. : (511)6309000 6/14

Los Laureles Nº 214 - Lima 27 - Peru Tel. : (511)6309000 7/14

1 Definition modified by SBS Resolution No. 1660-2025 of 06.05.2025, effective from 10.05.2025.
2 Definition incorporated by SBS Resolution No. 1143-2021 of 16.04.2021, effective from 20.04.2021.
3 Paragraph modified by SBS Resolution No. 1143-2021 of 16.04.2021, effective from 20.04.2021.
4 Paragraph modified by SBS Resolution No. 1856-2020 of 27/07/2020.

Los Laureles Nº 214 - Lima 27 - Perú Telf. : (511)6309000 8/14 result of the "backtesting" study referred to in Article 11 of this Regulation. In such case, the company must deliver to this Superintendence the updated methodological document for the calculation of technical reserves, previously approved by the Board of Directors, and must comply with the specific provisions that this Superintendence has established for each type of technical reserve. This new methodology will apply to both new and existing insurance policies.

In the event that this Superintendence has established parameters or the methodology for calculating technical reserves, and if as a result of the "backtesting" study it is necessary to establish additional technical reserves for a risk or insurance product, the company must deliver to this supervisory body the corresponding methodological document for the calculation of technical reserves, as well as the result of the "backtesting" study, and the amount established, which must be presented within fifteen (15) calendar days after being approved by the Board of Directors. Subsequently, in case of changes in the calculation methodology, or other circumstances that the company considers substantially affect the content of the methodological document, it must inform the Superintendence within the aforementioned deadline.

Such additional technical reserves must be calculated and registered accounting-wise, net of co-insurance and reinsurance, and must be covered at all times with eligible investments referred to in the Regulation on Investments of Insurance Companies, approved by SBS Resolution No. 1041-2016, since these reserves are necessary for the fulfillment of obligations derived from the underwriting of policies and, therefore, are mandatory.

Article 13.- Manuals of policies and procedures
The company must have manuals of policies and procedures that must be implemented by the operational technical areas, the actuarial function, and the technical risk management function, as applicable. Among the aspects that these documents must consider are:
a) Policies and procedures of the actuarial function. b) Policies and procedures of the technical risk management function. c) Policies and procedures for the establishment of technical reserves and for the evaluation of their sufficiency. d) Policies and procedures for the pricing and underwriting of the risks in which the company operates. e) Policies and procedures related to the monitoring of claims experience. f) Policies and procedures for the design of insurance products. g) Policies and procedures for claims management. h) Policies and procedures for reinsurance management and other technical risk transfer techniques. i) Policies and procedures for the management and monitoring of processes of significant outsourcing of the actuarial function and the technical risk management function. j) Policies and procedures for the analysis and management of loans granted with insurance policy guarantees for life insurance.

The policies and procedures must include the roles and responsibilities of each involved area, as well as the form and periodicity of the reports under their charge.

Article 14.- Outsourcing
The activities related to the actuarial function and the technical risk management function may be outsourced partially or totally, according to the nature, scale, and complexity of the activities and the inherent risks of the company. Such outsourcing must be considered significant and is subject to what is established in the Regulation on Integral Risk Management.

In case of outsourcing, the company must ensure compliance with all obligations established by this Regulation. Likewise, personnel of the insurance companies must be designated who assume responsibility for the outsourced function, and who can evaluate the results of the service provider.

Article 15.- Actuarial management of SISCO
In virtue of what is stated in Article 54 of the Single Text of the Law of the Private System for the Administration of Pension Funds, the entity or operational instance, formed by the insurance companies themselves or others, that is in charge of some aspects of actuarial management, is under the scope of supervision and control of the Superintendence.

Without prejudice to the foregoing, the insurance company assumes full responsibility for the results of the actuarial management carried out by the entity or operational instance, and it is the responsibility of the insurance company the activities referred to information reporting, definition of responsibilities and policies, and others associated with actuarial management. Likewise, personnel of the insurance company with general responsibility must be designated who can evaluate the results of the aspects of actuarial management carried out by the entity or operational instance.

Article 16.- Adequate information systems and/or computer tools
The company must have information systems and/or computer tools that are sufficiently prepared for actuarial and statistical procedures, and that serve as support for the performance of the activities of the operational technical areas, the actuarial function, and the technical risk management function, in accordance with the nature, volume, and complexity of such risks, as well as having appropriate information security mechanisms, in accordance with what is stated in Circular No. G-140-2009 and its modifying norm.

CHAPTER IV
INFORMATION REQUIREMENTS

Article 17.- Inclusion of technical risks in the Annual Risk Report
As part of the Annual Risk Report established by the Regulation on Integral Risk Management, the company must incorporate in the part corresponding to technical risks, at least, the following aspects:
a) Identification of technical risks. b) Evaluation of identified technical risks, including their potential or real impact on the results and solvency of the company. c) Description of deficiencies found (including deviations with respect to the tolerance level of technical risks), and the treatment and control measures adopted. d) Results of the stress test regarding the main technical risks faced by the company. The technique used for the stress test may include sensitivity analysis and/or scenario testing, proportionally to the nature, scale, and complexity of the operations and inherent risks of the company. Likewise, the respective contingency measures must be indicated.

Los Laureles Nº 214 - Lima 27 - Perú Telf. : (511)6309000 9/14

Article 18.- Document management
The company must have an organized archive of physical and electronic documents that support compliance with the provisions of this Regulation, which must be available to the Superintendence.

FINAL AND TRANSITIONAL PROVISIONS

First.- Additional technical reserves established before the entry into force of this Regulation Those companies that on the date of entry into force of this Regulation have established additional technical reserves, for a risk or insurance product, must send the methodological document for the calculation of technical reserves referred to in Article 12 of this Regulation within a period not exceeding one hundred twenty (120) calendar days, counted from the entry into force of this Regulation.

Second.- First application of a new methodology for calculating technical reserves or establishment of additional technical reserves The gain or loss resulting from the first application of a new methodology for calculating technical reserves or the establishment of additional technical reserves, based on what is stated in Articles 11 and 12 of this Regulation, must be registered in the accumulated results accounts.

Third.- Methodological document for calculating technical reserves 7

Fourth.- First submission of the actuarial report and inclusion of technical risks in the annual risk report The first submission of the actuarial report referred to in Article 7 and the inclusion of technical risks in the Annual Risk Report as indicated in Article 17, will be made with scope to December 31, 2017, and will be sent to the Superintendence within ninety (90) calendar days following the close of the year 2017.

Article Second.- Modify letter f) in Article 5 of the Regulation on Integral Risk Management, approved by SBS Resolution No. 37-2008 and its modifying norms, according to the following text:

“ f) Technical Risk:
The possibility of losses or adverse modification of the value of commitments undertaken by virtue of insurance, reinsurance, and co-insurance contracts. In the case of non-life insurance, fluctuations related to the frequency, severity, and settlement of claims are considered. For the case of life insurance, this may include the possibility of losses due to variations in the level, trend, or volatility of mortality, longevity, disability, morbidity, renewal, or surrender rates of insurance contracts, among other parameters and assumptions, as well as the expenses of executing such obligations.”

7 Provision repealed by SBS Resolution No. 1825-2019 of 03/05/2019.

Los Laureles Nº 214 - Lima 27 - Perú Telf. : (511)6309000 10/14

Article Third.- Modify the Internal Audit Regulation, approved by SBS Resolution No. 11699-2008 and its modifying norms, according to the following:

1. Eliminate numeral 5) of section II “Insurance and/or reinsurance companies” of Annex “Scheduled Activities”.
2. Modify numerals 3) and 6) of section II “Insurance and/or reinsurance companies” of Annex “Scheduled Activities”, according to the following text:

“3) Evaluation of compliance with procedures carried out by the person(s) in charge of the actuarial function and the technical risk management function.
(…)
6) Evaluation of compliance with procedures carried out to guarantee the quality of data used in pricing, in the calculation of technical reserves, and of the solvency margin.”

Article Fourth.- Modify the External Audit Regulation, approved by SBS Resolution No. 17026-2010 and its modifying norms, according to the following:

1. Modify numeral 4) and incorporate numeral 8) in section II “Reports applicable to insurance and reinsurance companies” of Annex I “Supplementary Reports to be prepared by External Audit Firms”, according to the following:

“4) Quantification of the bases for the calculation of the solvency margin and the guarantee fund, in accordance with current norms.
(…)
8) The actuarial review of the technical reserves established by insurance companies, including the review on the quality of data and the evaluation of the methodologies and models used, as well as the assumptions and parameters used for the calculation of technical reserves. The external audit firm must employ an actuary for this review, and must register their signature in the document that forms part of the working papers.
For this purpose, an actuary is considered a person with an undergraduate or master’s degree in actuarial sciences. It is desirable that the actuary be a member of a professional association recognized by the International Actuarial Association (IAA).”

Article Fifth.- Modify the Chart of Accounts for Companies of the Insurance System, approved by SBS Resolution No. 348-95 and its modifying norms, as indicated below and available on the website of this Superintendence (www.sbs.gob.pe), in accordance with what is provided by Supreme Decree No. 001-2009-JUS.:

I. Incorporate the following accounts and sub-accounts in Chapter III “Accounting Table and Catalog of Accounts”:

“2607 Additional Technical Reserves for Claims
2607.00 (Risk)

Los Laureles Nº 214 - Lima 27 - Perú Telf. : (511)6309000 11/14

2707 Additional Technical Reserves for Premiums
2707.00 (Risk)”

II. Modify Chapter IV “Description and Dynamics”, in conformity with the following:

1. In item 26 “Technical Reserves for Claims”, the account, description, and dynamics indicated below are incorporated:

“ACCOUNT : 2607 ADDITIONAL TECHNICAL RESERVES FOR CLAIMS DESCRIPTION : Comprises the amount of technical reserves for claims that are established as a complement to those established by the Superintendence, and that the company considers necessary for the fulfillment of obligations derived from the underwriting of policies. DYNAMICS DEBITS : - Due to a lower estimation compared to the previous period's calculation. CREDITS : - Due to a higher estimation compared to the previous period's calculation.”

2. In item 27 “Technical Reserves for Premiums”, the account, description, and dynamics indicated below are incorporated:

“ACCOUNT : 2707 ADDITIONAL TECHNICAL RESERVES FOR PREMIUMS DESCRIPTION : Comprises the amount of technical reserves for premiums that are established as a complement to those established by the Superintendence, and that the company considers necessary for the fulfillment of obligations derived from the underwriting of policies. DYNAMICS DEBITS : - Due to a lower estimation compared to the previous period's calculation. CREDITS : - Due to a higher estimation compared to the previous period's calculation.”

Article Sixth.- Modify the Regulation on Claims Reserve, approved by SBS Resolution No. 4095-2013, according to the following:

1. Modify the fourth paragraph of Article 6 - Reserve for claims occurred and not reported (IBNR), according to the following text:

“For the case of pension insurance, its establishment will be carried out in accordance with this regulation. When the insurance is managed collectively, the companies that win the bid must present - centrally - a common methodology that will establish the minimum mandatory reserves to be established among them. In case of no agreement between these latter companies, the Superintendence will establish the methodology that they must assume for the minimum mandatory reserves. Each company may establish additional technical reserves based on what is established in Article 12 of the Actuarial Management Regulation for Insurance Companies.”

2. Eliminate Articles 11, 14, 17, and Annex No. 1 of the Regulation.

Article Seventh.- Modify numeral 8 in Annex No. 1 “List of main officials” of Circular G-119-2004, referred to “Standards for the Registration of Directors, Managers, and Main Officials – REDIR”, according to the following text:

“8. Titular official of the actuarial function, in case of not having manager level.”

Article Eighth.- Eliminate Annex SV-8D “Voluntary technical reserves of the Private Pension System (SPP)” and numeral 4 of Circular No. S-625-2007, referred to “Statistical information on the technical reserves of insurance associated with the private pension system”, as well as Annex SV-9C “Voluntary technical reserves of SCTR – Summary” and numeral 4 of Circular No. S-630-2007, referred to “Statistical information on the technical reserves of the complementary work risk insurance”.

Article Ninth.- Modify Annex No. 3 “Specific infractions of the insurance system” of the Sanctions Regulation, approved by SBS Resolution No. 816-2005 and its modifying norms, according to the following:

1. In section I “Minor Infractions”, Insurance System Companies, incorporate the following infractions:

“- To use for the calculation of premiums, methodologies, hypotheses, and other formulas different from those contained in the registered technical note.

• To use for the calculation of technical reserves, models, parameters, assumptions, and other relevant aspects different from those contained in the methodological document for the calculation of technical reserves.
• Not to perform the modification of the technical reserve estimation methodology, based on the backtesting results, within the deadline determined by the Superintendence.”

2. In section II “Serious Infractions”, Insurance System Companies, eliminate the following infraction:

“- To use for the calculation of premiums or technical reserves, methodologies, hypotheses, other formulas different or distinct from those contained in the registered technical note.”

Article Tenth.- This resolution enters into force from the day following its publication in the Official Newspaper “El Peruano”, with the exception of what is established in Article Fifth, which enters into force from the information corresponding to the month of January 2017. Companies will have an adaptation period to comply with the provisions of the Regulation approved in Article First until January 1, 2017.

Register, communicate, and publish.

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JAVIER MARTÍN POGGI CAMPODÓNICO
Superintendent of Banking, Insurance, and Private Pension Fund Administrators (e)

Los Laureles Nº 214 - Lima 27 - Perú Telf. : (511)6309000 13/14

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