Resolution SBS No. 604-2016: Resolution Incorporating a Final and Transitional Provision into the Regulation on the Establishment of Mathematical Reserves for Insurance Based on the Matching of Assets and Liabilities of Insurance Companies

Los Laureles Nº 214 - Lima 27 - Peru Tel. : (511)6309000 Fax: (511) 6309239 1

Lima, February 3, 2016

Resolution S.B.S.
No. 604-2016

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 Banks and Insurance, Law No. 26702 and its respective modifying laws, hereinafter General Law, establishes in its Article 306 that insurance and/or reinsurance companies must monthly establish reserves for claims, mathematical reserves, reserves for risks in course, catastrophic risk reserves, and medical insurance reserves;

That, Article 308 of the aforementioned General Law states that mathematical reserves for life insurance are established based on actuarial calculations, taking into account the total of insurance policies, and empowers this Superintendence to determine the rules regarding their calculation;

That, through Resolution SBS No. 562-2002, the Regulation on the Establishment of Mathematical Reserves for Insurance Based on the Matching of Assets and Liabilities of Insurance Companies was approved; hereinafter Regulation, where complementary provisions for the methodology of calculating mathematical reserves for annuity insurance associated with the Private Pension System are established;

That, taking into account the market situation of instruments representing long-term debt in soles, as well as the possibility of reinvestment of eligible asset flows for matching that exceed eligible liability flows for matching, particularly in the long-term bands, it is necessary to modify the Regulation described in the previous consideration in order to incorporate a transitional provision that takes into account the aforementioned;

That, for the purpose of collecting opinions from the general public, the draft resolution on the matter was pre-published on the electronic portal of the Superintendence, under the provisions of Supreme Decree No. 001-2009-JUS;

Being in accordance with the opinions expressed by the Deputy Superintendents of Insurance, Economic Studies, and Legal Advice; and,

In exercise of the powers conferred by numeral 9 of Article 349 of the General Law of the Financial System and the Insurance System and the Organic Law of the Superintendence of Banks and Insurance, Law No. 26702 and its modifying laws;

Los Laureles Nº 214 - Lima 27 - Peru Tel. : (511)6309000 Fax: (511) 6309239 2

RESOLVES:

Article First.- Incorporate the Third Final and Transitional Provision of the Regulation on the Establishment of Mathematical Reserves for Insurance Based on the Matching of Assets and Liabilities of Insurance Companies, approved by Resolution SBS No. 562-2002 and its modifying norms, according to the following terms:

"FINAL AND TRANSITIONAL PROVISIONS
Consideration of Excess Eligible Asset Flows for Matching

Third.- For the matching of adjusted fixed-rate soles and indexed soles, companies may consider eligible asset flows for matching that exceed eligible liability flows for matching, from time band 9 (years 22 to 26) in time band 10 (years 27 onwards), at a null interest rate (0%), for the purpose of determining the coverage index included in the calculation of the financial mathematical reserve.

This provision shall apply in a transitional manner, and shall be in effect until June 30, 2017.

Article Second.- This regulation shall enter into effect from the day following its publication in the Official Gazette El Peruano.

Register, communicate, and publish,

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