SBS Resolution No. 3650-2016: Amending the Regulation on Transparency of Information and Contracting of Insurance

Los Laureles Nº 214 - Lima 27 - Perú Telf.: (511)6309000 Fax: (511)6309239 Lima, June 30, 2016

S.B.S. Resolution
No. 3650-2016
THE SUPERINTENDENT OF BANKING, INSURANCE AND
PRIVATE PENSION FUND ADMINISTRATORS
WHEREAS:
That, by Supreme Decree No. 054-97-EF, the Single Ordered Text of the Law of the Private Pension Fund Administration System was approved, hereinafter the Single Ordered Text of the SPP Law; That, by Law No. 30425, it was provided, among other matters, the possibility that the affiliate to the SPP, from 65 years of age or when accessing the special early retirement regime (REJA), may request the delivery of up to 95.5% of the balance of their Individual Capitalization Account (CIC), in the installments they deem necessary; That, by SBS Resolution No. 2370-2016, the Operating Procedure for the exercise of the affiliate's options when reaching retirement age or accessing REJA was issued, whose entry into force has been dictated as of May 16 of this year; That, as a consequence of the enactment of the aforementioned law and the issuance of the respective operating procedure, a framework of greater flexibility has been introduced in the regulation in those stages associated with or close to reaching retirement age, which results in the need for this Superintendency to issue the corresponding regulations, in order to provide affiliates with new options for managing their longevity risk through private annuity insurance; That, by virtue of the foregoing, and with the purpose of presenting additional relevant information for life insurance contracting parties, it is necessary to amend the Regulation on Transparency of Information and Contracting of Insurance approved by SBS Resolution No. 3199-2013; in order to consider specific provisions referring to the contracting of this class of insurance products; Having the approval of the Deputy Superintendencies of Market Conduct and Financial Inclusion, Insurance, and Legal Advisory; and, In use of the powers conferred by numeral 9 of article 349 of the General Law of the Financial System and the Insurance System and Organic of the Superintendency of Banking and Insurance, Law No. 26702 and its amendments, the publication of this resolution is ordered based on the exception conditions provided in numeral 3.2 of article 14 of Supreme Decree No. 001-2009-JUS:

Los Laureles Nº 214 - Lima 27 - Perú Telf.: (511)6309000 Fax: (511)6309239 RESOLVES:
Article 1.- Amend the Regulation on Transparency of Information and Contracting of Insurance, in accordance with the following text:

• Amend numeral n. and incorporate numeral o. to article 6 of the Regulation on Transparency of Information and Contracting of Insurance in accordance with the following text:
  “ n. The channels and procedure to request the amount for premium refund based on the unexpired term, in those life insurance policies that allow the contracting party to terminate the contract unilaterally and without expression of cause. o. Other information at the discretion of the company.
• Amend article 13 of the Regulation on Transparency of Information and Contracting of Insurance in accordance with the following text:
  “Article 13.- The insurance application and its minimum content The application must allow for each type of policy the adequate declaration of the risk, with the purpose of avoiding the failure to present relevant information or inaccurate declarations by the user, without prejudice to the additional information or inspections, as applicable, that the company may require for the evaluation of the risk. The aforementioned application shall be provided by the companies, and must contain information that allows the identification of the contracting party, insured and beneficiaries, as applicable. The application must indicate that the company will communicate to the contracting party, within fifteen (15) days of the application being submitted, whether it has been rejected, unless additional information has been requested within said term. The acceptance of the insurance application implies the conformity of the declarations made therein by the contracting party or insured under the terms stipulated by the companies, as long as the contracting party or insured has provided truthful information. If the company has not rejected the insurance application, said application, as well as the additional information provided by the contracting party or the result of the inspections for the adequate evaluation of the risk, shall form an integral part of the insurance policy. In the case of contracts marketed remotely, companies must provide security mechanisms that allow verifying that for the issuance of policies there was, previously, an insurance application. In the case of life insurance under the private annuity modality, the insurance application must contain a section in which - in a highlighted manner - information is provided on the characteristics associated with the contracting of the offered modality, considering the information referred to in numeral 8 of literal b of article 16.”
• Incorporate article 15-A to the Regulation on Transparency of Information and Contracting of Insurance in accordance with the following text:
  “Article 15-A.- Content of the Life Insurance Policy in the private annuity modality In the case of life insurance under the private annuity modality, in addition to the provisions indicated in the preceding article, the following must be considered:

Los Laureles Nº 214 - Lima 27 - Perú Telf.: (511)6309000 Fax: (511)6309239 a) In the case of life insurance in the private annuity modality that have the faculty to terminate the contract unilaterally and without expression of cause (revocable), the policy must state the referential amount for premium refund based on the unexpired term, as well as the timing of its return, that is, for the term in which, if applicable, the company does not provide coverage through the payment of annuities. b) In the case of life insurance in the private annuity modality that do not have the faculty to terminate the contract unilaterally and without expression of cause (irrevocable), said condition must be stated in the policy, in highlighted characters.”

• Incorporate numeral 8 to literal b of article 16 of the Regulation on Transparency of Information and Contracting of Insurance in accordance with the following text:
  “8. In the case of private annuity insurance, it must be expressly indicated, in highlighted characters, whether or not there is the faculty to terminate the contract unilaterally and without expression of cause, in accordance with the offered modality.”
• Amend article 20 of the Regulation on Transparency of Information and Contracting of Insurance in accordance with the following text:
  “Article 20.- Termination without expression of cause
  20.1 In insurance contracts, with the exception of life, health and surety insurance, it may be agreed that either party has the right to terminate the contract without expression of cause. If the company or the contracting party exercises the faculty to terminate the contract, they must previously communicate it to the other party, with a notice of no less than thirty (30) days.
  20.2 The company must inform regarding the channels and procedures applicable to request the premium refund based on the elapsed term, without penalties or charges of a similar nature or effect being applicable for early termination of the contract.
  20.3 In the case of life insurance, with the exception of life insurance in the irrevocable private annuity modality, health and surety, termination without expression of cause can only be invoked by the contracting party and with the authorization of the insured in the case of surety insurance.
  Article 2.- This resolution enters into force the day following its publication in the Official Gazette El Peruano.
  Register, communicate and publish.
  JAVIER MARTÍN POGGI CAMPODÓNICO
  Superintendent of Banking, Insurance and
  Private Pension Fund Administrators (e)