Lima, 20 December 2021

S.B.S. Resolution No. 3872-2021

The Superintendent of Banking, Insurance and
Private Administrators of Pension Funds

WHEREAS:

That, in accordance with the provisions of articles 345 and 347 of the General Law of the Financial System and the Insurance System and Organic Law of the Superintendency of Banking and Insurance, Law No. 26702 and its amending norms, hereinafter the General Law, it corresponds to the Superintendency to protect and defend the interests of the public in the field of the financial and insurance systems, safeguarding the economic and financial soundness of the natural and legal persons that make up said systems;

That, the Regulation for the Classification and Valuation of Investments of Insurance Companies, approved by SBS Resolution No. 7034-2012 and its amending norms, hereinafter the Regulation, establishes, among other aspects, provisions referring to the initial and subsequent recognition of investments in real estate and real estate loans;

That, the Regulation states that insurance companies may apply the fair value model as a subsequent measurement model for their investments in real estate, provided they have the authorization of the Superintendency;

That, under the fair value model, the aforementioned Regulation provides that real estate that generates rents or periodic flows must be valued using the discounted cash flow methodology, while real estate that does not generate rents or periodic flows must be valued by appraisal;

That, the Superintendency has considered it convenient to modify the aforementioned Regulation to make clarifications on the requirements and guidelines of the fair value model of investments in real estate, including their accounting treatment, in order to contemplate a greater level of prudence and independence and lower volatility in the determination of fair value, also taking into account some guidelines indicated by International Accounting Standard No. 40 “Investment Property”;

That, likewise, the Superintendency has considered it convenient to update certain guidelines in relation to real estate loans, based on the current regulation regarding investments of insurance companies;

That, additionally, the Superintendency has considered it convenient to establish new materiality thresholds for the identification of indirect exposures via real estate investments, considering a reasonable balance between the materiality involved and the operational burden of the process of identifying said exposures, which will be considered in the computation of the investment limits of the Regulation of Investments of Insurance Companies, approved by SBS Resolution No. 1041-2016 and amending norms;

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That, in order to gather the opinions of the general public regarding the proposed amendment to the aforementioned regulations, the pre-publication of the draft resolution on the matter was ordered on the Superintendency's electronic portal, under the provisions of the Thirty-Second Final and Complementary Provision of the General Law and Supreme Decree No. 001-2009-JUS;

With the approval of the Deputy Superintendencies of Insurance, Risks, Economic Studies and Legal Advice; and,

In use of the powers conferred by numerals 7, 9 and 13 of article 349 of the General Law;

RESOLVES:

Article One.- To modify the Regulation for the Classification and Valuation of Investments of Insurance Companies, approved by SBS Resolution No. 7034-2012 and its amendments, in accordance with the following:

1. Modify the reference to the last two (2) definitions of article 2, as follows:

“Article 2.- Definitions (…)

ab) Fair value.- It is the amount for which an investment instrument can be exchanged between a willing buyer and a willing seller who are duly informed, in a condition of mutual independence.

ac) Value in use.- It is the present value of the estimated future cash flows expected to be obtained from an asset or cash-generating unit”.

2. Replace article 24 “Investments in real estate”, in accordance with the following text:

“Article 24.- Investments in real estate This type of investment corresponds to real estate held to obtain rents, capital gains or both, instead of being destined for the company's own use. Real estate for own use is considered to be that whose use is destined for the production or supply of goods or services of the company, or for its administrative purposes.”

3. Replace article 27 “Valuation of investments in real estate – Fair value model”, in accordance with the following text:

“Article 27.- Valuation of investments in real estate - Fair value model For the valuation of investments in real estate under the fair value model, companies must have the authorization of this Superintendency, in accordance with the provisions of article 28 of this Regulation. Fair value valuation applies to all investments in real estate owned by the company, regardless of whether or not they back technical obligations. In those matters not provided for by this Regulation, the guidelines of IAS 40 “Investment Property” must be applied.

a) Recording of fair value The fair value to be recorded for each real estate depends on the use associated with said asset:

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1. For the properties that generate income or periodic flows in favor of the company with contracts in force at the time of the valuation, the fair value corresponds to the commercial valuation value, which must be determined considering the results obtained through the application of at least two approaches: the income approach, using the discounted cash flow methodology, and the market approach, based on comparable values. In applying the income approach, the conditions of the contracts in force must be taken as the basis for the projections, and the guidelines established in Annex II of this Regulation must be complied with.

In the case of properties transferred under a lease, usufruct or surface right contract, with a purchase option in favor of the lessee, the fair value must be obtained in accordance with the provisions of the preceding paragraph and, if applicable, said value must be adjusted so that it does not exceed the present value of the future flows of the respective contract, up to the period of activation of the purchase option, plus the present value of the exercise price of said option; both discounted at the same discount rate used in the valuation of the property.

2. In the case of properties that do not generate income or periodic flows at the valuation date (they do not have a contract in force), the fair value corresponds to the commercial valuation value, which must be determined considering the results obtained through the application of at least two approaches: the cost approach (replacement value) and the market approach (based on comparable values). Of this group of properties, only and exceptionally for those properties whose contracts for the generation of income or periodic flows ceased to be in force within the last twelve (12) months prior to the valuation date, the income approach may be applied as an additional approach to the cost and market approaches. The income approach is applied based on projections based on information from recent contracts or on available market information (average rents of similar properties, considering the type of property and factors such as size, location, age and state of conservation), duly supported and following the guidelines of Annex II of this Regulation.

The valuations must be carried out by appraisers or valuation entities that comply with the requirements set forth in article 28-A° of this Regulation, as well as with the policies and procedures described in article 28° of this Regulation.

The valuation or appraisal reports prepared by the appraisers or valuation entities must include the support for the criteria applied by them for the determination of the fair value (final value), based on the consideration and representativeness of the results obtained under each valuation approach applied. Likewise, based on what is declared by the company for the contracting of the valuation or appraisal services, it must be stated in the introduction of each report whether the valuation is related to an income-generating property or not and, if applicable, whether the exception determined in numeral 2 of this literal has been applied.

b) Updating of fair value

The company must update semi-annually the fair value of the properties that generate income or periodic flows with contracts in force at the valuation date. In the case of properties that do not generate such income at the valuation date, the update must be carried out, at a minimum, on an annual basis. The update must be carried out by a

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appraiser or valuation entity under the terms set forth in the preceding literal of this article.

Without prejudice to the provisions of the preceding paragraph, if as part of the company's monitoring of the fair value of its investments in properties it is estimated that the value of a property has fallen by twenty percent (20%) or more with respect to the last recorded value, or upon the activation of an alert signal described in the company's policies, the company must request the update of the valuation or appraisal of said investment as soon as possible.

c) Recognition of fluctuations in fair value

The loss or gain arising from the fluctuation of the fair value of an investment in properties is recognized in the results of the year.”

4. Replace article 28° “Authorization for the application of the fair value model”, in accordance with the following text:

“Article 28°.- Authorization for the application of the fair value model

For the purposes of applying the fair value model as a subsequent measurement model for its investments in properties, the company must submit an authorization request signed by its General Manager and a copy of the following documents:

1. Policies and procedures for the valuation of investments in properties at fair value, which include the guidelines to comply with the requirements established in this chapter, as well as to monitor the valuation at fair value. The policies and procedures must consider at least the following aspects:

a. The procedures and sources of information for the valuation of the properties, as well as for the identification and monitoring of alert signals indicated in the following literal.

b. The indicators for the identification and monitoring of alert signals of real estate market values (independent of the valuations or appraisals carried out), applicable to its own investments.

c. The guidelines and procedures to follow for the updating of the valuations or appraisals.

d. The reference to the company's policies and procedures for the selection and monitoring of counterparties in investments in real estate that generate income or periodic flows.

e. The criteria, conditions and procedures to be followed in the event of delays (actual or expected) in payments by counterparties of the type of investments indicated in the preceding letter; as well as to evaluate and approve modifications to the respective contracts.

f. The description of the accounting dynamics applicable to investments in real estate.

2. Policies and procedures for the selection of appraisers or valuation entities for investments in real estate, which must comply with the requirements set forth in article 28-A° of this Regulation. These must include guidelines for the periodic rotation of appraisers or valuation entities, considering that the same property cannot be valued or appraised by the same appraisers or valuation entities for more than five (5) consecutive years. Once the aforementioned maximum period has ended, a period of at least two (2) years must elapse before these appraisers or valuation entities can again value said property.

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3. Policies and procedures for the timely delivery of information and documentation required by the appraisers or valuation entities to carry out the valuation of their properties. In the case of investments in real estate where the income approach is applied as one of the approaches used to determine their fair value, the company must provide the appraiser or valuation entity with the information and documents that allow it to confirm and use, in its valuation, objective data for the development of projections, establishing confidentiality agreements, as applicable.

4. Description of the minimum methodological guidelines that the appraisers or valuation entities must apply for the valuation of investments in real estate, considering the provisions of Annex II of this Regulation, as applicable.

5. Models of contracts to be entered into with the appraisers or valuation entities, which include clauses that facilitate the delivery of information describing and supporting the methodologies used, the valuations performed, as well as compliance with the requirements set forth in article 28-A° of this Regulation, to the company, its External Audit Firm and the Superintendency or the person designated by the latter.

6. Model of sworn statement to be signed by the appraiser or valuation entity, regarding the management of conflicts of interest.

7. Legal report of the company on the model contracts to be entered into with the appraisers or valuation entities referred to in numeral 5 and the model sworn statement referred to in numeral 6.

8. Report of the risk unit, evaluating the reasonableness of the policies, procedures and methodological guidelines indicated in numerals 1, 2, 3 and 4 of this article.

9. Detailed description of the training, experience and position in the company of the professionals who have under their responsibility the monitoring of the real estate market for the identification of warning signs. The experience applied in the analysis and monitoring of the real estate market of the professional who leads this function must not be less than two (2) years. The function of monitoring the real estate market must be performed by a unit independent of the company's investment unit. The risk unit may assume this function under the terms indicated.

10. Training plan, with a horizon of no less than two (2) years, which the company must follow to keep updated the training of the professionals referred to in the preceding numeral, in matters related to the variables or factors that determine supply, demand and real estate market values.

11. Minutes of the meetings of the risk committee, in which it is recorded: i) the approval of the manuals that incorporate the policies and procedures indicated in numerals 1, 2 and 3, as well as the minimum methodological guidelines referred to in numeral 4 of this article; and, ii) the bringing to knowledge of the legal report and the risk unit report indicated above.

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The authorization of the fair value model for investments in real estate may include the application of prudential measures, which are evaluated for each particular case.

The Superintendency approves or denies the authorization within a maximum period of thirty (30) business days

The documentation that has served as support for compliance with the requirements described above must be available to this Superintendency.

In the event that any of the documents that have served as support for compliance with the requirements cited above is updated or modified, such changes must be brought to the knowledge of this Superintendency, by means of a letter from the company signed by its General Manager, within five (5) business days of having been approved, attaching the following:

1. Explanation of the changes made and the reasons that supported them.

2. Modified and/or updated documents, taking into consideration the following:

a. Changes in documents 1 to 6 indicated above must be accompanied by the updating of the reports referred to in numerals 7 or 8 indicated above.

b. Changes of the lead professional, described in numeral 9 above, must be accompanied by a copy of their curriculum vitae (resume), detailing their experience and training on the real estate market.

3. Minutes of the risk committee where the modifications are approved and the updating of the reports indicated in numerals 7 or 8 above or of the risk report referred to in letter 2b) above is brought to knowledge.

The Superintendency may present observations on the modifications made within sixty (60) business days of having been made known to it. If the company does not remedy these observations within the period indicated by this Superintendency, and considering the severity or criticality of the risks associated with what was observed, it may render ineffective the authorization granted to the company to apply the fair value model, and in the latter case, specify details for the company to return to the cost model in the valuation of its investments in real estate.”

5. Incorporate Article 28-A “Requirements applicable to appraisers or valuation entities - Fair value model”, in accordance with the following text:

“Article 28-A.- Requirements applicable to appraisers or valuation entities - Fair value model

The appraisers or valuation entities hired by the companies that apply the fair value model must comply, at least, with the following requirements:

1. Be natural or legal persons that possess experience of no less than two (2) years in the valuation of real estate with characteristics similar to those subject to valuation. In the case of a legal person, the professional in charge of the valuation or appraisal must have the capacity and experience indicated above. Additionally, in the case of a valuation appraiser, he or she must have a current registration in the Registry of Valuation Appraisers (REPEV) maintained by this Superintendency.

2. Demonstrate, in the case of the valuation of real estate that generates rents or periodic flows, that the professional in charge of the valuation has carried out at least ten (10) valuations using the income approach, using the discounted cash flow methodology.

Of these, at least five (5) valuations must have been carried out in the last two (2) years and on real estate of similar characteristics and scales. This requirement may be accredited by means of a sworn declaration signed by the appraiser or professional in charge of the valuation on behalf of the valuation entity, indicating the valuation reports that he or she has carried out using the income approach. The supporting documentation of said reports must be available to this Superintendency when it requests it.

3. Use valuation techniques or methods consistent with the economic methodologies accepted by market participants to establish market prices, that comply with the guidelines established in this Regulation and that are consistent with international real estate valuation standards. The use of relevant observable inputs must be maximized, as far as possible, and the use of unobservable inputs must be minimized. When the market approach is applied, effective purchase-sale values must be used. If such values are not available and referential offer values are used, a discount for negotiation factor of at least two percent (2%) must be applied, in accordance with the guidelines established in Annex II.

4. Sworn declaration signed by the appraiser or professional in charge of the valuation on behalf of the valuation entity, indicating having received specialized training in real estate valuation at least every two years in the last four (4) years. For the valuation of investments in real estate that generate rents or periodic flows, the appraiser or valuation entity must indicate having received specialized training in the valuation of this type of real estate under the income approach, developed by formally constituted institutions with experience in teaching these specialized courses. The supporting documentation of said training must be available to this Superintendency when it requests it.

5. Have databases and analysis of specialized information on the real estate sector of the respective locality, as well as information on the variables and risk indicators that affect said sector and the valuation of real estate.

6. Have formal criteria for the management of conflicts of interest and for the resolution of disputes. Likewise, they must sign the sworn declaration regarding compliance with these criteria, following the model presented by the company to the Superintendency.

7. Have controls and/or validations that reduce operational risk in the real estate valuation process, and provide greater confidence in the valuations granted.

8. Other aspects that the company considers relevant.

The company must have a report on the degree of compliance with the requirements of the appraiser or valuation entity, prior to its hiring; it being necessary for the Risk Unit of the company to issue an opinion on compliance with the requirements indicated in numerals 3 and 7 of this article. Said report must be brought to the attention of the Risk Committee.”

6. Replace Article 29 “Prudential measures”, in accordance with the following text:

“Article 29.- Prudential measures - Fair value model

If as part of its supervision duties, the Superintendency observes that the valuation or appraisal prepared to determine the fair value of a real estate investment presents significant deficiencies at a technical level, it may require the company to do the following: i) the updating of the valuation or appraisal; ii) the development of a new valuation or appraisal carried out by a different appraiser or valuation entity; and/or, iii) the consideration of prudential discounts on the fair value of the real estate. The technical evaluation of the valuations or appraisals comprises the methods or approaches used, the consistency of the information and

of the analysis used as support, the availability of data or reliable sources of information, the reasonableness of the results obtained with market indicators, among others.”

7. Incorporate Article 29-A° “Properties with different purposes or uses”, in accordance with the following text:

“Article 29-A°.- Properties with different purposes or uses

In the event that a property is intended for different purposes or uses, the company must classify its different components into classes, regardless of the participation of each component in the total property. The classes of properties and their valuation models are indicated below:

a) For own use: must be valued according to the cost model, in accordance with the provisions of the Chart of Accounts for insurance system companies.

b) Investment in properties: must be valued following the provisions of Article 26° or 27° of this Regulation, as applicable.

The common areas corresponding to each component must be classified and valued within the respective class.”

8. Incorporate Article 29-B° “Files of investments in properties”, in accordance with the following text:

“Article 29-B°.- Files of investments in properties

Companies must maintain a supporting file for each and every one of their investments in properties, whether these are valued using the cost model or the fair value model. Said file must contain, at least, the following information:

1. Description of the property: characteristics, type(s) of use(s) and conditions for the generation of flows, if applicable.

2. Registry entry. In the case of properties that have undergone any modification during the last year, the registry entry of the property must be updated. For properties that do not present modifications during the last year, the company has the option of updating said registry entry or of having a sworn statement, signed by the General Manager or by whomever he formally delegates, indicating that there were no changes in the registry information of the property during the last year. This sworn statement may be signed individually or for a group of properties, provided that the necessary information for the identification of each one of them is recorded, including the investment code(s) and the respective registry entry number(s). Without prejudice to the foregoing, the Superintendency may require the presentation of the updated registry entry, if it deems it necessary.

3. Certificate of Charges and Encumbrances of the Property Registry updated at least annually.

4. Documentation of investments in improvements associated with the property, which have been recorded as part of said asset, made after its acquisition. If applicable, information and documentation on disbursements in real estate projects associated with the property.

5. In the case of properties that generate periodic rents or flows: current contracts generating the cash flows and support for the evaluation and/or monitoring at least quarterly of the punctuality of payments made by each counterparty. Likewise, support for compliance with policies and procedures defined to respond to delays (actual or expected) in said payments. In turn, description of modifications made to the original contracts, and support for compliance with policies and procedures defined to evaluate and approve said modifications.

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6. Valuation or appraisal reports prepared by experts or valuation entities on the respective property, considering the last ten (10) years, or the number of years in possession of the company, whichever is less.

7. Reports of analysis and/or monitoring at least semi-annually of the risks to which the real estate investment is exposed, including the monitoring of alert signals of the real estate market variables, associated with the respective investment. The file must include the reports made considering the last ten (10) years, or the number of years that the property has been in possession of the company, whichever is less.

The company may document the evaluation and/or monitoring required in numerals 5 and 7 of this article, at the level of each property or for a group of properties, as well as in an internal or complementary section to its files of investments in properties, provided that the detailed data of the scope of said evaluation and/or monitoring are displayed, including the respective investment code(s).

The information update policies must take into consideration the frequency established in this article.

The files must be available to the Superintendency.”

9. Incorporate Article 29-C° “Derecognition of investments in properties”, in accordance with the following text:

“Article 29-C°.- Derecognition of investments in properties

In each operation of sale or transfer of investments in properties, companies must analyze whether the risks and benefits associated with such assets are effectively transferred. Only if there is a significant transfer of risks and benefits may the company derecognize the investments in properties.”

10. Replace Article 30° “Real estate credits”, in accordance with the following text:

“Article 30°.- Real estate credits

Companies may grant and/or invest in the following real estate credits, in accordance with the requirements established in the Regulation of Investments of Insurance Companies, approved by SBS Resolution No. 1041-2016 and amendments:

a) Negotiable Mortgage Credit Securities (TCHN).

b) Real estate credits for the acquisition of future assets initially instrumented in promissory notes and later in a TCHN.

c) Mortgage credits granted to their workers for the acquisition of a single dwelling.

d) Accounts receivable originated by reverse mortgage operations.”

11. Replace the ninth final and complementary provision, in accordance with the following text:

“Ninth.- Application of the fair value model of investments in real estate for companies that had authorization

Companies that had authorization to value their investments in real estate under the fair value model, before the entry into force of Resolution SBS No. 3872-2021, must take into consideration the following:

1. On accounting effects: They must make an adjustment to reflect the gain or loss associated with their investments in real estate (portfolio in stock), which occurs as a result of the adaptation to the modifications indicated in said Resolution. The gain or loss resulting from this adjustment must be applied against the accumulated results account. The

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aforementioned adjustment does not imply making reversals or refunds of capitalizations of previous gains recognized by the company.

2. On extra-accounting effects: They must constitute the monthly additional capital requirement in the calculation of the Guarantee Fund, equivalent to 10% of the value of investments in real estate (portfolio in stock).

3. On the Report of compliance gaps and financial impacts: They must submit to the Superintendence a Report within a maximum period of ninety (90) calendar days, counted from the entry into force of the aforementioned Resolution, detailing the following aspects:

a) Identification and evaluation of gaps in compliance with the requirements indicated in article 28°.

b) Analysis of impacts of accounting and extra-accounting effects, reflected in the coverage ratios of technical obligations and solvency.

4. On the operational adaptation plan: In case the company does not fully adjust to the new requirements established in article 28°, it must submit, in addition to the Report indicated in numeral 3, an adaptation plan corresponding to the operational implementation of the requirements indicated in the cited article, and that considers a maximum implementation period of two (2) calendar years, counted from the entry into force of the aforementioned Resolution. In said adaptation plan, those aspects that present compliance gaps must be highlighted, and the actions to be followed by the company to overcome said gaps must be described, including details on the responsible area and the expected date to implement each of these actions. The company must remedy the observations made by this Superintendence on this plan and obtain its express approval for its respective implementation.

5. On the financial adaptation plan: In case the company requires an adaptation period to implement the accounting and extra-accounting requirements associated with its portfolio in stock, contemplated in numerals 1 and 2 above, it must submit, in addition to the Report indicated in numeral 3, an adaptation plan detailing the implementation proposal, and may consider as the maximum date of the initial implementation milestone 01 January 2024. The maximum gradual adaptation period to be considered cannot exceed 31 December 2026. The company must remedy the observations made by this Superintendence on this financial adaptation plan and obtain its express approval for its respective implementation.

The company may continue using the valuation methodology it had been applying before the entry into force of the previously indicated Resolution, until the expiration of the maximum adaptation period indicated in numeral 4 above, or until the effective month of total overcoming of the gaps identified according to literal a) of numeral 3 above, whichever occurs first.

Additionally, it is specified that the gain or loss originating from the fluctuation of the fair value of investments in real estate acquired after the entry into force of Resolution SBS No. 3872-2021 (new portfolio), is subject to the provisions of literal c) of article 27° of this Regulation, without application of gradual adaptation periods for the recognition of said accounting effects. Likewise, the monthly additional capital requirement in the calculation of the Guarantee Fund, for the case of the new portfolio, must be

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calculated and constituted at the close of each month, without applying a gradual adaptation period for this. It is specified that the new portfolio under the treatment described above considers even those real estate properties acquired during the operational adaptation period referred to in numeral 4 above.”

12. Incorporate the twelfth, thirteenth and fourteenth final and complementary provisions, according to the following text:

“Twelfth.- Treatment of new authorizations to apply the fair value model in investments in real estate

Companies that receive authorization, from the entry into force of Resolution SBS No. 3872-2021, to apply the fair value model in their investments in real estate, must record the gain or loss resulting from the first application of said model in the accumulated results account. Subsequently, the provisions established in literal c) of article 27° of this Regulation apply. It is specified that in these cases a gradual adaptation period does not apply for the calculation and constitution of the Guarantee Fund established in the Regulation of Patrimonial Requirements of Insurance and Reinsurance Companies.

Thirteenth.- Adaptation of experts or valuation entities to the periodic alternation requirement

For companies that had authorization to value their investments in real estate under the fair value model, prior to the entry into force of SBS Resolution No. 3872-2021, the alternation required in numeral 2 of article 28 of this Regulation must be evaluated as of the expiration of the maximum operational adaptation period indicated in numeral 4 of the ninth preceding final and complementary provision, or as of the effective month of the total overcoming of the gaps identified according to literal a) of numeral 3 of the aforementioned provision, whichever occurs first.

Fourteenth.-Valuation of investments in real estate investment funds or other vehicles with real estate underlying

In the case of indirect real estate investments, through real estate investment funds, real estate trusts and other vehicles or structures with real estate underlying, the company must ensure that the valuation methodology applied to the real estate of the investment vehicle is consistent with the cost model or the fair value model established in IAS 40 "Investment Property" or with the valuation model or methodology provided by the respective regulatory and/or supervisory authorities of the securities and/or financial markets. Such methodology must be incorporated in the Participation Regulation or document that supports the characteristics of the investment vehicle or real estate structure, which must be available to the Superintendency.

If the real estate investment fund, the real estate trust or the vehicle or structure with real estate underlying does not comply with the valuation provisions described above, the company must record as the value of its investment the lower of the acquisition value of its participation and the value reported by the real estate fund, trust or investment vehicle. In the case of those investment funds or vehicles that have been acquired before the entry into force of SBS Resolution No. 3872-2021, and that do not comply with the valuation provisions described, they must be alerted as part of the adaptation plan indicated in the twelfth final and complementary provision, and are subject to the maximum operational implementation period of two (2) years, established in that same provision."

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Article Second.- Modify procedure No. 155 "Authorization for the application of the fair value model for the valuation of real estate investments of insurance companies" in the Single Text of Administrative Procedures–TUPA of the Superintendency of Banking, Insurance and AFP approved by SBS Resolution No. 1678-2018 and amendments, according to the text attached to this Resolution and published on the institutional portal (www.sbs.gob.pe).

Article Third.- Annex II "Guidelines to consider in the valuation of real estate under the fair value model" is part of the Regulation for the Classification and Valuation of Investments of Insurance Companies, approved by SBS Resolution No. 7034-2012 and its amending norms, and is published on the institutional Portal (www.sbs.gob.pe), in accordance with the provisions of Supreme Decree No. 001-2009-JUS.

Article Fourth.- Modify the first final and complementary provision of the Regulation for Real Estate Risk Management in Insurance Companies, approved by SBS Resolution No. 2840-2012 and its amendments, according to the following text:

"First.- Measurement of fair value

For purposes of this regulation and the preparation of Annex No. ES-24 "Measurement of Real Estate Risk", the fair value of real estate is calculated in accordance with the provisions of the Regulation for the Classification and Valuation of Investments of Insurance Companies, approved by SBS Resolution No. 7034-3012 and amending norms.

For the rest of the assets subject to real estate risk, the estimation of fair value is made in accordance with the provisions of the pertinent sections of the aforementioned Regulation and the Chart of accounts for companies of the insurance system."

Article Fifth.- Modify the Regulation of Investments of Insurance Companies, approved by SBS Resolution No. 1041-2016 and amending norms, in accordance with the following:

1. Modify the second paragraph of subsection g.6) of article 25, in accordance with the following text:

"A property that meets the following requirements is excepted from the condition indicated in this literal: i) be located in an urban area or in an urban expansion area, according to the regulations of the Ministry of Housing, Construction and Sanitation of Peru; and that is accredited as such within the Urban Development Plan duly approved by the respective Provincial Municipality, or accredited by the Zoning and Roads Certificate issued by the Metropolitan Municipality of Lima or by the respective Provincial Municipality; ii) have a certificate of use compatibility or the respective municipal permit, to develop the economic activity considered by the company to make this investment; iii) if it is located in an urban expansion area, it must have at least two (2) appraisals, at the beginning and in each update period, that comply with the requirements indicated in subsection g.5) of this article; iv) have a formal document that supports having initiated the procedure for updating the registration of the property as urban; v) present to this Superintendency a letter signed by the general manager, within five (5) business days of having made the corresponding eligibility assignment, in which it declares compliance with these requirements, and where the company undertakes to obtain the registration of the property as urban in the shortest possible time."

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2. Amend literal c) and the last paragraph of article 32°, in accordance with the following text:

“Indirect exposures obtained through investment in:	% of technical provisions backing	Materiality of the investment
(…)
c) Real estate investments: c.1) Investments in real estate on which the company enters into lease or usufruct (or similar) contracts. c.2) Indirect real estate investments (participation certificates of investment funds, instruments representing securitized assets, instruments issued by trust estates or other investment vehicles), whose underlying assets are, or are backed by, income flows from real estate that is leased or granted in usufruct (or similar).	c.1) > 0.1% of technical provisions c.2) > 0.25% of technical provisions	c.1) All exposures must be taken into account, considering the method defined in Annex 3 “Method for estimating indirect exposure in lease or usufruct contracts on real estate investments” of this Regulation. c.2) Those exposures whose counterparties hold a participation equal to or greater than 0.50% of the leasable area of the total set of real estate underlying the investment vehicle must be taken into account. The total indirect exposure to each counterparty corresponds to the book value of the investment vehicle multiplied by the respective participation of the counterparty in said leasable area.
(…)

(…)

In the case of indirect exposures arising from lease or usufruct contracts on real estate investments (literal c.1) of the preceding table), the estimation of such exposures must be carried out following the method described in Annex 3 “Method for estimating indirect exposure in lease or usufruct contracts on real estate investments” of this Regulation. In the case of exposures underlying indirect real estate investments (literal c.2) of the preceding table), the estimation of such exposures must be carried out based on the participation of each counterparty in the leasable area of the total set of real estate underlying the investment vehicle. It should be noted that in both cases indirect exposures with counterparties are considered, provided that the investments in the real estate involved or the instruments issued by the real estate investment vehicles referred to in literal c) of the preceding table exceed the indicated percentage of the company's technical provisions (0.1% or 0.25%, respectively). The result obtained from the sum of all indirect exposures with a counterparty (issuer or economic group) arising from the aforementioned contracts, as well as from contracts underlying other real estate investments, must be considered for the application of limits”

3. Amend the second paragraph and incorporate a third paragraph within the first final and transitional provision, in accordance with the following text:

“The company's real estate used for own use and direct investments in real estate projects that will be destined for own use are not considered eligible to back technical reserves, but are eligible to back equity requirements. For purposes of the Asset Sufficiency Analysis, real estate for own use may be treated exceptionally as set forth in paragraph 4.2 of article 8° of the Regulation for the Constitution of Mathematical Reserves for Annuity Insurance and the Asset Sufficiency Analysis, approved by SBS Resolution No. 887-2018.

Own-use real estate must be appraised annually by experts registered in the Registry of Appraisal Experts (REPEV) maintained by the Superintendency. The appraisal report carried out by said experts must contain the commercial value and the automatic realization value of the appraised real estate. Likewise, companies must maintain a file available to the Superintendency containing at least the following information:

1. Registry entry of the real estate. If the real estate has undergone any modification during the last year, the registry entry must be updated. If the real estate has not presented modifications during the last year, the company has the option of updating said registry entry or of having a sworn declaration, signed by the General Manager or by whomever he formally delegates, indicating such condition. This sworn declaration may be signed individually or for a group of real estate properties, provided that the information necessary for the identification of each of them is included, including the investment code(s) and the respective registry entry number(s). Without prejudice to the foregoing, the Superintendency may require the presentation of the updated registry entry, if it deems it necessary.

2. Certificate of Charges and Encumbrances of the Property Registry updated, at least, annually.

3. Documentation of investments in improvements associated with the real estate, which have been recorded as part of the assets, made after its acquisition.

4. Appraisal reports prepared by the experts on the respective real estate, considering the last ten years or the number of years that the real estate has been in the company's possession, whichever is less.”

Article Six.- Amend the first paragraph and eliminate the second paragraph of Annex 3 of the Investment Regulation of Insurance Companies, approved by SBS Resolution No. 1041-2016 and amending norms, in accordance with the following:

“ANNEX 3 Method for estimating indirect exposure in lease or usufruct contracts on real estate investments

Insurance companies must follow the method described in this Annex to estimate their exposure with a counterparty through a lease, usufruct or other contract that generates income in favor of the company, on a property owned by it or over which it holds real rights.”

Article Seven.- Amend the Regulation of Equity Requirements for Insurance and Reinsurance Companies, approved by SBS Resolution No. 1124-2006 and its amending rules, in accordance with the following:

1. Amend numeral 3.2 of article 3, in accordance with the following: “(…) 3.2 Guarantee fund Represents the additional equity backing that companies must have to face the other risks that may affect them and that are not covered by the solvency equity, such as financial risks, operational risks, and/or other risks not contemplated in the previous numeral. The monthly requirement of said fund must be equivalent to 35% of the solvency equity, plus 10% of the value of investments in real estate that are valued under the fair value model. Additionally, in the case of insurance with separable savings or investment components according to the Regulation of Mathematical Reserves, the calculation of the solvency equity does not apply to said components, and the monthly amount of the guarantee fund must be equivalent to 1% of the financial obligations originating from the investment components where the financial risk is fully assumed by the insured, and to 6.75% of the obligations originating from the savings or investment components where the company fully or partially assumes the financial risk.”

2. Amend the comments/observations associated with the Concept “C. Guarantee Fund” of Annex ES-7A, in accordance with the following: “(…) 35% of the Solvency Equity + 10% of the value of investments in real estate that are valued under the fair value model / 1% of financial obligations of insurance where the financial risk is fully assumed by the insured / 6.75% of the obligations for the separable savings or investment components according to the Regulation of Mathematical Reserves where the company fully or partially assumes the financial risk.”

Article Eight.- This resolution enters into force as of the day following its publication in the Official Gazette El Peruano.

Register, communicate and publish.

MARIA DEL SOCORRO HEYSEN ZEGARRA
SUPERINTENDENT OF BANKING, INSURANCE AND AFP