Lima, 27 December 2017

S.B.S. Resolution No. 5027-2017

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 of Banking, Insurance and Private Administrators of Pension Funds 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, by SBS Resolution No. 7034-2012 and amending norms, the Regulation for the Classification and Valuation of Investments of Insurance Companies was approved, a norm issued within the framework of the process of harmonization of the accounting norms issued by the Superintendency with the International Financial Reporting Standards (IFRS), with respect to the investments of insurance companies;

That, the Superintendency has considered it convenient to establish clarifications to the aforementioned Regulation, regarding the custody of local and foreign investment instruments, the intermediation services of investment instruments, as well as to incorporate provisions on delegated mandates;

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, in accordance with 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 and 9 of article 349 of the General Law;

RESOLVES:

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

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1. Amend articles 19, 20, 21 and 22 and incorporate articles 19A, 19B, 19C, 21A, 21B, 22A and 22B, in accordance with the following text:

"Article 19.- Custody of local investment instruments

The custody of investment instruments represented by book entries (dematerialized) may be carried out by the companies or the services of a local custody institution may be contracted. With respect to the custody of investment instruments represented by physical titles (non-dematerialized), the companies must contract a financial system institution for their physical safekeeping. The different options must comply with the requirements detailed in articles 19A, 19B or 19C, as applicable.

In each of the aforementioned cases, there must be insurance protection or a risk transfer scheme that covers the company against the risks of dishonesty, forgery or adulteration, assault and robbery, as well as other critical risks identified by its Risk Unit, arising from the selected custody scheme. The provider of this protection must be an entity different from the company and have a financial strength rating of "B" or lower risk or, alternatively, its long-term debt must have a risk rating of "BBB-" or lower risk. The levels of protection or risk transfer must have the approval of the company's Risk Committee.

Regardless of the requirements indicated in the following articles, the Risk Unit must evaluate compliance with the insurance protection requirement or a risk transfer scheme at the beginning of the contract(s) and, subsequently, at least once a year. The evaluations must be brought to the attention of the Risk Committee for the timely adoption of corrective measures, if necessary. Likewise, said evaluation must be documented, including copies of reports from the Risk Unit, minutes of the risk committee meetings, as well as contracts and associated supporting documents. All these documents must in turn be available to this Superintendency.

Article 19A.- Custody of investment instruments represented by book entries, by the insurance company itself

The company that decides to assume the custody of dematerialized local securities must be registered as an indirect participant by a Securities Clearing and Settlement Institution (ICLV). Likewise, for the purposes of the settlement of funds and securities of the transactions carried out, the company must contract the service of a direct participant of the same ICLV (hereinafter, the direct participant), or contract the settlement service of these operations with the ICLV. The direct participants with which the settlements of funds and securities are carried out, in case they are local financial system companies, must have a financial strength risk rating of "A" or lower risk, in accordance with the provisions of the Regulation for the classification of financial system companies and insurance companies, approved by SBS Resolution No. 18400-2010 and its amending norms. In case a direct participant is not a financial system company, the following requirements must be met:

i) The direct participant must be authorized to carry out the settlement of funds and securities of the transactions carried out by the company.

ii) The company must define and implement a methodology for evaluating the direct participant, prior to its selection, which considers at least its financial strength, its operational capacity to fulfill its obligations, its level of experience, its ability to

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provide information on the operations carried out, as well as its level of exposure and capacity to manage conflicts of interest. The Risk Unit must evaluate whether the selected direct participant meets the requirements set forth in the methodology. Likewise, it must include the identification and analysis of the risks associated with the direct participant and the services to be offered to it (including, at least, operational and credit risks), and the measures contemplated to mitigate such risks. The evaluation must be summarized in a report with an overall opinion, which summarizes and concludes whether or not the participant is eligible. The selection of the direct participant must have the approval of the company's Risk Committee.

When the company assumes custody, it must assign said task to an area within its own organizational structure, which must comply with the requirements set forth in article 21A° and those detailed below:

a) Have an adequate organization, infrastructure, as well as human and material resources.

b) Develop organization and functions manuals, as well as detailed policies and procedures manuals.

c) Implement contingency plans.

d) Have adequate security systems, considering the provisions of Circular G-140-2009 and its amending norms.

e) Have a centralized archive of supporting documentation.

f) Other requirements that the Superintendency communicates through a generally applicable norm.

Likewise, the company must inform this Superintendency that it will assume custody and declare compliance with the aforementioned requirements. In this communication, it must describe the scheme, the contracts signed, and the participants involved in the custody process, whether internal or external. The company must send this communication to the Superintendency, within a period no greater than fifteen (15) calendar days after having signed the respective contracts, with a copy of the proof of its registration as an indirect participant in the respective ICLV.

When a company does not comply with the conditions indicated for it to assume custody of its investments in dematerialized local securities itself, it must contract the services of a custody institution, following the requirements established in article 19B°, so that it performs the custody of said instruments. Likewise, the company may request authorization for a custody scheme, following the provisions of article 21°B of this Regulation.

Article 19B°.- Custody of investment instruments represented by book entries, by a local custody institution

When the company contracts a local institution for the custody of dematerialized local securities, it must inform the Superintendency of this fact within a period no greater than fifteen (15) calendar days after having signed the respective contracts, and declare compliance with the requirements established in this article. In addition, it must have at the disposal of the Superintendency a report from the Risk Unit evaluating the suitability of the contracted entity, as well as a copy of the minutes of the Risk Committee, where the approval of said contract is recorded.

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Likewise, it must have at the disposal of the Superintendency the following documents regarding the contracted entity, which must have been signed and/or formalized prior to the start of the respective services:

a) Certified copy of the authorization resolution as a custody institution, issued by the Superintendency of the Securities Market. In the case that the local custody institution is a company of the financial system, it must be authorized for such purpose.

b) Copy of the risk classification reports of the custody institution, issued in the twelve (12) months prior to the signing of the contract. When the custody institution is a company of the financial system, it must have a financial strength classification of "A" or lower risk, granted by a rating agency that is registered in the Registry of risk rating agencies under the Superintendency, in accordance with the provisions of the Regulation for the classification of companies of the financial system and insurance companies, approved by SBS Resolution No. 18400-2010 and its amending norms. In the event that the local custody institution is not a company of the financial system, the requirements set forth in article 19°A must be complied with analogously, for direct participants that are not financial entities. Likewise, the company must document its evaluation of said requirements, as provided in article 19°A of this Regulation. Likewise, in the event that the local custody institution does not have a financial strength risk classification, it must have a credit rating in the Normal category, in accordance with the Regulation for the Evaluation and Classification of the Debtor and the Provision Requirement, approved by SBS Resolution No. 11356-2008 and its amending norms.

c) Copy of the contract certifying the custody institution as a direct participant of an ICLV, if applicable.

d) Contract between the company and the local custody institution.

e) If the company decides to maintain a delegated investment management mandate with the same company that acts as local custodian, a policy for the disclosure and resolution of conflicts of interest must be established, which helps mitigate exposure to the risks involved.

f) Other relevant documentation.

The company must ensure that the local custody institution assumes the obligation to send it written confirmations and/or by any electronic means, regarding any movement produced in relation to financial investments, such as: income and outflows of securities, coupon cuts, interest collections, redemptions, prepayments, maturities or any other movement not indicated above, that implies a change in the holding of the company's securities or funds in the registry of the custody institution or in the registry of an ICLV.

Article 19C.- Custody of investment instruments represented by physical securities

For the physical safekeeping of investment instruments represented by physical securities, the services of a company of the financial system that satisfactorily meets the following requirements must be contracted:

a) Have authorization to provide physical safekeeping services.

b) Guarantee the operation of a centralized electronic archive, with daily updating of the detailed information of the physical securities representing the company's investments.

c) Possess a financial strength rating of "A" or lower risk, in accordance with the provisions of the Regulation for the classification of companies of the financial system and

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d) Be constituted as the sole entity responsible for the transportation of the corresponding physical securities.

insurance companies, approved by SBS Resolution No. 18400-2010 and its amending norms.

The company must inform the Superintendency about the contracting of this service within a period no greater than fifteen (15) calendar days from the signing of the respective contracts and declare compliance with the requirements established in this article. Likewise, it must have at the disposal of the Superintendency a report from the Risk Unit evaluating the suitability of the contracted entity (including, at least, operational and credit risks, an evaluation of Risk Management and the treatment of potential conflicts of interest), the contracts and a copy of the minutes of the risk committee meeting in which the signing of these contracts was approved.

Article 20.- Custody of investment instruments abroad

Companies shall keep their investments that can be custodied in custody institutions and/or depository institutions abroad. To this end, companies must previously evaluate that the custody institution and/or depository institution meets the following requirements:

a) Be a global custody institution or depository institution duly registered and authorized by the corresponding regulatory body.

b) In the case of a custody institution, be a participant, directly or through a subcustodian, in the depository institutions of foreign investment instruments, except for those that by the nature of their issuance are not registered in the depository institutions.

c) The custody institution and/or depository institution must simultaneously meet the following requirements: (i) possess an experience of no less than five (5) years providing custody services in the financial and insurance systems; (ii) possess at least a risk rating of no less than "A" for its long-term debt, in accordance with the classification equivalences indicated in Annex No. 2 of the Investment Regulation for insurance companies; and, (iii) have financial statements audited by an independent auditing firm, which has international experience and operates in more than ten (10) countries that have risk ratings of at least "A" for their respective long-term debt securities.

d) Guarantee the execution of the credits and charges corresponding to the rights and obligations of the investment instruments that are subject to custody.

e) Report at least weekly the value of the investment instruments subject to custody (nominal value and units).

f) Provide the Superintendency, at the time and in the manner it determines, with all information concerning the services provided to the companies.

g) If the company decides to maintain a delegated investment management mandate with the same company that acts as custodian abroad, a policy for the disclosure and resolution of conflicts of interest must be established, which helps mitigate exposure to the risks involved.

h) Others established by the Superintendency.

In turn, there must be insurance protection or a risk transfer scheme that covers the company against the risks of dishonesty, forgery or adulteration, assault and robbery, and other critical risks identified by its Risk Unit, arising from the

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selected custody scheme. The provider of this protection must be an entity different from the company and must have a financial strength rating of "B" or lower risk or, alternatively, its long-term debt must have a risk rating of "BBB-" or lower risk. The levels of protection or risk transfer must be approved by the company's Risk Committee.

Likewise, the local securities clearing and settlement entities authorized by the Superintendency of the Securities Market may also carry out the custody of instruments abroad, it being the responsibility of the insurance company to evaluate that the custody services to be contracted with the local securities clearing and settlement entity do not contravene the regulations where the foreign investment instruments are issued or traded.

The evaluation of compliance with the requirements carried out by the company must be duly documented. Likewise, the company must have available to this Superintendency the signed contract with each custody and/or depositary institution.

The company must inform the Superintendency of the contracting of each of these services, within a period no greater than fifteen (15) calendar days after the signing of the respective contracts. Likewise, it must have available to the Superintendency the report of the Risk Unit in which the suitability of the contracted entity was evaluated, the contracts and a copy of the minutes of the risk committee meeting in which the subscription of said contracts was approved.

Article 21°.- Information on contracting and termination of contracts with custody institutions, depositary institutions and direct participants

The companies must communicate to the Superintendency the contracting of custody institutions, depositary institutions and direct participants, indicating their name or corporate name, country of incorporation, experience and compliance with the requirements set forth in articles 19A°, 19B°, 19C° or 20°, as applicable.

When a company terminates the contract with any custody institution, depositary institution or direct participant of the ICLV, it must communicate it to the Superintendency, indicating the causes that motivated said termination, within a period no greater than fifteen (15) calendar days of having terminated the contract. Likewise, in said communication it must describe the action plan approved by the company so that the custody or settlement of the operations of the investment instruments under the scope of the terminated contract is transferred to a modality that complies with the provisions of Chapter V of this Regulation. The action plan must include the estimated deadlines and the degree of progress achieved. The companies must document these situations and the measures adopted, and keep this documentation available to the Superintendency.

Article 21A°.- Obligations of the insurance company

Without prejudice to the fact that a third party is contracted for the custody of its investments, the insurance company must comply with the following obligations in relation to the custody of its investment instruments:

a) The person responsible and/or area designated for custody tasks must be independent from the area in charge of investment management.

b) Verify the clearing and settlement process of transactions carried out with investment instruments, respecting the delivery versus payment modality.

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c) Implement the operation of a centralized file, virtual and/or physical, with daily updating of the detailed information of the investment instruments and their transactions.

d) Verify the credits and charges corresponding to the rights and obligations of the investment instruments, in terms of established securities and payment dates.

e) Guarantee the conservation and integrity of the investment instruments.

f) Others that are inherent to the functions of a custody area.

The company must carry out the corresponding procedures with the custody institutions, depositary institutions, physical safekeeping institutions, among others, local and/or foreign, so that the Superintendency can verify the existence of the investment instruments directly, when it considers it pertinent.

At the time of signing the service contracts with the custody institution, the company must ensure that they do not contain clauses or measures that allow the use of the assets that back the technical obligations as collateral to back other obligations of the company, generated by financial services other than custody.

In the event of non-compliance with any of the requirements by the custody institution or depositary institution, the companies must terminate the contract, and contract or implement the custody of the investment instruments under the scope of the terminated contract. In that sense, a period no greater than thirty (30) calendar days is established for the custody of said instruments to be transferred to a modality that complies with the provisions of Chapter V of this Regulation.

The Risk Unit of the company must evaluate compliance with the functions and the suitability of the services provided by each custody institution, depositary institution or direct participant contracted, as well as, if applicable, update its evaluation about the company's capacity to comply with its responsibilities as an indirect participant of the ICLV. Likewise, the Risk Unit must monitor the material events related to each custodian or direct participant. This monitoring must be carried out according to the requirements established in this Regulation and the guidelines and procedure defined by the company. The Risk Unit must present a report with the results of these evaluations, including the support of its observations and recommendations to the Risk Committee of the company, with a frequency of at least annually. The supporting documentation of the monitoring and the aforementioned reports must be available to this Superintendency.

Article 21B°.- Authorization of custody with a scheme different from those provided

Companies must request authorization from this Superintendencia for the custody of their investment instruments to be carried out under a scheme (or management model) different from those contemplated in Articles 19A°, 19B° and 20° of this Regulation. To this end, they must submit the following documents and comply with the criteria and requirements described below:

a) The respective authorization request, signed by the general manager.

b) A legal report regarding the review of the contract models, as applicable, associated with the custody scheme subject to the authorization.

c) A report from the Risk Unit, in which the parties involved, the processes and procedures to be followed, as well as the tools to be used in the proposed custody scheme, are described in detail. It is also required that said report analyze and substantiate the

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alternative mechanism for complying with the applicable criteria and requirements established in this chapter, and that the associated risks (including, at least, operational and credit risks) as well as the existing mitigants for such risks be identified and assessed.

d) A copy of the minutes of the Risk Committee in which a record is made of the comprehensive assessment of the proposed custody scheme, including the associated risks, and in which its approval is reported.

e) Other information that the Superintendencia determines in its authorization process.

CAPÍTULO VI INTERMEDIACIÓN Y MODALIDADES DE NEGOCIACIÓN

Article 22°.- Intermediation of investment instruments

Prior to contracting investment instrument intermediation services, companies must assess that the intermediary is duly authorized, regulated and supervised by the competent authorities of the relevant markets and that it complies with the requirements set forth in Article 22A° of this Regulation. Likewise, companies must document this assessment, following the requirements set forth in Article 22B° of this Regulation. These requirements are also applicable when the intermediary is an entity of the financial system.

The company must notify the Superintendency of the contracting of services by an intermediary entity, indicating its name or corporate name and the result of the assessment carried out, within a period of no more than fifteen (15) calendar days following the signing of the respective contracts.

Article 22A°.- General requirements applicable to intermediaries

The company must have documented internal policies and procedures for the assessment (at the stage prior to selection) and monitoring of the intermediaries of its investment instruments. Such policies and procedures must take into account the best practices that a professional manager must employ in such assessment and monitoring, as well as the following aspects:

a) The adequate financial strength of the intermediary, considering the methodologies used by the company for the analysis of the credit risk of its counterparties.

b) The existence of criteria for managing conflicts of interest and resolving disputes.

c) The existence of fiduciary obligations on the part of the intermediation agent such that the negotiating conditions in favor of its clients are prioritized over its own interests.

d) The experience level of the intermediary, considering, where applicable, the following:

i. Completing transactions (execution and settlement).

ii. Experience level of professionals in intermediation and analysts.

iii. Length of experience in the markets of the instruments or investment operations.

e) The intermediary's infrastructure, considering:

i. Physical infrastructure.

ii. Sistemas de comunicación.

iii. Sistemas de grabaciones.

iv. Systems for entry, recording and execution of transactions.

v. Reports on the execution of transactions with the corresponding details.

vi. Processes established for the clearing and settlement of securities.

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vii. Ability to handle unexpected trading volumes.

f) The intermediary's ability to provide information and services such as access to reports on analysis and research of issuers, markets, financial products, among others.

Article 22B°.- Intermediary evaluation documents

The company must document the evaluation (prior to carrying out operations) and monitoring of intermediaries, and keep it available to this Superintendency, considering at least the following:

1. Regarding the evaluation prior to carrying out operations:

1.1. Due diligence questionnaire carried out on the intermediary.

1.2. Eligibility analysis report of the intermediary, by the Risk Unit, which must include:

    a. The evaluation carried out by the company of each of the aspects indicated in article 22A° of this Regulation, as well as the criteria and procedures defined by the company.

    b. The evaluation of possible conflicts of interest identified by the company, which may arise in the event it carries out operations with a related entity, as well as the measures to be implemented to mitigate such conflicts of interest and the documents that support such evaluation.

    c. The support for the evaluation of each of the aspects contemplated by the methodology used by the company, which must include the aspects indicated in article 22A°. Likewise, said support must be linked to the risks identified by the company, the possible impact of these on the operations carried out and the measures it contemplates implementing before such contingencies.

    d. A global opinion of the evaluated aspects, which summarizes and generates the result of the analysis performed, according to the methodology used by the company.

    e. Description of the operations that will be carried out mostly with the evaluated intermediary.

1.3. Copy of the authorization document to provide securities intermediation services on own account or on behalf of third parties, issued by the securities or financial markets regulatory authority, as applicable.

1.4. Copy of the intermediation contract entered into between the company and the intermediary.

2. Regarding follow-up and monitoring: Follow-up and monitoring report of the intermediary by the company's Risk Unit, at least annually, according to the internal procedure defined by the company, which must include the follow-up and evaluation of material facts related to the intermediary during the monitoring stage".

2. Amend the name of "Chapter VIII Final and Complementary Provisions" to "Complementary and Final Provisions".

3. Incorporate Chapter VIII "Investment Mandates", in accordance with the following text:

"CHAPTER VIII INVESTMENT MANDATES

Article 34.- Investment mandates

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The company may engage a third party to develop, partially or totally, the functions of the Investment Unit indicated in the Investment Regulations for Insurance Companies, provided that it complies with the requirements indicated in this chapter. The engagement of the mandatary shall be considered a significant outsourcing, and therefore the company must comply with the requirements established in the Regulations for Comprehensive Risk Management and in the Operational Risk Management Regulations.

Article 35.- Mandatary selection policy

Companies that decide to engage a mandatary to perform the functions of the Investment Unit, regardless of whether such engagement requires prior authorization or not, must have a mandatary selection policy that must include the following aspects:

1. Due diligence report containing, at a minimum, the following:

a. General information of the mandatary (volume of assets under management, governing bodies, among other aspects).

b. Financial situation of the mandatary, and it must demonstrate economic solvency and recognized prestige in the financial markets.

c. Asset valuation policy and procedures, which must comply with the provisions of these Regulations.

d. Policy for identifying and resolving potential conflicts of interest.

e. Evaluation and opinion on the mandatary's internal investment policies, which must comply with the investment and risk management criteria and requirements defined by the company and current regulations.

f. Evaluation and opinion of the structure of expenses, costs and commissions that the mandatary will charge to the company.

g. Capacity and infrastructure of the mandatary to comply with the regulations and investment policies of insurance companies. The infrastructure must include the evaluation of computer systems.

h. Evaluation of the requirements regarding custody of instruments, established in Chapter V of these Regulations.

i. Evaluation of minimum information on management, record and reporting to the supervisor.

2. Mandatary selection criteria, which must contemplate, at a minimum, those indicated in article 38.

3. Criteria that investment mandate contracts must contain, which must seek to safeguard the interests of the managed investment portfolios and include, at a minimum, the aspects indicated in article 39.

Article 36.- Authorization to enter into investment mandates for the management of investments representing 20% or more of the company's portfolio

The company requires prior authorization from the Superintendency if, through the investment mandate, the functions of the Investment Unit are partially or totally outsourced for the management of investments representing 20% or more of its portfolio. For such purpose, the company must submit an application signed by the general manager with the documentation indicated below:

1. Report of the Investment Unit describing and supporting in detail the reasons why it has decided to outsource the management of investments in the instruments or investment operations subject to the application.

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2. Copy of the minutes of the Investment Committee, in which the investment mandate is approved. Such approval must be based on the report of the Investment Unit described in item 1.

3. Report of the Investment Risk Unit that must include the evaluation of: i) compliance with the selection criteria and minimum requirements of the mandataries; ii) compliance with the criteria that the investment mandate contract must contain and aspects indicated in article 39; iii) evaluation of the risks associated with the outsourcing of services and the mitigation measures implemented for such purpose; and, iv) the valuation process of the instruments subject to the investment mandate.

4. Copy of the minutes of the Risk Committee, recording the approval of the investment mandate. Such approval must be supported by the report of the Investment Risk Unit described in item 3.

5. Copy of the minutes of the board of directors in which the investment mandate is approved.

6. Due diligence report of the potential mandatary.

7. Legal opinion on the clauses provided in the contract.

8. Draft investment mandate contract.

9. Designation of the person responsible in the company for supervising compliance with the contract and the Investment Policy.

10. Others established by the Superintendence.

In the case of subcontracting that does not require prior authorization, companies must keep the documentation indicated in paragraphs 1 to 7 available to the Superintendence.

Article 37°.- Communication to the Superintendence

Regardless of whether authorization is required or not, the company must inform the Superintendence about the hiring of the agent, within five (5) calendar days following the signing of the corresponding contracts.

Article 38°.- Minimum requirements for agents

The company must ensure that the agent meets at least the following requirements:

a) Be a legal entity incorporated in a country that maintains a risk classification equal to or higher than investment grade for its long-term sovereign debt in foreign currency.

b) Be duly supervised and regulated by the corresponding securities and/or financial market authorities of the country where it is incorporated. For this purpose, the company must verify, among others, the corresponding registration record.

c) Show a direct relationship, in terms of management and equity, with the parent company or the group to which it belongs.

d) Have no less than five (5) years of experience in the administration of resources of institutional investors and prove that those responsible for the management team have at least five (5) years of experience in the management of investment mandates, specifically in the administration of portfolios that back obligations with characteristics similar in nature to the company's technical obligations, with strategies and in comparable markets.

e) The entity and the persons responsible for executing any of the terms and conditions of the investment mandate must not have been specifically sanctioned for serious and/or very serious infractions in the administration of investment portfolios (asset management), by any securities and/or financial market authority of the country or abroad. Likewise, they must not have received a final conviction and/or have been

found responsible by competent authorities for actions or omissions committed with intent or gross negligence regarding compliance with their fiduciary duty or for fraud.

f) There must be absolute separation of assets between the agent's assets and the investment mandate.

g) Have the technological infrastructure for the processing, valuation and monitoring of the risks associated with the investments subject to the investment mandate.

h) In the case that the agent is a legal entity domiciled abroad, it or its parent company must prove that the assets managed in investment portfolio management mandates are no less than five billion United States dollars (US$ 5 000 000 000). In the event that compliance with this requirement is based on the proof provided by its parent company or the group to which the agent belongs, the entity must show a direct relationship in terms of management and equity with said parent company or group.

The selection of the agent must be the result of an evaluation of different market proposals, based on the objectives and criteria established in the company's policy and compliance with the requirements indicated in this article.

Article 39°.- Investment mandate contract

Investment mandate contracts must include, in addition to the requirements indicated in the Regulation for Comprehensive Risk Management and the Regulation for Operational Risk Management regarding subcontracting, the following aspects:

1. The obligation maintained by the agent to know and comply with the current regulation on investments of insurance companies and with the policies and procedures defined by the company.

2. The prohibition of the agent from subcontracting any obligation provided in the contract signed with the company.

3. The mechanisms for identification, mitigation and resolution of potential conflicts of interest that may arise during the term of the investment mandate framework.

4. The obligation of the agent to maintain confidentiality regarding the information and/or documentation sent by the company for the fulfillment of the objective of the investment mandate.

5. The obligation of the agent to present the manuals and procedures that allow identifying, monitoring, controlling and mitigating investment risks, including contingency plans and processes that guarantee continuity in the management of investments in accordance with the agreed terms.

6. The company and the agent must define the information they will receive and deliver, indicating the form, detail and time of the investments made in order to determine the level of compliance with the mandate.

7. The term of the mandate may be for a fixed or indefinite period. The contract must contemplate the causes and procedures by which the company is allowed, without incurring a penalty for the managed portfolios, to terminate the contractual relationship early and take control of the management of the assets under the agent's administration. Likewise, the contract must establish the effective date of the mandate.

8. The structure, composition and functions of the agent's governing bodies; as well as the obligation to inform about changes and appointments of its officers, including those who perform investment management activities (key person).

9. The setting of a benchmark against which the agent's management will be measured, which must be included in the Investment Policy of the insurance

company. This benchmark must be determined according to the objective of the investment mandate.

10. The exhaustive list of expenses, costs and commissions for administration and services attributed to the investment mandate.

11. The selection and contracting of the custodian of the instruments and investment operations subject to the mandate is the responsibility of the company, and the mandatary must timely provide the information that the custodian considers necessary for the performance of its functions. In this regard, the type of information that the custodian will require and the channels through which the mandatary will send such information must be specified.

12. The obligation of the mandatary to indemnify the company for willful non-compliance or gross negligence of the contractual provisions or breach of fiduciary duty.

13. The obligation that the valuation of investment portfolios be carried out in accordance with accounting standards and international best practices, and must comply with the provisions of this Regulation.

14. The country and competent court to which any divergence regarding the scope or application of the mandate shall be submitted.

15. Others that the Superintendency determines by general rule.

Any modification to the terms and conditions of the investment mandate contract must have the approval of the company's Board of Directors, and its addendum must be accompanied by a report from the Risk Unit on the potential impact of the modifications on the company's investment management.

Article 40.- Investment Unit at the corporate level

The functions of the company's Investment Unit may be performed by another entity of the economic group to which the insurance company belongs, provided that the aforementioned entity and the contract meet the requirements indicated in Articles 38 and 39, respectively.

The company requires prior authorization from the Superintendency if, through the contract or agreement with another entity of its economic group, the functions of the Investment Unit regarding the management of investments representing 50% or more of its portfolio are subcontracted, partially or totally. In this regard, the company must follow the procedure indicated in Article 36.

The Investment Unit at the corporate level must comply with the policy for disclosure and resolution of conflicts of interest established in subsection c) of Article 4 of SBS Resolution No. 1041-2016. Likewise, the persons responsible for the aforementioned Investment Unit must not present conflicts of interest generated from the simultaneous performance of functions linked to financial or investment decision-making in entities that: (i) are issuers of instruments in which the company's resources have been invested, (ii) are intermediaries of the instruments or operations or (iii) are structurers of instruments or operations offered to the company; (iv) others detected by the company or this Superintendency.

Article 41.- Evaluation of the investment mandate by Internal Audit

If the company has entered into an investment mandate contract, its Internal Audit Unit must evaluate compliance with the mandate and the mandatary's management, by mutual agreement with the mandatary and at least annually. The audit reports must be brought to the attention of the company's Audit, Investment and Risk Committees, and be available to this Superintendency, with the requirements and conditions established in the Internal Audit Regulation being applicable.

Los Laureles No. 214 - Lima 27 - Peru Tel.: (511)6309000 Fax: (511) 6309239 14/14

4. Incorporate the eleventh final and complementary provision in accordance with the following text:

"Eleventh.- Adaptation to the provisions of Chapter VIII 'Investment Mandates' Companies that have entered into investment mandates or that maintain a Corporate Investment Unit prior to the publication of SBS Resolution No. -2017, must notify the Superintendency within ten (10) calendar days following the publication of the aforementioned Resolution. Likewise, within sixty (60) calendar days following the notification, the companies must submit a Report evaluating compliance with the provisions of Articles 34, 35, 38 and 39 of the Regulation. If during the adaptation period to SBS Resolution No. -2017 any company is interested in entering into an investment mandate or implements a Corporate Investment Unit, the provisions of Chapter VIII of the Regulation shall apply."

Article Second.- Replace numeral 15) of section II of the Annex of the Internal Audit Regulation approved by SBS Resolution No. 11699-2008 and its amending norms, in accordance with the following:

"15) Evaluation of the custody and intermediation of the company's investments and, if applicable, of the implementation and exercise of investment mandates, in accordance with the provisions of the Regulation for the Classification and Valuation of Investments of Insurance Companies."

Article Third.- Incorporate procedures No. 173 "Authorization for the significant subcontracting of the functions of the Investment Unit or implementing an Investment Unit at the corporate level" and No. 174 "Authorization for custody of investment instruments with a scheme different from those provided" in the Single Text of Administrative Procedures – TUPA of the Superintendency of Banking, Insurance and AFP approved by SBS Resolution No. 3082-2011, in accordance with the text attached to this Resolution and published in accordance with the provisions of Supreme Decree No. 004-2008-PCM, Regulation of Law No. 29091. (Institutional portal: www.sbs.gob.pe).

Article Fourth.- This resolution shall enter into force on the day following its publication in the Official Gazette El Peruano, taking into consideration the following:

1. Companies shall have an adaptation period to comply with the provisions of article one of this Resolution until 30 June 2018.

2. The internal audit report incorporated by article two of this Resolution must be included in the Annual Audit Plan corresponding to fiscal year 2018.

Register, communicate and publish,
SOCORRO HEYSEN ZEGARRA
Superintendent of Banking, Insurance and
Private Administrators of Pension Funds