Technical Standards for the Authorization of Constitution and Start of Operations of Insurance Companies in El Salvador

CNBCR-03/2024
NRP-56
TECHNICAL STANDARDS FOR THE AUTHORIZATION OF CONSTITUTION AND START OF OPERATIONS OF INSURANCE COMPANIES IN EL SALVADOR Approval: 02/29/2024 Validity: 03/15/2024 Alameda Juan Pablo II, between 15th and 17th Norte Avenue, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv

THE NORMS COMMITTEE OF THE CENTRAL RESERVE BANK OF EL SALVADOR,

CONSIDERING:
I. That Article 4 of the Insurance Companies Law establishes that insurance companies constituted in El Salvador must be organized and operate as indefinite-term anonymous companies, with fixed capital divided into registered shares, and may adopt any name they deem convenient, which must be different from that of any other existing company. They may operate as general insurance companies, life insurance companies, or specialized exclusively in sureties.
II. That Article 5 of the Insurance Companies Law establishes that interested parties wishing to form an insurance company must request authorization from the Superintendence of the Financial System to constitute the company.
III. That Article 9 of the Insurance Companies Law establishes that, having met the requirements established in this law, having verified their internal controls and procedures, and having registered the public deed in the Commerce Registry, the Superintendence of the Financial System will certify that the insurance company in question may commence its operations.
IV. That Article 3, subsection b) of the Law on Supervision and Regulation of the Financial System establishes that it is the competence of the Superintendence of the Financial System to authorize the constitution, functioning, start of operations, suspension of operations, modification, revocation of authorization, closure, and other acts of the members of the financial system, in accordance with the legal, regulatory, or technical standards established regarding the matter.
V. That Article 7, subsection e) of the Law on Supervision and Regulation of the Financial System establishes that insurance companies, their branches abroad, and the branches of foreign insurance companies established in the country are subject to the supervision of the Superintendence of the Financial System.
VI. That Article 99, first paragraph of the Law on Supervision and Regulation of the Financial System establishes that the Central Reserve Bank of El Salvador, through its Norms Committee, is the institution responsible for the approval of the technical regulatory framework that must be issued in accordance with this Law and other laws regulating supervised entities.

THEREFORE,

by virtue of the regulatory powers conferred upon it by Article 99 of the Law on Supervision and Regulation of the Financial System,

AGREES to issue the following:

TECHNICAL STANDARDS FOR THE AUTHORIZATION OF CONSTITUTION AND START OF OPERATIONS OF INSURANCE COMPANIES IN EL SALVADOR

CHAPTER I
OBJECT, SUBJECTS, AND TERMS

Object
Art. 1.- These Standards aim to establish the requirements and process that interested parties must fulfill to receive authorization for the constitution and start of operations of Insurance Companies in El Salvador.

Subjects
Art. 2.- The subjects obligated to comply with the provisions established in these Standards are persons interested in constituting Insurance Companies in El Salvador, in accordance with the Insurance Companies Law.

Terms
Art. 3.- For the purposes of these Standards, the terms indicated below have the following meaning:
a) Central Bank: Central Reserve Bank of El Salvador; b) Law: Insurance Companies Law; c) Company(ies): Insurance Company(ies); and d) Superintendence: Superintendence of the Financial System.

CHAPTER II
CONSTITUTION, ORGANIZATION, AND SHARE CAPITAL

Regarding Constitution and Organization
Art. 4.- The constitution and organization of companies shall be governed by the provisions contained in Chapter I of Title Two of the Law and by these Standards; in their absence, the provisions of the Commercial Code shall apply.

Regarding Minimum Capital
Art. 5.- The minimum paid-in share capital to constitute a company shall be in accordance with what is established in Article 14 of the Law.

Art. 6.- The capital contribution for constitution must be accredited by deposit in the Central Bank, in the name of the company being constituted, the return of which must be made upon request by the Central Bank after the deed of constitution has been registered in the Commerce Registry, funds that must be used to cover organization expenses and other operations authorized by the Superintendence.

CHAPTER III
REQUIREMENTS FOR CONSTITUTION

Regarding the Application for Authorization of Constitution Art. 7.- Persons interested in forming a company must submit to the Superintendence the application for authorization to constitute the company, accompanied by the following information:
a) Draft social deed incorporating the bylaws. This draft must contain the requirements specified in Articles 22 and 194 of the Commercial Code, those mentioned in the Notary Law and the Insurance Companies Law; b) Business plan including the following:
i. Organizational and administrative scheme of the company;
ii. Financial projections for two years indicating expected profitability, detailing the premises used;
iii. Description of the plans the applicant intends to develop in the short, medium, and long term, indicating viability and feasibility, both economic and financial. Developing at minimum the commercial, financial, and investment plans;
iv. Share capital;
v. Shareholding participation regarding subsidiaries;
vi. Internal policies that the company will implement;
vii. Financial statements and their projections for two years, detailing the premises used; and
viii. Minimum Projected Net Worth for two years and in accordance with what is required in Article 30 of the Law.
c) For the natural persons who make up the list of future shareholders, the information described in Annex No. 1 of these Standards must be presented; d) For the legal persons who make up the list of future shareholders, the information described in Annex No. 2 of these Standards must be presented; e) For future directors, the following information must be presented:
i. Sworn declaration of not having the disqualifications indicated in Article 12 of the Law, according to the model in Annex No. 3 of these Standards;
ii. Current certificate of criminal records, issued by the General Directorate of Penal Centers; and
iii. Resume, including specific details of general information.

The content of items i) and ii) shall apply to spouses and relatives within the first degree of consanguinity.

f) Name or corporate name of the auditor or firm that will conduct the external audit of the company, duly registered in the Registry of External Auditors maintained by the Superintendence and having been authorized to offer external audit services to insurance companies; and g) In the case that future shareholders are insurance companies, Central American reinsurers, or other foreign entities, they must additionally present the following requirements:
i. International classification of the applicant entity, issued by an internationally recognized rating agency; and
ii. Certification issued by the competent authority stating that the applicant entity operates in accordance with the prudential regulation and supervision of its country of origin and is complying with the provisions applicable to it.

Public or authentic documents emanating from a foreign country, as well as their photocopies, may be admitted without the need for legalization or apostille, provided they allow reasonable verification of their authenticity, integrity, and content, in accordance with what is provided in Article 4-A of the Administrative Procedures Law. (1)

In the case that documents are not in the Spanish language, they must be translated in accordance with what is provided in the Law on the Practice of Notarial Services of Voluntary Jurisdiction and Other Proceedings.

The application and documentation may be submitted through the means made available by the Superintendence, which may be electronic. In any case, the period referred to in Article 8 of these Standards shall begin to run from the next business day after the application has been submitted.

CHAPTER IV
PROCESSING OF THE APPLICATION

Authorization Process for the Application for Constitution Art. 8.- Upon receipt of the application to constitute the company, in accordance with what is established in Chapter III of these Standards, the Superintendence will proceed to verify compliance with the requirements defined in the Law and in these Standards, having a period of up to thirty days for its review.

If the application is not accompanied by complete and properly formatted information, as detailed in Chapter III of these Standards, the Superintendence, due to the lack of necessary requirements, may require applicants to present the missing documents within a period of ten business days counted from the day following notification, a period that may be extended at the request of the interested parties when there are reasons justifying such extension.

The Superintendence in the same notice will indicate to applicants that if they do not complete the information within the aforementioned period, it will proceed without further procedure to archive the application, leaving them free to submit a new application.

If after analyzing the documentation presented in accordance with Chapter III of these Standards, the Superintendence has observations or when the documentation or information presented is not sufficient to establish the facts or information intended to be accredited, the Superintendence will notify applicants to remedy the deficiencies communicated to them or present additional documentation or information as required.

Applicants will have a maximum period of ten business days counted from the next business day following notification, to resolve the observations or present the additional information required by the Superintendence.

The Superintendence may, through a reasoned resolution, extend the period indicated in the previous subsection by up to another ten business days, when the nature of the observations or deficiencies notified so requires.

Extension Period
Art. 9.- Interested applicants wishing to constitute the company may submit to the Superintendence an application for extension of the period indicated in the fifth subsection of Article 8 of these Standards, before the expiration of said period, must express the grounds on which it is based and propose, if applicable, the pertinent proof.

The extension period may not exceed ten business days and will begin from the next business day following the expiration date of the original period.

Suspension of the Period
Art. 10.- The period of up to thirty days indicated in the first subsection of Article 8 of these Standards, shall be suspended for the days that elapse between the notification of the request for information or documentation referred to in the second and fifth subsections of said article, until the observations required by the Superintendence are remedied.

Regarding the Resolution
Art. 11.- Once the complete and properly formatted documentation has been presented, the Superintendence will publish in two national circulation print media or another digital publication platform with greater or equal coverage or on its website, in accordance with what is established in the current legal framework, for a single time, and at the expense of the interested parties, the following:

a) List of shareholders who will acquire one percent or more of the capital.
In the case that shareholders are companies, the list of shareholders of these that control more than five percent of the share capital will also be published; and b) List of the initial directors of the company to be formed.

In the case of objections by any person, regarding the quality of the shareholders and directors who will make up the company, these must be submitted in writing to the Superintendence, within a period not exceeding fifteen days after the aforementioned publication, attaching pertinent proof. The objections presented will be confidential.

Art. 12.- Having met the requirements established in Articles 7 and 8 of these Standards, the Superintendence will have a maximum period of ninety days to issue the relevant resolution, counted from the date on which the petitioners have completed the information that was required of them.

The Superintendence will proceed to notify applicants of the resolution, within a maximum period of three business days, from the date it was issued.

Art. 13.- If the resolution is favorable, petitioners will have a maximum period of six months, counted from notification, to constitute the company.

Art. 14.- Prior to the presentation of the testimony of the deed of constitution in the Commerce Registry, it must be presented to the Superintendence so that it qualifies whether the terms stipulated in the social agreement conform to the projects that were previously authorized and verifies that the constitution capital has been paid.

Art. 15.- Having complied with the above, the Superintendence will proceed to extend a certificate containing the favorable qualification so that it can be presented in the Commerce Registry for the corresponding registration.

Art. 16.- The Superintendence will proceed to notify applicants of the certificate containing the favorable qualification, within a maximum period of three business days, from the date it was issued.

CHAPTER V
START OF OPERATIONS

Regarding the Start of Operations
Art. 17.- Within a period of six months counted from the date of the resolution containing the authorization for the constitution of the company, the legal representative must submit the application for authorization of the start of operations with the manuals of functions and operational procedures with the requirements contained in Annex No. 4 of these Standards, description of furniture, equipment, and software to be used, and of the insurance to be contracted.

Authorization Process for the Application for Start of Operations Art. 18.- Upon receipt of the application for authorization of the start of operations in accordance with what is established in the previous article, the Superintendence will proceed to verify compliance with the requirements defined in the Law and in these Standards, having up to twenty business days for the authorization or denial of the start of operations.

If the application is not accompanied by complete and properly formatted information, as detailed in Article 17 of these Standards, the Superintendence, due to the lack of necessary requirements, may require applicants to present the missing documents within a period of ten business days counted from the day following notification, a period that may be extended at the request of the interested parties, when there are reasons justifying such extension.

If after analyzing the documentation presented in accordance with Article 17 of these Standards, the Superintendence has observations or when the documentation or information presented is not sufficient to establish the facts or information intended to be accredited, the Superintendence will notify applicants to remedy the deficiencies communicated to them or present additional documentation or information as required.

Applicants will have a maximum period of ten business days counted from the next day following notification, to resolve the observations or present the information required by the Superintendence.

Extension Period
Art. 19.- Applicants may submit to the Superintendence an application for extension of the period indicated in the fifth subsection of Article 18 of these Standards, before the expiration of said period, must express the grounds on which it is based and propose, if applicable, the pertinent proof.

The extension period may not exceed ten business days and will begin from the next business day following the expiration date of the original period.

Suspension of the Period
Art. 20.- The period of twenty business days indicated in the first subsection of Article 18 of these Standards, shall be suspended for the days that elapse between the notification of the request to complete information or documentation referred to in the second and fifth subsections of said article, until the interested parties remedy the observations required by the Superintendence.

Regarding the Resolution of the Start of Operations Art. 21.- Having complied with what is established in Articles 17 and 18 of these Standards, having verified their internal controls and procedures, having registered the social deed in the Commerce Registry and having registered the shares in a stock exchange established in the country, the Superintendence will certify that the insurance company may commence its operations, which it will notify within a maximum period of three business days from the date the authorization certificate for the start of operations is issued. This certificate will be valid for a period of one year, counted from its notification.

Regarding Publication
Art. 22.- The Superintendence's certification, indicating the name of the company, the data related to the granting and registration of its social deed, the amount of paid-in capital as well as the names of its directors and administrators, will be made known through publications that will be made at the expense of the respective company, for a single time, in two national circulation print media or another digital publication platform with greater or equal coverage or on its website, in accordance with what is established in the current legal framework.

Extension of Start of Operations
Art. 23.- If the period indicated in Article 21 of these Standards has elapsed and the company has not commenced its operations, the Superintendence may grant, upon request and based on the justifications of the case, an extension of up to six months. This must be submitted at least one month in advance of the expiration of the original period.

Art. 24.- Prior to the start of its operations and with a minimum of one month in advance, the company must inform the Superintendence of the following:
a) The day on which it will commence its operations with the public; b) Public service hours; and c) List of executive personnel and registry of authorized signatures.

Revocation of Authorization, Dissolution, and Liquidation Art. 25.- If upon the expiration of the original period or the extension, if applicable, to commence operations, the company does not do so, it will be considered that there is an impossibility on its part to achieve its main purpose; therefore, being one of the causes of dissolution mentioned in Article 187 of the Commercial Code, the Superintendence will proceed to revoke the authorization to operate and will remit to the Attorney General's Office of the Republic the necessary documentation so that the dissolution and liquidation process begins.

Modifications to Accounting or Information Systems Art. 26.- Once the accounting systems and information systems are authorized, structural modifications that a company wishes to make to them must be previously notified to the Superintendence. When the company wishes to make changes to databases, systems, or computer programs that are related to products and services regarding insurance or sureties, as the case may be, reinsurance, claims, technical and mathematical reserves, loans, and investments, and accounting, it must inform the Superintendence prior to its implementation.

CHAPTER VI
OTHER PROVISIONS AND VALIDITY

Sanctions
Art. 27.- Non-compliance with the provisions contained in these Standards will be sanctioned in accordance with what is established in the Law on Supervision and Regulation of the Financial System.

Derogatory
Art. 28.- These Standards repeal the “Instruction to Establish and Operate New Insurance Companies in El Salvador” (NPS1-01), approved by the Board of Directors of the Superintendence of the Financial System in Session No. CD-76/1998 of November 5, 1998, whose Organic Law was repealed by Legislative Decree No. 592 containing the Law for the Supervision and Regulation of the Financial System, published in the Official Gazette No. 23, Volume No. 390, dated February 2, 2011.

Transitory
Art. 29.- Applications submitted in accordance with the provisions of the “Instruction to Establish and Operate New Insurance Companies in El Salvador” (NPS1-01), and which were pending at the time these Standards entered into force, will be continued and concluded in accordance with the regulations under which they began.

Unforeseen Aspects
Art. 30.- Aspects not provided for in terms of regulation in these Standards will be resolved by the Central Bank through its Standards Committee.

Validity
Art. 31.- These Standards will enter into force as of March 15, two thousand twenty-four.

CNBCR-03/2024
NRP-56
TECHNICAL STANDARDS FOR THE AUTHORIZATION OF THE ESTABLISHMENT AND START OF OPERATIONS OF INSURANCE COMPANIES IN EL SALVADOR Approval: 29/02/2024 Validity: 15/03/2024 Alameda Juan Pablo II, between 15 and 17th Avenue North, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv

MODIFICATIONS:
(1) Modifications in Article 7 and in Annexes Nos. 1, 2 and 3, approved by the Central Bank through its Standards Committee, in Session No. CN-05/2026, of June 30, two thousand twenty-six, with validity starting from July 15, two thousand twenty-six

Annex No. 1
REQUIREMENTS FOR FUTURE SHAREHOLDERS
(NATURAL PERSONS)

a) Copy of the Unique Identity Document; b) Copy of the Tax Identification Number (TIN), which will be required in cases defined by the Tax Administration; c) Valid certificate of criminal records issued by the General Directorate of Penal Centers. In the case of Central American shareholders, they must present the document certifying that they have no criminal records issued by the competent authority in their country of origin; d) Certified copy of the passport, in the case of foreigners; e) General Balance Sheet prepared at the close of the year prior to the year of the application date, if the applicant is obligated to keep formal accounting; f) Audited financial statements at the close of the year prior to the application date, with their corresponding opinion; g) Sworn declaration, in which they state that they are not in any of the causes indicated in the Law, expressly mentioning each of them; h) Certificate issued by the Attorney General's Office, certifying that judicial participation in activities related to drug trafficking and related crimes, and with money laundering, terrorism financing, and financing of the proliferation of weapons of mass destruction has not been proven; or sworn declaration by the applicant, granted before a Notary. (1) i) Application to be holder of more than one percent of the shares, when applicable (Annex 5);

Annex No. 2
REQUIREMENTS FOR FUTURE SHAREHOLDERS
(LEGAL PERSONS)

a) Copy of the Tax Identification Number (TIN); b) Audited financial statements at the close of the year prior to the application date, with their corresponding opinion; c) Updated credential of the board of directors registered in the Commercial Registry; d) Testimony of the deed of incorporation and bylaws, or creation law, as applicable, in both cases with their reforms; e) For partners or shareholders who are holders of twenty-five percent or more of the shares or rights of the society, they must present the following:
i. Sworn declaration that they are not in any of the circumstances indicated in the Law; and
ii. Certificate issued by the Attorney General's Office, certifying that judicial participation in activities related to drug trafficking and related crimes, and with money laundering, terrorism financing, and financing of the proliferation of weapons of mass destruction has not been proven; or sworn declaration, granted before a Notary. (1)
f) List of current owners of the shares projected to be purchased; g) Brief study of the investment project in shares, which must contain the source of resources for the acquisition of the shares; h) Share transfer agreement signed between the parties, in case the share acquisition is more than fifty percent of the participation; i) Certification mentioning the names of the shareholders or partners of the requesting legal person, with their corresponding equity participation; j) Resolution issued by the Competition Superintendence regarding economic concentration, in cases where such authorization is required in accordance with the Competition Law. k) Application to be holder of more than one percent of the shares (Annex No. 6); Foreign legal persons must certify their existence, with documents that have legal effect in El Salvador.

Annex No. 3
MODEL OF SWORN DECLARATION FOR DIRECTORS OF INSURANCE COMPANIES.

To the Superintendence of the Financial System Present.
I, , of _______ years of age, of profession or occupation _, of nationality, from the domicile of, with Unique Identity Document No., Tax Identification Number (TIN)_ (which will be required in cases defined by the Tax Administration), in view of having been proposed to be part of the Board of Directors of the insurance company _______________, declare under oath that:

I am not a director, official, or employee of any insurance company established in El Salvador that develops the same line of business, nor a partner, agent, or representative of national or foreign insurance intermediaries.
I am not in a state of bankruptcy or insolvency and have never been judicially qualified as responsible for a fraudulent or negligent bankruptcy.
I have never been convicted by a final judgment, for crimes against property or against the public treasury.
I have never been a director, official, or administrator of any insurance company or other institution of the Financial System that has incurred asset deficiencies of twenty percent or more of the minimum required by Law, or that has required State contributions for its rehabilitation or that has been intervened by the respective supervisory entity, in which responsibility has been attributed to me.
I am not a debtor of credits in the Financial System, to which a rehabilitation reserve of fifty percent or more of the balance has been constituted.
For a better analysis of my debtor situation, I detail below the credits I currently have in the financial system:
Credit No. Amount Granted Balance Institution

I also declare that I am a shareholder in more than twenty-five percent of the social capital of the entities detailed below:
6. I have not participated directly or indirectly in the commission of serious infractions of the Laws and Standards governing the Financial System.
That my spouse is ______________________________and relatives of the first degree of consanguinity are:

Annex No. 3
Name Class of Kinship
Note: Item 1 does not apply to spouses and relatives of the first degree of consanguinity.
7. Judicial participation in activities related to drug trafficking and related crimes, and with money laundering, terrorism financing, and financing of the proliferation of weapons of mass destruction has not been proven against me. (1)

Annex No. 4

MINIMUM REQUIREMENTS OF FUNCTION MANUALS AND OPERATIONAL PROCEDURES

Function Manual
It must contain the organizational chart and describe the functions of each of its components, including a technical department.
The organization plan must contain the adequate segregation of insurance operations and the functions necessary for the control and supervision of operations. For these purposes, it is necessary to create at least the following departments or units:
a) Life b) Property c) Surety and other lines d) Investments, including loans e) Claims f) Reinsurance g) Information Technology h) Internal Audit i) Accounting
Operational Procedures Manual
This manual must describe the internal control procedures (administrative and accounting) for each of the operations that the insurer will perform.
Internal control must be described by transaction cycles, preferably using the flowchart technique combined with narratives.
A section referring to the administration of the aforementioned manuals must be included, which must have modification procedures, the subjects who may propose modifications, and those authorized to keep it under their custody.
2.1 Main Transaction Cycles
The cycles considered mandatory, depending on the operations performed by the insurance company, are the following:
a) Premium Cycle
It must comprise for each type of premium the following stages: Accrual, collection, payment of commissions, refunds and cancellations, deposits, etc. b) Reinsurance Cycle Cessions, retentions, releases, commission on cessions, participation in profits of contracts, payments, etc.

Annex No. 4
c) Loan Cycles
It must comprise the following stages: Processing of the application and its respective controls, processing of the deed and its controls, granting, processing of registration of guarantees with their respective controls, and recoveries. In addition to the above, special recovery procedures through the judicial route must be prepared, with the description of the corresponding controls; as well as policies to initiate this process and those related to the recognition of losses when the results of the judicial process determine the irrecoverability of the debts. d) Surety Cycles It must include the stages described above, insofar as applicable, establishing control of the contracts granted. e) Investment Portfolio Cycles It must comprise the acquisition, sale, and redemption of securities and repo transactions. f) Claim Cycle. It must include claim amounts, adjustments, payments, salvages, and recoveries, etc. Each of the aforementioned cycles must comprise the following aspects:
a) Adequate segregation of functions; b) Description of the distribution of the original and copies of accounting documents; c) Timeliness in which transactions or accounting operations will be recorded; d) Quantification of transactions and operations; e) Systems for authorization and approval of transactions and operations; f) Information technology procedures; (General activities to be performed by computers must be described, indicating the base documents to introduce information into the system, authorizations to access the system, and the reports that will be issued); g) The method of organizing document files.
2.2 Accounting Systems and Procedures
In addition to the aforementioned cycles, procedures must be designed on the following aspects:
a) The manner in which accounting operations will be recorded, in each of the legalized books and generally in auxiliary accounting records. b) The manner of relating accounting vouchers to entries in the aforementioned books and records.

Annex No. 4
c) The authorization processes for accounting vouchers, generated by each operational department and by the accounting department. d) The calculation and accounting of interest and commissions to be received and to be paid.
2.3 Information Systems
This section of the manual must deal with the data processing systems that will be used in the different activities of an economic nature and must deal at least with insurance or surety applications, as applicable, reinsurance, claims, technical and mathematical reserves, loans, and investments, accounting, and control of liquidity. In each of these programs, at least the following must be described:
a) General description of the system and main processes b) Relational design of files c) Detailed description and design of files and fields d) User manual for the systems:

Unique identification number for reinsurers and intermediaries.
Accounting
Liquidity
Loans and investments
e) List of users who will have access, indicating the user's hierarchical level and the type of access they will have to each of the options. f) Detail of the reports generated by the system, specifying for each the frequency with which it is generated, the number of copies, and how they are distributed. g) If the systems are being developed, describe the procedure to test and approve the programs; as well as the responsibilities of these activities. In addition, the following information must be added:
a) Characteristics of the central and peripheral equipment. b) Detailed characteristics of development tools. c) Copy of the warranty or maintenance contract for the central and peripheral equipment. d) Copy of the warranty or maintenance contract for the programs, if these have been contracted to consultants. e) Procedures to perform Back-up. f) Contingency plan in case of loss of information and/or failures in the computer equipment. g) Procedure for handling access keys. h) Hygiene standards for computer equipment and its peripherals. i) Authorized standards for system maintenance. j) Graphical scheme on the interrelation and communication of data of the central system and its peripheral systems (Agencies), when applicable.

Annex No. 4
2.4 Annexes
This section must contain the different forms that the entity will use to contract with the public, to attend to transactions with its clients, and for the registration of accounting operations, but especially what relates to:
a) Policy forms, claims, premiums, applications, contracts, securities, and other documents that will be used in the operations to be performed. b) Models of the legalized accounting books that will be used. c) Forms for accounting documents of income, expenses, and journal entries.

Annex No. 5

APPLICATION FOR AUTHORIZATION TO ACQUIRE AND BE OWNER OF SHARES IN EXCESS OF 1% (NATURAL PERSONS) To the Superintendence of the Financial System Present.
I, ______________________, of ___________ years of age, of profession or occupation ________________________of nationality ______________________, from the domicile of ______________________, with Unique Identity Document No ______________, Tax Identification Number (TIN) ____________ (which will be required in cases defined by the Tax Administration), request authorization to acquire and be owner of ___________________shares in _____________________ in excess of 1% of its social capital. For the effect of the regulations established in Art. 6 of the Insurance Companies Law, I declare under oath the following personal information:
I. THAT I AM THE OWNER OF THE FOLLOWING INVESTMENTS IN COMPANIES THAT WILL BE SHAREHOLDERS OF THE INSURANCE COMPANY (OPERATING OR IN FORMATION)

Society TIN Name of Partners TIN Nominal Value each Total Shares Nominal Value Total % Participation Insurance Society

II. THAT I AM A DEBTOR IN THE FOLLOWING INSTITUTIONS OF THE FINANCIAL SYSTEM.

Institution Amount Maturity Destination Guarantee

Annex No. 5
III. THAT I HAVE BEEN AN OFFICIAL, DIRECTOR, OR MANAGER (FACTOR) IN THE FOLLOWING INSTITUTIONS OF THE FINANCIAL SYSTEM:

Institution Position Held Period

IV. POSSIBLE TRANSFERRORS OR SOURCES OF ACQUISITION OF THE SHARES

The names of the persons who will transfer their share participation to me are:
___________________________________________________________________________ ___________________________________________________________________________ or the acquisition of shares I plan to carry out through a public offering of shares.

V. AMOUNT OF THE TRANSACTION
The transaction or transactions will amount to a sum of (Amount in United States Dollars in numbers and letters).
VI. THAT I AM AWARE OF THE PENAL RESPONSIBILITIES RELATED TO THE FORGERY OF DOCUMENTS CONTAINED IN THE PENAL CODE.
Likewise, I declare that I am aware of the reasons why the Superintendence may deny the acquisition of shares by more than 1%; that I am not in any of them; and that I meet the requirements for the requested authorization. And for the effects of the prior authorization required by the Insurance Companies Law, I sign this at _______________, on the ________ day of the month of _____________ of two thousand ______.

Signature of the Applicant
Documents attached to the application:

Copy of the Unique Identity Document.
Copy of the Tax Identification Number (TIN) which will be required in cases defined by the Tax Administration.
Valid certificate of criminal records, issued by the General Directorate of Penal Centers.

Annex No. 6

APPLICATION FOR AUTHORIZATION TO ACQUIRE AND BE OWNER OF SHARES IN EXCESS OF 1% (LEGAL PERSONS) To the Superintendence of the Financial System Present.
I, ____________________________________, of _______ years of age, of profession or occupation ___, of nationality , from the domicile of, with Unique Identity Document No., and Tax Identification Number (TIN) __________________ (which will be required in cases defined by the Tax Administration), in the capacity of representative of the Society __________________________________, of nationality _______________________, with Tax Identification Number (TIN) _______________________, registered under No. ______________, Folio ____________________, Book _____________ dated __________________ of the Commercial Registry of _______________________, I request that my represented party be authorized to be the owner of ________________shares of ______________ in excess of 1% of its social capital. I declare under oath the following information about my represented party:
I. INVESTMENTS IN COMPANIES THAT WILL BE SHAREHOLDERS OF THE INSURANCE COMPANY (OPERATING OR IN FORMATION) Art. 6 of the Insurance Companies Law

Name TIN Quantity of Shares Nominal Value each Nominal Value Total % Participation Insurance Society

II. THAT IT IS A DEBTOR IN THE FOLLOWING INSTITUTIONS OF THE FINANCIAL SYSTEM.
Institution Amount Maturity Destination Guarantee

III. LIST OF PARTNERS OR SHAREHOLDERS OF MY REPRESENTED PARTY:
Name of Partners TIN Nationality Share Quantity in the Society Nominal Value Nominal Value Total % Participation

Annex No. 6
IV. POSSIBLE TRANSFERRORS OR SOURCES OF ACQUISITION OF THE SHARES

V. AMOUNT OF THE TRANSACTION
The transaction or transactions will amount to a sum of (Amount in United States Dollars in numbers and letters).

VI. THAT I AM AWARE OF THE CRIMINAL RESPONSIBILITIES REGARDING THE FORGERY OF DOCUMENTS CONTAINED IN THE PENAL CODE.

Likewise, I declare that I am aware of the causes for which the Superintendence may deny the acquisition of shares for more than 1%; that my represented entity is not in any of them; and that it complies with the requirements for the requested authorization.

And for the purposes of the prior authorization required by the Insurance Companies Law, I sign this at _________________, on the ________ day of the month of _____________ of two thousand ______.

Signature of the Legal Representative

Documents attached to the application:

Copy of the Tax Identification Number (NIT).
Audited Financial Statements, with their corresponding opinion.
Certification of the names of the main shareholders or partners of the legal entity shareholder of the requesting entity.
Updated credentials of the board of directors registered in the Commercial Registry.
Certified photocopy of the articles of incorporation, with their corresponding modifications.
List of the current owners of the shares that are projected to be purchased.
Brief study of the investment project in shares, which must contain the source of resources for the acquisition of the shares.

Technical Standards for the Authorization of Constitution and Start of Operations of Insurance Companies in El Salvador

Lineage: In force

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