Technical Standards for the Calculation of Minimum Net Worth of Insurance Companies

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv CNBCR-01/2024 NRP-52 TECHNICAL STANDARDS FOR THE CALCULATION OF MINIMUM NET WORTH OF INSURANCE COMPANIES Approval: 31/01/2024 Validity: 15/02/2024

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

CONSIDERING:

I. That Article 29 of the Insurance Companies Law establishes that insurance companies must, at all times, have a minimum net worth that allows them to have available resources to cover extraordinary obligations caused by deviations in claims experience.

II. That Article 30 of the Insurance Companies Law establishes the components for the calculation of Minimum Net Worth, which in turn will allow the determination of net worth deficiencies.

III. That Article 31 of the Insurance Companies Law establishes the provisions regarding the determination of the solvency margin.

IV. That Article 54 of the Insurance Companies Law establishes the regularization processes that insurance companies must follow in the event of a net worth deficiency.

V. That Article 118 of the Insurance Companies Law establishes the percentages for the application of the solvency margin.

VI. That Article 99 letter c) of the Supervision and Regulation of the Financial System Law establishes that it is the responsibility of the Standards Committee of the Central Reserve Bank of El Salvador to approve technical standards for the preparation, approval, presentation, and dissemination of financial statements and supplementary information of the members of the financial system; for the determination of accounting obligations and the principles according to which they must keep their accounting and the establishment of criteria for the valuation of assets, liabilities, and the constitution of provisions and reserves for risks, all of the foregoing in accordance with what is established in the Law and other applicable laws, with the purpose that the real liquidity and solvency situation of the aforementioned members is reflected.

THEREFORE,

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

AGREES to issue the following:

TECHNICAL STANDARDS FOR THE CALCULATION OF MINIMUM NET WORTH OF INSURANCE COMPANIES

CHAPTER I
OBJECT, SUBJECTS, AND TERMS

Object
Art. 1.- These Standards aim to facilitate insurance companies' application of the legal provisions regarding the Calculation of Minimum Net Worth and to establish a uniform system for presenting reports on said calculation to the Financial System Superintendence.

Subjects
Art. 2.- The subjects obliged to comply with the provisions established in these Standards are:
a) Insurance companies incorporated in El Salvador; b) Branches of foreign insurance companies established and authorized in the country; and c) Cooperative associations providing insurance services incorporated in the country.

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) Solvency Margin: Additional resources to cover obligations in excess of what is expected; d) Net Worth: Set of financial resources that support the maintenance of the company's solvency, constituted by the sum of paid-in capital, capital reserves, and other financial resources, minus credits to related parties and participations in shares of subsidiaries, joint investment companies, and other insurance companies; e) Insurance Companies: Includes companies incorporated in El Salvador, branches of foreign insurers, and cooperative associations providing insurance services; and f) Superintendence: Financial System Superintendence.

CHAPTER II
NET WORTH DEFICIENCY

Minimum Net Worth
Art. 4.- In accordance with Article 30 of the Law, the Minimum Net Worth will correspond to the greater value between:
a) The Net Worth necessary to maintain a Total Debt to Net Worth ratio not exceeding five times; in other words, the Total Debt to Net Worth ratio is the quotient of dividing Total Debt by five. This calculation is applicable to the entirety of all insurance and suretyship groups or lines; and b) The amount resulting from the sum of the calculations of the Solvency Margins established by the Law, calculated separately for each of the groups or lines in which the company may operate. In any case, the Minimum Net Worth cannot be less than the amount of the Minimum Social Capital.

Regularization Process
Art. 5.- When insurance companies incur net worth deficiencies, the regularization process referred to in Articles 53, 54 letter b), and 55 of the Law will be applied.

Such deficiencies will be determined through the procedure established in Annex No. 4 of these Standards.

Art. 6.- The deadlines to overcome deficiencies arising from Net Worth with respect to Minimum Net Worth or for losses greater than twenty percent of Net Worth will be counted from the date of their determination.

The deadline to resolve on the request for reconsideration referred to in letter b) of Article 54 of the Law will be counted from the date of presentation of said request to the Superintendence.

CHAPTER III
CALCULATION OF MINIMUM NET WORTH

Art. 7.- The determination of the Net Worth described in Annex No. 1 of these Standards will be carried out in accordance with what is established by Article 32 of the Law, including fifty percent of net profits after provision for income tax during the months of January to December.

In the case of the related credits referred to in Annex No. 1 of these Standards, a list of such credits must be sent to the Superintendence in accordance with Article 28 of the Law.

Art. 8.- The procedure to establish the Total Debt to Net Worth ratio referred to in letter a) of Article 30 of the Law is developed in Annex No. 2 of these Standards.

Art. 9.- The components for the calculation of Minimum Net Worth, which in turn will allow the determination of net worth deficiencies, are summarized in Annex No. 13 of these Standards.

Art. 10.- In accordance with Article 31 of the Law, the Solvency Margin will be determined based on the following procedure:

A. For Property, Accident, Health, and Life-Complementary Insurance The basic elements to determine the Solvency Margin established in letter a) of Article 31 of the Law are detailed in Annex No. 3 of these Standards, which are:
i. Premiums for direct insurance and taken reinsurance:
Refers to the sum of net product premiums after deductions for returns and cancellations of direct insurance, taken reinsurance, and co-insurance from the last twelve months to the calculation date.

ii. Total Claims:
Correspond to the sum of the following elements:
a) Direct insurance claims, taken reinsurance, and taken co-insurance; b) Direct insurance claims adjustment expenses, taken reinsurance, and co-insurance; c) Reinsurers' participation in salvages and retrocessionaires' participation in insurance salvages; d) Collective life bonuses; and e) Increase in reserves for pending claims for direct insurance and taken reinsurance.

Minus the integration of the following components:
a) Salvages and recoveries; b) Direct insurance reimbursements; c) Reimbursements for taken reinsurance and co-insurance; and d) Decreases in reserves for pending claims for direct insurance and taken reinsurance.

iii. Claims borne by reinsurers:
Constituted by the sum of claims recovered from reinsurers, plus the net increases or decreases in reserves for claims borne by reinsurers.

The accounts and sub-accounts that integrate the aforementioned elements are detailed in Annex No. 5 of these Standards.

The solvency margin for this line will be the result of the sum of the solvency margins from Annexes No. 3 and 4 of these Standards.

B. For the Pension, Annuity, and Pensions Line The basic elements to develop the calculation of the Solvency Margin for the pension, annuity, and pensions line, which includes the total net premiums for direct insurance and taken reinsurance for pension, annuity, and pension insurance, are described in Annex No. 4 of these Standards.

The accounts and sub-accounts that integrate the elements mentioned in the previous paragraph, taking into consideration the methodology established in the property, accident, health, and life-complementary insurance line, are specified in Annex No. 6 of these Standards.

The solvency margin for this line will be the greater result between the calculation based on premiums and the calculation based on claims.

C. For Life Insurance
The basic elements for the Calculation of the Solvency Margin established in letter b) of Article 31 of the Law are detailed in Annex No. 7 of these Standards, as follows:
i. Mathematical Reserve for Direct Insurance and Taken Reinsurance:
This section includes mathematical reserves, reserves for annuities and pensions, life annuities, additional life insurance reserves, and reserves for taken reinsurance.

ii. Retained Mathematical Reserve:
Corresponds to the mathematical reserve for insurance and taken reinsurance, minus the life in-force risk reserves borne by reinsurers.

iii. Direct and Taken Reinsurance Sum Assured:
Refers to the responsibilities of insurance policies in force plus the responsibilities for taken reinsurance.

iv. Retained Sum Assured:
The direct and taken reinsurance sum assured minus the ceded reinsurance and retrocessions.

The accounts and sub-accounts that integrate these components are detailed in Annex No. 8 of these Standards.

D. For the Motor Vehicle Line
The basic elements to determine the Solvency Margin established in letter c) of Article 31 of the Law are detailed in Annex No. 9 of these Standards.

The accounts and sub-accounts that integrate the basic elements mentioned in the previous paragraph are detailed in Annex No. 10 of these Standards.

E. For Earthquake Catastrophic Risk
The basic elements to develop the Calculation of the Solvency Margin for earthquake catastrophic risks established in letter d) of Article 31 of the Law are detailed in Annex No. 11 of these Standards.

The accounts and sub-accounts that integrate the basic elements mentioned in the previous paragraph are specified in Annex No. 12 of these Standards.

For the purposes of said calculation, the retained and in-force responsibilities correspond to commitments for earthquake insurance policies in force and taken reinsurance, deducting from these the responsibilities borne by reinsurers.

F. For Suretyship Operations
The basic elements to develop the calculation of the Solvency Margin established in letter e) of Article 31 of the Law are described in Annex No. 11 of these Standards.

The accounts and sub-accounts that integrate the basic elements mentioned in the previous paragraph are specified in Annex No. 12 of these Standards.

For this calculation, the net responsibility for suretyship and the cleaning reserve are considered as the responsibilities for suretyship policies in force and taken suretyship, deducting from these the responsibilities for ceded suretyship and suretyship retrocessions, as well as the cleaning reserve.

Art. 11.- The basic elements mentioned by the Law to determine the investment base are detailed in Annex No. 14 of these Standards.

CHAPTER IV
OTHER PROVISIONS AND VALIDITY

Information Submission
Art. 12.- Insurance companies will monthly submit to the Superintendence the information related to the Minimum Net Worth according to the Annexes of these Standards, by means of a note signed by the Manager or whoever performs a similar function, within the first six business days following the month being reported, except for the month of December, which will be presented within the first twenty business days of January, and June within the first ten business days of July.

Art. 13.- According to the accepted experience of the insurance sector, the seismic zone with the highest exposure is that comprised between the departments of San Salvador and La Libertad, from the following districts:
01 San Salvador
02 Apopa
03 Ayutuxtepeque
04 Cuscatancingo
05 Ciudad Delgado
06 Ilopango
07 Mejicanos
08 Nejapa
09 Panchimalco
10 Rosario de Mora
11 San Marcos
12 Santiago Texacuangos
13 Santo Tomás
14 Soyapango
15 Tonacatepeque
16 Santa Tecla
17 Antiguo Cuscatlán
18 Huizúcar
19 Nuevo Cuscatlán

Sanctions
Art. 14.- Non-compliance with the provisions contained in these Standards will be sanctioned in accordance with what is established in the Supervision and Regulation of the Financial System Law.

Repeal
Art. 15.- The "Technical Standards for the Calculation of Net Worth" (NRP-01), approved by the Board of Directors of the Financial System Superintendence in Session CD-19/1997 on April 23, 1997, whose Organic Law was repealed by Legislative Decree No. 592 containing the Supervision and Regulation of the Financial System Law, published in Official Diary No. 23, Volume No. 390, of February 2, 2011.

Unforeseen Aspects
Art. 16.- Unforeseen aspects in regulatory matters in these Standards will be resolved by the Central Bank through its Standards Committee.

Validity
Art. 17.- These Standards will enter into force as of February 15, 2024.

Annex No. 1
Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv CNBCR-01/2024 NRP-52 TECHNICAL STANDARDS FOR THE CALCULATION OF MINIMUM NET WORTH OF INSURANCE COMPANIES Approval: 31/01/2024 Validity: 15/02/2024

NAME OF INSURANCE COMPANY:_________________________________ DETERMINATION OF NET WORTH AS OF __ OF __ OF 20__

ACCOUNT DETAIL BALANCE
3101 Paid-in Capital
3501010 Legal Reserve
3501020 Statutory Reserves
3502 Voluntary Reserves
3601 Revaluations (50%) 1/
3602 Undistributable Profits
3802010 Profits from Previous Years
3801010 Profits from Current Year (50% from January to December net of ISR provision at year-end) SUB TOTAL - Less:
Related Credits (Articles 27 and 28 of the Law) Participation in Shares of Companies 3802020 Loss from Previous Years 3801020 Loss from Current Year SUB TOTAL - NET WORTH -

Annex No. 2
Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv CNBCR-01/2024 NRP-52 TECHNICAL STANDARDS FOR THE CALCULATION OF MINIMUM NET WORTH OF INSURANCE COMPANIES Approval: 31/01/2024 Validity: 15/02/2024

NAME OF INSURANCE COMPANY: ____________________________________ DETERMINATION OF TOTAL DEBT TO NET WORTH RATIO AS OF __ OF ____ OF 20__

CODE ACCOUNT BALANCE
2 LIABILITIES
Less:
LIFE MATHEMATICAL RESERVES
220101 Long-term individual life mathematical reserves 220109 Additional life insurance reserves 2202 Mathematical reserves for pension, annuity, and pension insurance 4301010 Increase in long-term individual life mathematical reserve 4301090 Adjustment of additional life insurance reserve 4302 Increase in pension, annuity, and pension insurance reserves Plus 5201010 Decrease in long-term individual life mathematical reserves 5201090 Adjustment of additional life insurance reserves 5202 Decrease in pension, annuity, and pension insurance mathematical reserves TOTAL LIFE MATHEMATICAL RESERVES - TOTAL LIFE MATHEMATICAL RESERVES *0.67 - Less:
2208 Provision Reserves
TOTAL DEBT

DEBT RATIO (NOT EXCEEDING FIVE TIMES)
TOTAL DEBT A / MAXIMUM DEBT RATIO

Annex No. 3
Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv CNBCR-01/2024 NRP-52 TECHNICAL STANDARDS FOR THE CALCULATION OF MINIMUM NET WORTH OF INSURANCE COMPANIES Approval: 31/01/2024 Validity: 15/02/2024

NAME OF INSURANCE COMPANY:_________________________________ CALCULATION OF SOLVENCY MARGIN AS OF ____ OF _________ OF 20__. PROPERTY, ACCIDENT, HEALTH, AND LIFE-COMPLEMENTARY INSURANCE VALUES

BASED ON PREMIUMS
1 Total Net Premiums for Direct Insurance and Taken Reinsurance 1_/ (Article 31, letter a, No. 1 of the Law) 0 2 PREVIOUS AMOUNT x 31% (Article 118, letter a) of the Law) 0 3 Total Claims 0 4 Claims Borne by Reinsurers 0 5 Net Claims after Reinsurance (3 - 4) 0 6 Net Claims after Reinsurance / Total Claims x 100 (5 / 3 * 100) 2_/ 0% 7 Minimum Percentage (Article 31, letter a, No. 1 of the Law) 50% 8 CALCULATION RESULT [ 2 * (the greater between 6 and 7)] 0

BASED ON CLAIMS
9 Average. Claims for Direct Insurance and Taken Reinsurance. Last 36 months to the calculation date (Article 31, letter a), No. 2 of the Law) 0 10 PREVIOUS AMOUNT x 56% (Article 118, letter b) of the Law) 0 11 Net Claims after Reinsurance / Total Claims x 100 (5 / 3 * 100) 2_/ 0% 12 Minimum Percentage (Article 31, letter a), No. 2 of the Law) 50% 13 CALCULATION RESULT [ 10 * (the greater between 11 and 12)] 0 14 SOLVENCY MARGIN (The greater between 8 and 13) 0 1_/ From the last twelve months to the calculation date 2_/ In case that Total Claims are equal to or less than Claims Borne by Reinsurers, the Net Claims after Reinsurance/Total Claims Ratio will be assigned a value of zero percent

Annex No. 4
Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv CNBCR-01/2024 NRP-52 TECHNICAL STANDARDS FOR THE CALCULATION OF MINIMUM NET WORTH OF INSURANCE COMPANIES Approval: 31/01/2024 Validity: 15/02/2024

NAME OF INSURANCE COMPANY:_____________________________________ CALCULATION OF SOLVENCY MARGIN AS OF ____ OF _____________ OF 20__.

PENSION, ANNUITY, AND PENSION INSURANCE VALUES BASED ON PREMIUMS 1 Total Net Premiums for Direct Insurance and Taken Reinsurance 1_/ (Article 31, letter a), No. 1 of the Law) 0 2 PREVIOUS AMOUNT x 31% (Article 118, letter a) of the Law) 0 3 Total Claims 0 4 Claims Borne by Reinsurers 0 5 Net Claims after Reinsurance (3 - 4) 0 6 Net Claims after Reinsurance / Total Claims x 100 (5 / 3 * 100) 2_/ 0.0% 7 Minimum Percentage (Article 31, letter a), No. 1 of the Law) 50.0% 8 CALCULATION RESULT [ 2 * (the greater between 6 and 7)] 0 BASED ON CLAIMS 9 Average Claims for Direct Insurance and Taken Reinsurance. Last 36 months to the calculation date (Article 31, letter a), No. 2 of the Law) 0 10 PREVIOUS AMOUNT x 56% (Article 118, letter b) of the Law) 0 11 Net Claims after Reinsurance / Total Claims x 100 (5/3 * 100) 2_/ 0.0% 12 Minimum Percentage (Article 31, letter a), No. 2 of the Law) 50.0% 13 CALCULATION RESULT [ 10 *(the greater between 11 and 12) 0 14 SOLVENCY MARGIN (The greater between 8 and 13) 0 1_/ From the last twelve months to the calculation date. 2_/ In case that Total Claims are equal to or less than Claims Borne by Reinsurers, the Net Claims after Reinsurance/Total Claims Ratio will be assigned a value of zero percent.

Annex No. 5
Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv CNBCR-01/2024 NRP-52 TECHNICAL STANDARDS FOR THE CALCULATION OF MINIMUM NET WORTH OF INSURANCE COMPANIES Approval: 31/01/2024 Validity: 15/02/2024

NAME OF INSURANCE COMPANY:_________________

DATA FOR THE CALCULATION OF THE SOLVENCY MARGIN - PROPERTY, ACCIDENT, HEALTH, AND LIFE-COMPLEMENTARY LINE AS OF __ OF ____ OF 20__.

CODE ACCOUNT BALANCE
51 Product Premiums
5101010 (-) Long-term individual life premiums 5101020 (-) Short-term individual life premiums 5101040 (-) Life other plans premiums 5102 (-) Pension, annuity, and pension insurance premiums 5105 (-) Motor vehicle premiums 5107 (-) Suretyship premiums 46 (-) Returns 4601010 + Long-term individual life returns 4601020 + Short-term individual life returns 4601040 + Life other plans returns 4602 + Pension, annuity, and pension insurance returns 4605 + Motor vehicle returns 4607 + Suretyship returns PREMIUMS FOR DIRECT INSURANCE AND TAKEN REINSURANCE - CLAIMS YEAR 1 41 Claims 4101010 (-) Long-term individual life claims 4101020 (-) Short-term individual life claims 4101040 (-) Life other plans claims 4102 (-) Pension, annuity, and pension insurance claims 4105 (-) Motor vehicle claims 4107 (-) Suretyship claims 4108 (-) Mature endowments 4109 (-) Surrenders 411001001 (-) Expenses for settlement of long-term individual life claims 411001002 (-) Expenses for settlement of short-term individual life claims 411001004 (-) Expenses for settlement of life other plans claims

Annex No. 5
Alameda Juan Pablo II, between 15 and 17 1st Avenue North, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv CNBCR-01/2024 NRP-52 TECHNICAL STANDARDS FOR THE CALCULATION OF MINIMUM NET WORTH OF INSURANCE COMPANIES Approval: 31/01/2024 Validity: 15/02/2024

411002 (-) Expenses for settlement of provident insurance claims, annuities and pensions 411005 (-) Expenses for settlement of motor vehicle insurance claims 411007 (-) Expenses for settlement of surety bond claims 411105 (-) Salvages of motor vehicle insurance 411107 (-) Recoveries of surety bonds 4309 Expenses for increase in technical reserves - claims in process 4309010 (-) Expenses for increase in technical reserves - claims in process life 4309020 (-) Expenses for increase in technical reserves - claims in process provident insurance, annuities and pensions 4309050 (-) Expenses for increase in technical reserves - claims in process motor vehicles 4309070 (-) Expenses for increase in technical reserves - claims in process surety bonds Sub total - Less:
56 Salvages and recoveries
5601010 (-) Reimbursements of long-term individual life insurance 5601020 (-) Reimbursements of short-term individual life insurance 5601040 (-) Reimbursements of other life insurance plans 5602 (-) Reimbursements of provident insurance, annuities and pensions 5605 (-) Reimbursement of motor vehicle insurance 5607 (-) Reimbursement of surety bonds 5209 Income from decrease in technical reserves - claims in process 5209010 (-) Income from decrease in technical reserves claims in process life 5209020 (-) Income from decrease in technical reserves claims in process provident insurance, annuities and pensions 5209050 (-) Income from decrease in technical reserves claims in process motor vehicles 5209070 (-) Income from decrease in technical reserves claims in process surety bonds Sub total - TOTAL CLAIMS - Claims year 1 - Claims year 2 - Claims year 3 -

AVERAGE CLAIMS -
NOTES 1. The procedure used for the calculation of Claims corresponding to years 1, 2 and 3 is the same as that of TOTAL CLAIMS, specified above.
2. Deduct in the corresponding year the reimbursements from proportional and non-proportional reinsurance contracts, when catastrophic claims occur caused by natural events.
54 Claims and expenses recovered by ceded reinsurance and retrocession Less:
5401010 Claims and expenses recovered by ceded reinsurance - Long-term individual life 5401020 Claims and expenses recovered by ceded reinsurance - Short-term individual life 5401040 Claims and expenses recovered by ceded reinsurance - Other life plans 5402 Claims and expenses recovered by ceded reinsurance - Provident insurance, annuities and pensions 5405 Claims and expenses recovered by ceded reinsurance Motor Vehicles 5407 Claims and expenses recovered by ceded retrocession 540801001 Recovery of settlement expenses for long-term individual life 540801002 Recovery of settlement expenses for short-term individual life 540801004 Recovery of settlement expenses for other life plans 5408020 Recovery of settlement expenses for provident insurance, annuities and pensions 540805 Recovery of settlement expenses for motor vehicle insurance 5408070 Recovery of settlement expenses for surety bonds TOTAL CLAIMS AND EXPENSES RECOVERED - CODE CLAIMS YEAR 2 BALANCES 41 Claims 4101010 (-) Claims long-term individual life 4101020 (-) Claims short-term individual life 4101040 (-) Claims other life plans 4102 (-) Claims provident insurance, annuities and pensions 4105 (-) Claims motor vehicles

4107 (-) Claims surety bonds
4108 (-) Matured endowments
4109 (-) Surrenders
411001001 (-) Expenses for settlement of claims long-term individual life 411001002 (-) Expenses for settlement of claims short-term individual life 411001004 (-) Expenses for settlement of claims other life plans 4110020 (-) Expenses for settlement of claims provident insurance, annuities and pensions 411005 (-) Expenses for settlement of claims motor vehicle insurance 411007 (-) Expenses for settlement of claims surety bonds 411105 (-) Salvages of motor vehicle insurance 411107 (-) Recoveries of surety bonds 4309 Expenses for increase in technical reserves - claims in process 430901 (-) Expenses for increase in technical reserves - claims in process life 4309020 (-) Expenses for increase in technical reserves - claims in process provident insurance, annuities and pensions 4309050 (-) Expenses for increase in technical reserves - claims in process motor vehicles 4309070 (-) Expenses for increase in technical reserves - claims in process surety bonds Sub total

Less:
56 Salvages and recoveries
5601010 (-) Reimbursements of long-term individual life insurance 5601020 (-) Reimbursements of short-term individual life insurance 5601040 (-) Reimbursements of other life insurance plans 5602 (-) Reimbursements of provident insurance, annuities and pensions 5605 (-) Reimbursement of motor vehicle insurance 5607 (-) Reimbursement of surety bonds 5209 Income from decrease in technical reserves - claims in process 5209010 (-) Income from decrease in technical reserves claims in process life 5209020 (-) Income from decrease in technical reserves claims in process provident insurance, annuities and pensions

5209050 (-) Income from decrease in technical reserves claims in process motor vehicles 5209070 (-) Income from decrease in technical reserves claims in process surety bonds Sub total TOTAL CLAIMS CODE CLAIMS YEAR 3 BALANCES 41 Claims 4101010 (-) Claims long-term individual life 4101020 (-) Claims short-term individual life 4101040 (-) Claims other life plans 4102 (-) Claims provident insurance, annuities and pensions 4105 (-) Claims motor vehicles 4107 (-) Claims surety bonds 4108 (-) Matured endowments 4109 (-) Surrenders 411001001 (-) Expenses for settlement of claims long-term individual life 411001002 (-) Expenses for settlement of claims short-term individual life 411001004 (-) Expenses for settlement of claims other life plans 4110020 (-) Expenses for settlement of claims provident insurance, annuities and pensions 411005 (-) Expenses for settlement of claims motor vehicle insurance 411007 (-) Expenses for settlement of claims surety bonds 411105 (-) Salvages of motor vehicle insurance 411107 (-) Recoveries of surety bonds 4309 Expenses for increase in technical reserves - claims in process 430901 (-) Expenses for increase in technical reserves - claims in process life 4309020 (-) Expenses for increase in technical reserves - claims in process provident insurance, annuities and pensions 4309050 (-) Expenses for increase in technical reserves - claims in process motor vehicles 4309070 (-) Expenses for increase in technical reserves - claims in process surety bonds Sub total

Less:

56 Salvages and recoveries
5601010 (-) Reimbursements of long-term individual life insurance 5601020 (-) Reimbursements of short-term individual life insurance 5601040 (-) Reimbursements of other life insurance plans 5602 (-) Reimbursements of provident insurance, annuities and pensions 5605 (-) Reimbursement of motor vehicle insurance 5607 (-) Reimbursement of surety bonds 5209 Income from decrease in technical reserves - claims in process 5209010 (-) Income from decrease in technical reserves claims in process life 5209020 (-) Income from decrease in technical reserves claims in process provident insurance, annuities and pensions 5209050 (-) Income from decrease in technical reserves claims in process motor vehicles 5209070 (-) Income from decrease in technical reserves claims in process surety bonds Sub total TOTAL CLAIMS

Annex No. 6
Alameda Juan Pablo II, between 15 and 17 1st Avenue North, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv CNBCR-01/2024 NRP-52 TECHNICAL STANDARDS FOR THE CALCULATION OF MINIMUM NET WORTH OF INSURANCE COMPANIES Approval: 31/01/2024 Validity: 15/02/2024

NAME OF INSURANCE COMPANY: ___________________________ DATA FOR THE CALCULATION OF THE SOLVENCY MARGIN FOR PROVIDENT, ANNUITIES AND PENSIONS RISK AT ___ OF ___________ OF 20__.

CODE ACCOUNT BALANCE
NET PREMIUMS
5-1-02 Provident, annuities and pensions insurance premiums 4-6-02 - Refunds of provident, annuities and pensions insurance PREMIUMS FOR DIRECT INSURANCE AND REINSURANCE TAKEN CLAIMS YEAR 1 4-1-02 Claims for provident, annuities and pensions insurance 4-1-10-02-0 4-3-09-02-0 Expenses for settlement of claims for provident, annuities and pensions insurance Expenses for increase in technical reserves claims in process provident, annuities and pensions insurance SUB TOTAL Less 5-6-02 Refunds of provident, annuities and pensions insurance 5-2-09-02-0 Income from decrease in technical reserves, claims in process provident insurance, annuities and pensions SUB TOTAL TOTAL CLAIMS Claims year 1 Claims year 2 Claims year 3 AVERAGE CLAIMS NOTES 1. The procedure used for the calculation of claims corresponding to years 1, 2 and 3 is the same as that of TOTAL CLAIMS, specified above.
2. Deduct in the corresponding year the reimbursements from proportional and non-proportional reinsurance contracts, when catastrophic claims occur caused by natural events.
5-4-02
5-4-08-02-0
Claims and expenses recovered by ceded reinsurance, provident insurance, annuities and pensions Recoveries of settlement expenses for provident, annuities and pensions insurance TOTAL CLAIMS AND EXPENSES RECOVERED

Annex No. 7
Alameda Juan Pablo II, between 15 and 17 1st Avenue North, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv CNBCR-01/2024 NRP-52 TECHNICAL STANDARDS FOR THE CALCULATION OF MINIMUM NET WORTH OF INSURANCE COMPANIES Approval: 31/01/2024 Validity: 15/02/2024

NAME OF INSURANCE COMPANY: _____________________________ CALCULATION OF SOLVENCY MARGIN AT ____ OF _____ OF 20__.

LIFE LINE VALUES
BASED ON RESERVES
15 Mathematical Reserves for Direct Insurance and Reinsurance Taken (Article 31, letter b, No. 1 of the Law) 0 16 PREVIOUS AMOUNT x 5% (Article 118, letter c) of the Law) 0 17 Retained Mathematical Reserves 0 18 Mathematical Reserves for Direct Insurance and Reinsurance Taken (Article 31, letter b), No. 1 of the Law) 0 19 Ratio Retained Mathematical Reserves / Mathematical Reserves x 100 (17 / 18 * 100) 20 Minimum Percentage (Article 31, letter b), No. 1 of the Law) 85.0% 21 CALCULATION RESULT [ 16 * (the greater between 19 and 20)] BASED ON RISKS CAPITAL 22 Direct Sum Insured and Reinsurance Taken (Article 31, letter b), No. 1 of the Law) 0 23 Mathematical Reserves for Direct Insurance and Reinsurance Taken (Article 31, letter b), No. 1 of the Law) 0 24 Risk Capital (22 - 23) 0 25 PREVIOUS AMOUNT * 0.2% (Article 118, letter d), of the Law) 0 26 Retained Sum Insured (Article 31, letter b), No. 2 of the Law) 0 27 Retained Mathematical Reserves 0 28 RETAINED RISK CAPITAL (26 - 27) 0 29 Ratio Retained Risk Capital / Risk Capital *100 (28 / 24 * 100) 30 Minimum Percentage (Article 31, letter b), No. 2 of the Law) 50.0% 31 CALCULATION RESULT [ 25 * (the greater between 29 and 30 )] BASED ON LIFE ANNUITIES 32 Life Annuities 33 CALCULATION RESULT (32 * 8.0%) (Article 31, letter b), No. 3 of the Law; Article 118, letter e), of the Law) 34 SOLVENCY MARGIN (21+31+33)

Annex No. 8
Alameda Juan Pablo II, between 15 and 17 1st Avenue North, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv CNBCR-01/2024 NRP-52 TECHNICAL STANDARDS FOR THE CALCULATION OF MINIMUM NET WORTH OF INSURANCE COMPANIES Approval: 31/01/2024 Validity: 15/02/2024

NAME OF INSURANCE COMPANY: _______________

DATA FOR THE CALCULATION OF THE SOLVENCY MARGIN FOR LIFE INSURANCE AT __ OF ____ OF 20__.

CODE CONCEPT BALANCE
MATHEMATICAL RESERVES
220101 Mathematical Reserves long-term individual life 220109 Additional Reserves Life Insurance 2202 Mathematical Reserves provident insurance, annuities and pensions TOTAL

RISK CAPITAL
610101 Liability for Policies in Force - Life
610101103 (-) Liabilities for Policies in Force - Life - Collective national currency 610101203 (-) Liabilities for Policies in Force - Life - Collective foreign currency 610301 Liability for reinsurance taken life insurance 610301103 (-) Liab. For reinsurance taken life national currency - collective 610301203 (-) Liab. For reinsurance taken life foreign currency - collective DIRECT SUMS INSURED AND REINSURANCE TAKEN - Less :
610501 Liabilities Ceded to local companies - Life 610501103 (-) Ceded Reinsurance - Life - Collective national currency 610501203 (-) Ceded Reinsurance - Life - Collective foreign currency 610601 Liabilities Ceded to first-tier companies abroad - Life 610601103 (-) Liabilities ceded to first-tier companies abroad. national currency Collective 610601203 (-) Liabilities ceded to first-tier companies abroad. foreign currency Collective 610701 Liab. Ceded to other foreign life insurance companies 610701103 (-) Liab. Ceded to other foreign companies. national currency Life collective 610701203 (-) Liab. Ceded to other foreign companies. foreign currency Life collective 611101 Liab. For retrocessions to local companies life insurance national currency 611101103 (-) Liab. For retrocessions to local companies national currency life collective 6111012 Liab. For retrocessions to local companies life insurance foreign currency

611101203 (-) Liab. For retrocessions to local companies foreign currency life collective 611201 Liab. For retrocessions to first-tier companies abroad life insurance 611201103 (-) Liab. For retrocessions to first-tier companies abroad. national currency life collective 611201203 (-) Liab. For retrocessions to first-tier companies foreign currency life collective 611301 Liab. For retrocessions to other foreign companies life insurance 611301103 (-) Liab. For retrocessions to other foreign companies national currency life collective 611301203 (-) Liab. For retrocessions to other foreign companies foreign currency life collective Sub total RETAINED SUMS INSURED

LIFE ANNUITIES -

Annex No. 9
Alameda Juan Pablo II, between 15 and 17 1st Avenue North, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv CNBCR-01/2024 NRP-52 TECHNICAL STANDARDS FOR THE CALCULATION OF MINIMUM NET WORTH OF INSURANCE COMPANIES Approval: 31/01/2024 Validity: 15/02/2024

NAME OF INSURANCE COMPANY: ___________________________ CALCULATION OF SOLVENCY MARGIN AT ___ OF _____ OF 20__.

MOTOR INSURANCE VALUES
BASED ON PREMIUMS
35 Premiums For Direct Insurance and Reinsurance Taken 1_/ (Article 31, letter c), No. 1 of the Law) 0 36 PREVIOUS AMOUNT x 33.0% (Article 118, letter f) of the Law) 0 37 Total Claims 0 38 Claims Borne by Reinsurers 0 39 Net Claims of Reinsurance (37 - 38) 0 40 Ratio Net Claims / Total Claims *100 (39 / 37 *100) 2_/ 41 Minimum Percentage (Article 31, letter c), No. 1 of the Law) 85.0% 42 CALCULATION RESULT [ 36 * (the greater between 40 and 41)]

BASED ON CLAIMS
43 Claims for Direct Insurance and Reinsurance Taken average last 36 months at the date of calculation (Article 31, letter c), No. 2 of the Law) 0 44 Claims borne by Reinsurers average of the last 36 months at the date of calculation 0 45 Net Claims of Reinsurance average of the last 36 months at the date of calculation (43 - 44) 0 46 PREVIOUS AMOUNT x 51.0% (Article 118, letter g) of the Law) 0 47 Ratio Net Claims / Total Claims *100 (39 / 37 *100) 2_/ 48 Minimum Percentage (Article 31, letter c), No. 2 of the Law) 85.0% 49 CALCULATION RESULT [ 46 x (the greater between 47 and 48)] 50 SOLVENCY MARGIN (The greater between 42 and 49) 1_/ From the last twelve months at the date of calculation. 2_/ In case that Total Claims are equal to or less than Claims Borne by Reinsurers, the Ratio Net Claims/Total Claims will be assigned a value of zero percent.

Annex No. 10
Alameda Juan Pablo II, between 15 and 17 1st Avenue North, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv CNBCR-01/2024 NRP-52 TECHNICAL STANDARDS FOR THE CALCULATION OF MINIMUM NET WORTH OF INSURANCE COMPANIES Approval: 31/01/2024 Validity: 15/02/2024

NAME OF INSURANCE COMPANY: __________________________________ DATA FOR THE CALCULATION OF THE SOLVENCY MARGIN FOR THE MOTOR LINE AT ___ OF ____ OF 20__.

CODE CONCEPT BALANCE
MOTOR INSURANCE PREMIUMS
5105 Premiums from motor vehicles
4605 refunds and cancellations of motor vehicle premiums TOTAL PREMIUMS FOR DIRECT INSURANCE, REINS. AND CO-INS. TAKEN

CLAIMS YEAR 1
4105 Claims for motor vehicle insurance
411005 Expenses for settlement of claims for motor vehicle insurance 411105 Salvages and recoveries-participation other entities - Motor Vehicles 4309050 Expenses for Incr. Res. for Claims in Process - Motor Vehicles SUB TOTAL

Less:
5605 Salvages and recoveries of motor vehicle insurance 5209050 Income from decr. of tech. res. claims in process motor vehicle insurance SUB TOTAL

TOTAL CLAIMS

AVERAGE CLAIMS
Claims year 1

Claims year 2

AVERAGE CLAIMS

NOTE : The procedure used for the calculation of Claims corresponding to years 1, 2 and 3 is the same as that of TOTAL CLAIMS, specified above.

CEDED CLAIMS
5405 Claims and expenses recovered by reinsurance motor vehicles AVERAGE CLAIMS Claims year 1

Claims year 2

AVERAGE CLAIMS

CLAIMS YEAR 2
4105 Claims for motor vehicle insurance
411005 Expenses for settlement of claims for motor vehicle insurance 411105 Salvages and recoveries-participation other entities - Motor Vehicles 4309050 Expenses for Incr. Res. for Claims in Process - Motor Vehicles SUB TOTAL 0 Less:
5605 Salvages and recoveries of motor vehicle insurance 5209050 Income from decrease in tech. res. claims in process motor vehicle insurance SUB TOTAL 0 TOTAL CLAIMS 0 Ceded Claims Year 2 5405 Claims and expenses recovered by reinsurance motor vehicles

CLAIMS YEAR 3
4105 Claims for motor vehicle insurance
411005 Expenses for settlement of claims for motor vehicle insurance 411105 Salvages and recoveries-participation other entities - Motor Vehicles 4309050 Expenses for Incr. Res. for Claims in Process - Motor Vehicles SUB TOTAL 0

Less:
5605 Salvages and recoveries of motor vehicle insurance 5209050 Income from decrease in tech. res. claims in process motor vehicle insurance SUB TOTAL 0 TOTAL CLAIMS 0 Ceded Claims Year 3 5405 Claims and expenses recovered by reinsurance motor vehicles

Annex No. 11
Alameda Juan Pablo II, between 15 and 17 1st Avenue North, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv CNBCR-01/2024 NRP-52 TECHNICAL STANDARDS FOR THE CALCULATION OF MINIMUM NET WORTH OF INSURANCE COMPANIES Approval: 31/01/2024 Validity: 15/02/2024

NAME OF INSURANCE COMPANY: __________
CALCULATION OF SOLVENCY MARGIN AT ____ OF _____ OF 20__.

CATASTROPHIC RISKS VALUES
51 Retained Liabilities in Zones of greater seismic exposure (Article 31, letter d) of the Law) 0 52 Deductible 0 53 Co-insurance 0 54 Net Retained Liability of Deductible and Co-insurance (51- 52 - 53) 0 55 PREVIOUS AMOUNT * 12.0% (Article 118, letter h) of the Law) 0 Less:
56 Sum Insured Excess of Loss Contracts 0

57 SOLVENCY MARGIN (If, 55 - 56 is Positive) 0

SURETY BOND OPERATIONS VALUES
58 Total Liabilities 0
59 Reinsurance and Retrocessions 0
60 Sanitation Reserve
61 NET LIABILITY (58 - 59 - 60) 0
62
SOLVENCY MARGIN (61 * 1.5%) (Article 118, letter i) of the Law ) 0

Annex No. 12
Alameda Juan Pablo II, between 15 and 17 1st Avenue North, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv CNBCR-01/2024 NRP-52 TECHNICAL STANDARDS FOR THE CALCULATION OF MINIMUM NET WORTH OF INSURANCE COMPANIES Approval: 31/01/2024 Validity: 15/02/2024

NAME OF INSURANCE COMPANY: ___________________

DATA FOR THE CALCULATION OF THE SOLVENCY MARGIN FOR CATASTROPHIC RISK - EARTHQUAKE AT __ OF ____ OF 20___.

CODE CONCEPT BALANCE
TOTAL LIABILITY
*
Liability for Policies in Force with earthquake (zone 1) * Liability for Reinsurance Taken with earthquake (zone 1) SUB TOTAL - Less:
CESIONS AND RETROCESSIONS
*
Liabilities ceded to local companies for policies with earthquake (zone 1) 610604 Liab. ceded to first-tier companies abroad with earthquake 610704 Liab. ceded to other foreign companies with earthquake 611104 Liab. For retrocessions to local companies for earthquake 611204 Liab. For retrocessions to first-tier companies abroad for earthquake 611304 Liab. For retrocessions to other foreign companies for earthquake. SUB TOTAL - RETAINED AND VALID LIABILITIES - DEDUCTIBLES ACCORDING TO REINSURANCE CONTRACTS - CO-INSURANCE ACCORDING TO REINSURANCE CONTRACTS SUM REINSURED IN EXCESS OF LOSS CONTRACT

Suggested account

INSURANCE COMPANY:

DATA FOR THE CALCULATION OF THE SOLVENCY MARGIN FOR THE SURETYSHIP LINE AS OF __ OF _______ OF 20__.

CODE CONCEPT
6102 Liabilities for Suretyship in Force
6104 Liabilities for Reinsurance Taken
TOTAL LIABILITY

6108 Liabilities for Reinsurance Ceded to local companies 6109 Liabilities for Reinsurance Ceded to first-tier companies abroad 6110 Liabilities for reinsurance ceded to other companies abroad 6114 Liabilities for retrocessions of suretyship to local companies 6115 Liabilities for Retrocessions of Suretyship to first-tier companies abroad 6116 Liabilities for Retrocessions of Suretyship to other companies abroad REINSURANCE AND RETROCESSIONS

Annex No. 13
Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv CNBCR-01/2024 NRP-52 TECHNICAL STANDARDS FOR THE CALCULATION OF MINIMUM NET WORTH OF INSURANCE COMPANIES Approval: 31/01/2024 Validity: 15/02/2024

NAME OF THE INSURANCE COMPANY: _________ _________________ SUMMARY OF THE CALCULATION OF MINIMUM NET WORTH AS OF ____ OF _______ OF 20__.

DETAIL VALUES
63 NET WORTH (article 32 of the Law)

64 REQ. ACCORDING TO TOTAL DEBT /
NET WORTH RATIO (Less than or equal to 5)

65 SOLVENCY MARGIN:
66
DAMAGE, ACCIDENT AND ILLNESS AND COMPLEMENTARY TO LIFE LINES (Sum Solvency Margin Annex 3 and Annex 4) 67 LIFE LINE 68 MOTOR LINE 69 CATASTROPHIC RISK 70 SURETYSHIP LINE 71 SOLVENCY MARGIN (Sum of 66 to 70) 72 MINIMUM SOCIAL CAPITAL (article 14 of the Law) 73 MINIMUM NET WORTH (The Greater between 64, 71 and 72) 74 SUFFICIENCY (OR INSUFFICIENCY) OF NET WORTH (73 - 63) 75 % OF SUFFICIENCY OR INSUFFICIENCY OF NET WORTH (74 / 73 * 100) 76 BASE FOR INVESTMENT (article 34 of the Law, Net Tech. Res. plus Min. Net Worth)

Annex No. 14
Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv CNBCR-01/2024 NRP-52 TECHNICAL STANDARDS FOR THE CALCULATION OF MINIMUM NET WORTH OF INSURANCE COMPANIES Approval: 31/01/2024 Validity: 15/02/2024

NAME OF THE INSURANCE COMPANY: ____________________________

BASE FOR INVESTMENT AS OF __ OF ____ OF 20__.

CODE ACCOUNT BALANCE
22 Technical Reserves
23 Reserve for claims
Total reserves -
Plus
Minimum Net Worth
BASE FOR INVESTMENT

Technical Standards for the Calculation of Minimum Net Worth of Insurance Companies

DEBT RATIO (NOT EXCEEDING FIVE TIMES)
TOTAL DEBT A / MAXIMUM DEBT RATIO

Lineage: In force

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