Technical Standards for the Registration of Entities That Mass Market Insurance Policies

NRP-67
MASS MARKET INSURANCE POLICIES
Approval: 28/06/2024
Validity: 16/07/2024

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

CONSIDERING:
I. That Article 51 of the Insurance Companies Law establishes that the promotion and placement of insurance activities carried out by insurance companies may be performed through any company or society registered in the registry maintained by the Superintendency, prior to the celebration of the agreements that may apply, provided that the contracting by the client is voluntary and that it concerns policies that are suitable for mass marketing.
II. That Article 7 letter e) of the Law for the 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 provisions of said Law and therefore to the supervision of the Superintendency of the Financial System.
III. That Article 78 letter j) of the Law for the Supervision and Regulation of the Financial System establishes that the Superintendency will organize and keep updated other registries that special laws establish.
IV. That Article 99 first paragraph of the Law for the Supervision and Regulation of the Financial System establishes that the Central Bank of Reserve of El Salvador, through its Committee of Standards, is the institution responsible for approving the technical regulatory framework that must be issued in accordance with this Law and other laws that regulate the supervised entities.
V. That in accordance with Article 101, fourth paragraph of the Law for the Supervision and Regulation of the Financial System, the powers to approve, modify, and repeal technical norms that must be complied with by the members of the financial system and other supervised entities, which were attributed to the Superintendencies or the Boards of Directors of the Superintendencies whose organic laws were repealed with this Law, are transferred to the Central Bank of Reserve of El Salvador.

THEREFORE,

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

NRP-67
MASS MARKET INSURANCE POLICIES
Approval: 28/06/2024
Validity: 16/07/2024

AGREES to issue the following:

TECHNICAL STANDARDS FOR THE REGISTRATION OF ENTITIES THAT MASS MARKET INSURANCE POLICIES

CHAPTER I
OBJECT, SUBJECTS, AND TERMS

Object
Art. 1.- These Standards aim to establish the requirements for the registration of entities that promote and place insurance policies on a mass basis, on behalf of insurance companies.

Subjects
Art. 2.- The subjects obliged to comply with the provisions established in these Standards are:
a) Insurance companies constituted in the country; b) Branches of foreign insurers established and authorized in the country; c) Cooperative associations that provide insurance services; and d) Mass insurance sellers, who are members of the Financial System.

Terms
Art. 3.- For the purposes of these Standards, the terms indicated below have the following meaning:
a) Central Bank: Central Bank of Reserve of El Salvador; b) Seller(s): Any company or society registered in the registry maintained by the Superintendency of the Financial System, dedicated to the mass marketing of insurance policies; c) Entity(ies): Subjects obliged to comply with the provisions of these Standards, described in Article 2; d) Registry: Registry of entities that mass market insurance policies; e) Insurance Companies: Includes companies constituted in El Salvador, branches of foreign insurers, and cooperative associations that provide insurance services; and f) Superintendency: Superintendency of the Financial System.

NRP-67
MASS MARKET INSURANCE POLICIES
Approval: 28/06/2024
Validity: 16/07/2024

CHAPTER II
REQUIREMENTS FOR REGISTRATION

Art. 4.- Insurance companies that intend to offer and contract insurance policies on a mass basis through Sellers must previously manage the registration of these in the Registry maintained by the Superintendency for such purposes.

Art. 5.- Insurance companies must request the necessary information from the sellers for the purpose of carrying out the corresponding registration in the Registry. Likewise, they must provide the Superintendency with any information related to the insurance operations carried out.

Art. 6.- For registration in the Registry, the insurance company must present to the Superintendency a request signed by its President, Legal Representative, or by an attorney-in-fact, including the data and information of the sellers, according to the following:
a) Name, trade name, or denomination; b) Particular address; c) Main activity or business; d) Legible copies of the instrument of constitution and its reforms, duly registered in the corresponding Registry, in which it is evident in literal or generic form that among its purposes or corporate object, the performance of acts such as the one requested is included; e) Copy of the certification of the agreement of the corresponding body, to carry out insurance policy marketing operations, issued by the competent administrator; f) Valid credential of the legal representative duly registered in the corresponding Registry; g) Valid certificate issued by the General Directorate of Penal Centers stating that the President or Legal Representative of the Seller has no criminal record; h) Financial statements with the external auditor's report, corresponding to the last three years prior to the date of the registration request; i) Copy of the most recent Financial Position Balance Sheet and Statement of Results, as of the date of the request; j) Agreement entered into between the insurance company and the seller, in which the conditions for mass insurance contracting must be established, specifying:
i. The types of insurance policies that will be mass marketed;
ii. A clause stipulating that the insured will not be charged any additional fee on the established premium;
iii. That the sellers must provide information to users clarifying that the responsibility for the insurance taken out lies with the respective insurance company and that the use of said medium for contracting does not constitute certification of its solvency;
iv. That the seller must provide information on the coverages and characteristics of the policy to be marketed, in such a way that it is understandable to potential insureds, in accordance with what is established in the Consumer Protection Law;
v. Whether the collection of premiums will be carried out by the insurance company or by the seller;
vi. Clearly establish that the insurance company will be responsible to the client in the process of presenting claims and paying indemnification, in cases where a loss occurs for the insureds or beneficiaries;
vii. The explicit indication that the seller acts before the client and/or insured, on behalf and under the responsibility of the insurance company, regarding the insurance policies taken out;
viii. The measures that the insurance company will require the seller to implement, so that the seller complies with measures to mitigate or cover risks associated with insurance operations, including those related to the prevention of money laundering, terrorist financing, and financing of the proliferation of weapons of mass destruction; (1)
ix. Indication that sellers must apply and execute the mechanisms required by the insurance company for the identification, attention, and knowledge of clients to whom insurance has been granted; if the seller has established procedures, it may use them for such purposes, provided that they are in concordance with the mechanisms required by the insurance company; and
x. Compliance with the submission of information and documentation of the insureds by the seller to the insurance company, which must be sent within ten business days following the subscription of the insurance. The information of the insureds must contain as a minimum, the policies subscribed, type and Identification Document Number, Tax Identification Number (TIN) where applicable, gender, certificate number, validity, amount and periodicity of the premium, and other information that the insurance company considers pertinent.

Additionally, clauses must be included that facilitate an adequate review of the respective performance of operations and provision of services through the seller, by the insurance companies, the Superintendency, and other supervisory bodies.

k) Models of policies to be marketed. In case the policy to be marketed or any of the documents forming part of it were already deposited with the Superintendency, they must clarify in the request the date and number of the note in which they were notified of the deposit of the same with the Superintendency. Each time a new mass marketing policy is promoted, the insurance company must send the corresponding model to the Superintendency for the respective deposit;

l) Organizational structure of the seller with indication of the unit or units that will be in charge of the marketing of insurance policies;

m) Detail of the sales points, channels, or digital media that the sellers will have;

n) Annual Training Plan for the personnel that will attend to the mass marketing of insurance, which must include a specific training program to be developed prior to the start of marketing. Once the seller is registered with the Superintendency, the insurance company must send to it, within the first five business days after each training has been imparted, the attendance list signed by the participants in cases where it was imparted in person or the participation record when it was by digital means, where attendance is proven as evidence of the implementation of said program;

o) Procedures Manuals and Internal Control Policies for the mass marketing of insurance, which must contain as a minimum, the following descriptions:
i. Procedures and controls for the marketing of policies;
ii. Delivery of policy certificates to the insured;
iii. The receipt of premiums;
iv. The transfer of received premiums to the insurance company and the entry of commissions, according to the term established in the agreement; and
v. Claims by the insureds.

p) Procedure for the submission of information and documentation of the insureds by the seller to the insurance company, in accordance with what is established in letter j) roman numeral x) of this article, specifying the position of the person delegated for its submission, as well as the attention of queries derived from the information submitted;

q) Inform regarding the technological infrastructure to be used for the mass marketing of insurance, according to the following:
i. Name of the Computer System to be used for the registration of transactions, and if these are online;
ii. Technical documentation of the Hardware and Software of the technological platform where the insurance policy to be marketed will be administered, as well as the communication diagram and security mechanisms between the insurance company and the seller; and
iii. The platform with which the insurance policy will be administered, once installed, must be tested by both parties in the different processes of the promotion and placement of the insurance to be marketed, and must be endorsed through certification by the Internal Auditor of the insurance company as evidence of the tests performed; this certification must be sent to the Superintendency.

r) Document with instructions for sales management with the client (Sales Script), considering what is stipulated in Article 30 of the Regulation of the Consumer Protection Law, in case the sale is made by telemarketing or digital media; and

s) Advertising material to be used for the initial promotion of the insurance policy and at the moment of contracting, detailing in its content as a minimum what is required in Article 30 of the Regulation of the Consumer Protection Law.

In the case that the seller corresponds to an entity supervised by the Superintendency, and the documentation required in letters f), g), and h) of this article, was already in the possession of this entity, and the same is duly updated and its effects have not expired for legal causes, it will not be necessary to present it again, the insurance company must make reference to said situation in the presentation of the request.

The Superintendency must publish on its website the Registry of Sellers that are with valid authorization.

Procedure for registration of sellers
Art. 7.- Upon receipt of the registration request in the registry, in accordance with what is established in Article 6 of these Standards, the Superintendency will proceed to verify compliance with the requirements defined in these Standards, as well as the most recent credit rating of the seller in the Financial System prior to the presentation of the request, when applicable, which must be categories "A" or "B", to issue the resolution authorizing or denying the request, within a maximum period of thirty business days. In all cases, the denial must be reasoned.

If the request is not accompanied by the complete and duly formatted information detailed in Article 6 of these Standards, the Superintendency, due to the lack of necessary requirements, may require the applicants to present the missing documents within a period of ten business days counted from the day following the notification, a period that may be extended at the request of the company, when there are reasons justifying it.

The Superintendency in the same notice will indicate to the applicants that if the information is not completed within the aforementioned period, it will proceed without further procedure to archive the request, leaving them free to present a new request.

If after the analysis of the documentation presented in accordance with Article 6 of these Standards, the Superintendency has observations or when the documentation or information is not sufficient to establish the facts or the information that is intended to be accredited, the Superintendency may warn the applicants to remedy the deficiencies communicated to them or present additional documentation or information requested by the Superintendency.

The applicants will have a maximum period of ten business days counted from the day following the notification, to remedy the observations or present the information requested by the Superintendency.

The Superintendency may, through a reasoned resolution, extend by up to another ten business days the period indicated in the previous paragraph, when the nature of the observations or deficiencies warned requires it.

The request and documentation may be presented through the means made available by the Superintendency, which may be electronic. In all cases, the period referred to in the first paragraph of this article will begin to count from the next business day after the request has been presented.

Extension period
Art. 8.- Applicants may present to the Superintendency a request for extension of the periods indicated in the fifth paragraph of Article 7 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. 9.- The period of thirty business days indicated in the first paragraph of Article 7 of these Standards, will be suspended for the days that elapse between the notification of the requirement to complete information or documentation referred to in the second and fifth paragraphs of said article, until the interested parties remedy the observations required by the Superintendency.

Once the complete and duly formatted documentation is presented, the Superintendency will proceed to give a response if the request is authorized or denied, which it will notify within a maximum period of three business days from the date the resolution is issued.

CHAPTER III
OF THE RESPONSIBILITIES OF INSURANCE COMPANIES AND SELLERS

Of the operations
Art. 10.- The insurance company assumes complete responsibility before the insured for all operations derived from insurance policies, carried out through the sellers that have been contracted with them.

Insurance companies will be responsible for ensuring that the sellers have the due registration in the Superintendency to operate as such.

Of the update and submission of information
Art. 11.- Insurance companies must ensure that the sellers with whom they operate keep their contact information updated with the Superintendency.

Art. 12.- The seller member of the financial system registered in the Superintendency will be responsible for communicating to it any modification of the information that affects what is contained in the registry entry, presenting for this purpose the corresponding documentation within a maximum period of thirty days subsequent to the event that motivates it.

In case of modifications of address, telephone, email, as well as the name and position of the persons designated to receive notifications or to receive documentation related to the seller, this must inform the Superintendency within a maximum period of seven business days.

When the marketing is carried out by an entity that is not part of the members of the financial system, referred to in the Law for the Supervision and Regulation of the Financial System, it will be the insurance company responsible for sending to the Superintendency the information established in the first and second paragraphs of this article.

Art. 13.- In accordance with what is established in the agreement entered into between the insurance company and the seller, referred to in letter j) of Article 6 of these Standards, the seller is responsible for submitting the updated information within the period and periodicity requested by the insurance company with respect to complying with the information requirements established in the "Technical Standards for the Submission of Information of Insurance Companies for the Elaboration of Statistics of the Insurance Activity" (NRP-39), approved by the Central Bank through its Committee of Standards.

Prevention of money laundering, terrorist financing, and financing of the proliferation of weapons of mass destruction (1) Art. 14.- The operations carried out by insurance companies through the sellers must comply with the Laws, Instructions, and Regulations in force related to the prevention, detection, and control of money laundering, terrorist financing, and financing of the proliferation of weapons of mass destruction. (1)

Insurance companies and sellers will be responsible for verifying compliance and management of the same.

In all cases, in insurance companies, Internal Audit, in attention to what is established in the "Technical Standards for Internal Audit for Members of the Financial System" (NRP-15) approved by the Central Bank of Reserve through its Committee of Standards, will incorporate in its annual plan the compliance with these Standards.

CHAPTER IV
OTHER PROVISIONS AND VALIDITY

Time of safeguarding of information
Art. 15.- The Registry, whether physical or electronic, of operations, transactions, and identification of clients carried out by insurance companies through the sellers, must be preserved in accordance with the period established in the Special Law for the Prevention, Control, and Sanction of Money Laundering, Terrorist Financing, and Financing of the Proliferation of Weapons of Mass Destruction. (1)

Art. 16.- Any modification in the conditions authorized by the Superintendency for the mass marketing of insurance must be previously requested by the respective insurance company for approval.

Art. 17.- The registration in the Registry is for an indefinite period, nevertheless when the Superintendency has knowledge that the actions of the seller are in contravention of what is established in the Insurance Companies Law, the Commercial Code, the Consumer Protection Law, the Law for the Supervision and Regulation of the Financial System, and these Standards, it may suspend or cancel the Registry.

Art. 18.- The suspension or cancellation of the Registry may also be made at the request of

NRP-67
MARKET INSURANCE POLICIES MASSIVELY
Approval: 28/06/2024
Validity: 16/07/2024

the insurance company or the marketers.
For these purposes, insurance companies must submit an application signed by the President or Legal Representative of the petitioning company or by a specially designated attorney-in-fact for this purpose, accompanied by the following information:
a) Name, trade name or denomination of the marketer; b) Personal address of the marketer; c) Copy of the policy and annex of the last renewal, signed between the insurance company and the marketer; and d) In case of maintaining active certificates and claims in process related to the policies that are marketed massively at the date of this application, they must send the detail of valid certificates, claims in process and a transition plan, which must guarantee that the attention of the insured, the receipt of premiums and the management of indemnity claims pass to be attended directly by the Insurer, substituting the marketer. (1) In any case, insurance companies may not massively market insurance through marketers who are suspended or cancelled from the Registry. The Superintendence will have a maximum period of ten business days to issue the relevant resolution, counted from the date on which the petitioners have completed the information that has been requested of them; resolution that will be communicated to the corresponding insurance company and marketer within a maximum period of three business days after its approval.

Art. 19.- For the Superintendence to be able to carry out the corresponding supervision, insurance companies must ensure that marketers maintain an auxiliary register on the policies issued by the insurance company, which must contain the following information:
a) Date of contracting; b) Insured amount; c) Premiums charged and pending collection; d) Commissions; and e) Cancellations.

Supervision
Art. 20.- Entities will keep at the disposal of the Superintendence, all the information that it requires for the execution of its surveillance and supervision work, including the complete and updated information of their control processes of

NRP-67
MARKET INSURANCE POLICIES MASSIVELY
Approval: 28/06/2024
Validity: 16/07/2024 subscription and claims management of the products placed through marketers, providing all the necessary collaboration either in their field visits or in extra-situ monitoring.
The Superintendence may carry out supervision directly when it deems convenient.
Insurance companies that operate through marketers who are not members of the financial system must verify that they comply with the requirements established in these Standards.

Sanctions
Art. 21.- Non-compliance with the provisions contained in these Standards, will be sanctioned in accordance with what is established in the Law of Supervision and Regulation of the Financial System.

Repeal
Art. 22.- These Standards repeal the "Standards for the Registration of Entities that Promote and Place Insurance Policies Massively" (NPS4-10), approved by the Board of Directors of the Superintendence of the Financial System in Session No. CD12/2004 of March 24, 2004, whose Organic Law was repealed by Legislative Decree No. 592 which contains the Law of Supervision and Regulation of the Financial System, published in the Official Gazette No. 23, Volume No. 390, of February 2, 2011.

Transitory
Art. 23.- Applications presented in accordance with what is established in the "Standards for the Registration of Entities that Promote and Place Insurance Policies Massively" (NPS4-10), and which were in process at the moment these Standards enter into force, will be continued and concluded in accordance with the regulations with which they began. To comply with the provisions contained in article 6 of these Standards, insurance companies will have a period of 6 months from the entry into force of the same. Unforeseen Aspects Art. 24.- Aspects not provided for in regulatory matters in these Standards, will be resolved by the Central Bank through its Standards Committee. Validity Art. 25.- These Standards will enter into force from the sixteenth of July two thousand twenty-four.

NRP-67
MARKET INSURANCE POLICIES MASSIVELY
Approval: 28/06/2024
Validity: 16/07/2024
MODIFICATIONS:
(1) Modifications in articles 6, 14, 15 and 18, approved by the Central Bank by means of its Standards Committee, in Session No. CN-05/2026, of June 30, two thousand twenty-six, with effect from July 15, two thousand twenty-six.