Argentina: Appointment of Collection Agents
The premium payment process relating to Argentinean risks where local reinsurance brokers are involved has recently been formalised. Lloyd’s managing agents and Lloyd’s brokers must ensure that appropriate wordings are used.
Superintendencia de Seguros de la Nacion (SSN), the Argentinean regulator, introduced SSN Resolution No. 38,595/2014 in September 2014; this resolution enables cross-border reinsurance brokers to make premium payments to foreign reinsurers which would otherwise be prohibited by Argentinean foreign exchange regulations.
The resolution requires an appointed non-resident Collection Agent to be involved when risk and premium are transferred abroad via a local reinsurance broker (ie reinsurance and retrocession to reinsurers located outside Argentina) that is also involved in the organisation and/or management of premium payments.
The (retro)cedant is able to comply with the abovementioned Argentinean foreign exchange regulations by either transferring the premium directly to the Lloyd’s broker abroad or, alternatively, through the appointment of a non-resident Collection Agent to be involved in the premium payment chain. In cases where no local reinsurance broker is involved in the organisation and/or management of premium payments and the (retro)cedant transfers the amount to the Lloyd’s broker abroad directly, the appointment of a Collection Agent will not be required.
For all other cases (ie where local brokers are involved in the premium payment process), the procedure for the appointment of Collection Agents for Lloyd’s placements is an established and lived by market practice. There are two options available to comply with the requirements set out in SSN Resolution No. 38,595/2014, both of which involve a submission to the regulator) via Lloyd’s local attorney-in-fact.
In cooperation with Acrea (Association of reinsurance brokers in Argentina) and SSN, the appointment process has now been formalised and communicated to the market via Market Bulletin Y4952. The agreed wordings for the appointment of a collection agent – LSW1868 and LSW1868-14; LSW1869 and LSW1869-14 – have been uploaded onto the Lloyd’s Wordings Repository.
Managing agents in London are not required to take any immediate action as local brokers in Argentina are well aware of the options and process accepted by the SSN. However, it is advised that managing agents and Lloyd’s brokers ensure that the wordings provided in Market Bulletin Y4952 and the Lloyd’s Wordings Repository are being used. It is the Admitted Reinsurer’s obligation to comply with the requirements set out in Resolution SSN No. 38.595/2014.