Argentina: Regulator enhances liberalisation reforms
Changes to the Argentine regulatory framework will permit Admitted Reinsurers to underwrite a greater share of risks in the local insurance market.
The Argentine regulator, the Superintendencia de Seguros de la Nación (“SSN”), has published Resolution 40422/2017 which broadens the scope of market access for Admitted Reinsurers and enhances the pace of liberalisation. In particular, the following changes have been made:
- Placements directly with Admitted Reinsurers – From 1 July 2017, Argentine insurers will be able to place up to 50% of their premiums with Admitted Reinsurers - compared to only 10% previously. The percentage will be increased to 60% on 1 July 2018 and 75% on 1 July 2019.
- Exception – The threshold for exceptions to the above limitation has also been lowered from USD 50m to USD 35m, allowing individual risks over USD 35m to be placed in their entirety with Admitted Reinsurers. Additionally, catastrophe reinsurance agreements exceeding the threshold also qualify for this exception.
- Intragroup retrocessions – Finally, the SSN has increased the percentage of business permitted to be retroceded between Local Reinsurers and Admitted Reinsurers in the same corporate group from 40% to 75% of aggregate premiums in a fiscal year.
The reforms reflect international appetite for improved access to emerging markets in Latin America and extend the scope of previous liberalisation reforms. Lloyd’s has published a Market Bulletin Y5103 with further detail on the scope and background of the changes.