The Argentine Superintendence of Insurance has announced amendments to the reinsurance regulatory framework which will see barriers to foreign reinsurers operating in the region lift, to further open up the market to international players.
The changes will allow admitted foreign reinsurers to take on more risks, and will remove requirements for foreign reinsurers to register as permanent representation.
However, these adjustments come along with a tripling of the net worth required for admitted reinsurers’ registration with the SSN from $30 million to $100 million as well as additional new requirements, such as providing evidence of credit ratings for the past 3 years by certain international rating companies.
The requirement for foreign reinsurance companies authorized within their countries of origin to be registered with the Public Registry of Commerce in Argentina as a permanent representation was lifted.
Further updates include raising the minimum capital requirement for local re/insurers from approximately $20 million up to $22.5 million, extending deadlines to allow re/insurers more time to prove they can meet the capital requirements, and establishing an alternative restructuring plan.
For re/insurers operating in the Latin American region, these adjustments are likely to come as welcome news, opening doors to increased foreign re/insurance capital, which in turn could re-energise the market with better product offers and increased re/insurance penetration.
And in a macroeconomic environment of growing protectionism, a move in the other direction within an emerging market is a promising sign that the region will see continued industry growth however disparaging the geopolitical outlook.
