For Better or for Worse. How Covid changed the (re)Insurance Regulatory framework in Latin America and the Caribbean (LAC)

The Covid 19 pandemic has brought upon many changes in almost all industries around the globe.  The insurance sector has been no exception to the pandemic’s impact.  It has had to adjust rapidly to the ever evolving activities it covers.  Regulators around the world have responded to this situation by trying to adapt their regulatory requirements and practices to this “new reality”.  LAC region is no exception. 

As with the rest of the world, the LAC insurance sector has been greatly affected by this unprecedented situation. As a region that was already going through many political and social challenges, the pandemic really emphasized the need to accelerate changes in legislation as well as business practices. On a brighter note, it has forced local regulators to create new and innovative ways of communication and technology in business and public regulation and has stimulated changes in regulatory frameworks around the region. These improvements are rapidly leading to a more progressive and open market region.

Amongst the most apparent regulatory changes in the LAC region are those regarding updates in licensing processes for admitted and non-admitted (re) insurers and (re) insurance brokers. In this aspect, most of the jurisdictions in LAC that require non-admitted (re) insurers and (re) insurance brokers to register locally have been progressively updating their licensing and registration systems to allow digitally signed and legalized documents to be submitted as well as implementing contactless and paperless filings (Argentina, Brazil, Dominican Republic, Guatemala, Honduras and Peru).

The pandemic-related massive delays in registry and renewal processes that happened and are still happening within most of the LAC regulators, as well as the safety protocols like social distancing and work-from-home measures, have been progressively and forcibly leading regulators to the implementation and acceptance of digital signatures and digital filings. The downside of this has been that the interaction with the regulators’ officers is now more limited which makes the follow ups and further clarifications required from time to time more cumbersome.

Consequently, the adjustment to the pandemic procedures also led many regulators to create new or modify existing regulations to adapt to the complex situation. In this sense, many of the countries in the region issued laws to “soften” deadlines and grant validity extensions in licenses. Such is the case of  Ecuador, where the Superintendence of Securities and Insurance Companies (Superintendencia de Compañías, Valores y Seguros) issued several resolutions, like the Circular No. SCVS-INS-2021-00039563-OC to extend the validity term of registration of foreign reinsurance companies and intermediaries due to the coronavirus pandemic. This law extended the validity term of registration in Ecuador to more than 90 days after the expiry of the foreign reinsurers and intermediaries registration. Furthermore, it added that the registrations expiring on September 2021, and that needed to be extended, should provide a written notification to keep the registration valid, within 60 days of the registration expiry date.

Other changes in the regulatory framework in the region are also related to the innovation of licensing processes and the creation of central Information Systems and electronic platforms for insurance regulatory processes. One such example is seen in Peru, where the Superintendence of Banking, Insurance and AFP (Superintendencia de Banca, Seguros y AFP-SBS), implemented measures[1] to create a central information system under insurance law. The measure aims to obtain detailed information on contracting parties, the supervision of insurers, and the promotion of transparency of information.

Correspondingly, in Costa Rica, the General Insurance Superintendence-SUGESE has established specific coronavirus claim reporting requirements to monitor the pandemic’s effect on the insurance sector[2]and introduced regulations on inclusion and access to insurance by the use of mobile apps with the intent to simplify self-issuance insurance policies and products to make it more accessible to the general population.

Besides from the above mentioned changes in licensing and implementation of innovative communication systems within the insurance regulators in the region, there have been other important changes in other regulatory areas as well. These changes are aimed at opening LAC markets for foreign (re)insurers through the issuance of open-market related laws.

One such example is Brazil, who’s National Council of Private Insurance (CNSP) recently issued Resolution 407/2021 which establishes general principles and characteristics for the drafting and commercialization of large-risks Damage Insurance policies, promoting more freedom for negotiation of contractual conditions in these types of large-risks insurance contracts between insurers and policyholders or their legal representatives. This resolution supports the modernization and restructuring process of the Brazilian insurance market which is trending to reduce bureaucracy and protect commercial freedom and the free exercise of economic activity established via Law No. 13,874/2019 (Economic Freedom Law). Resolution 407/2021 brings innovation to the Brazilian Insurance market, recognizing the importance and specificities of the large-risks sector.

On their side, Bolivia issued a law[3] stipulating the imposition of additional tax on the profits of (re)insurers regulated by the ‘Authority of Supervision and Control for Pension and Insurance’-APS. The Law stipulates that the (re)insurance companies whose return on equity index is higher than 6%, will be imposed with an additional tax of 25% on their taxable profits.

With their recent change in government in August 2020, the Dominican Republic has also been on a quest to update and improve their Insurance regulations and regulatory rules promoting a more regulated system for the licencing, admission and monitoring of admitted and non-admitted insurers, reinsurers and intermediaries. The new appointed Superintendent of Insurance, in view of a need to upgrade and toughen up the insurance monitoring systems and licensing of (re) insurance entities, has been issuing new resolutions requiring further documents and requirements for the registration and renewals of admitted and non-admitted reinsurers and intermediaries requesting for additional documents and information such as bank statement certificates, certificates of incorporation, passport identification and full ID of the principal shareholders or directors of the company, among others[4].

The Caribbean is not out of the “post-covid changes” bandwagon. In Jamaica for example, the Financial Services Commission (FSC) announced the implementation of certain reforms to the insurance regulatory framework due to the coronavirus pandemic[5]. The FSC aims to improve the supervision of the insurance sector to ensure transparency and stability of its operations. Amongst the key reforms established are the improvement of monitoring of the insurance sector by increasing the number of reporting cycles to monitor the company’s cashflows, credit risk developments, and requirements for stress testing of pandemic effects and the improvement of notification requirement regarding payment of dividends to allow for an appropriate regulatory response.

In Trinidad and Tobago, the Central Bank of the country issued the Insurance (Amendment) Act of 2020 (which incorporates the Insurance Act of 2018) and became law effective Jan. 1, 2021. The Act aims to protect the interests of policyholders, strengthen corporate governance, raise the standards of professionalism within the industry, and improve accountability. Key elements addressed by the 2020 Act include capitalization, corporate governance, internal controls and regulatory oversight.

The Cayman Islands also recently established their ‘Cayman International Reinsurance Companies Association (CIRCA)’ for the development of the reinsurance industry in the Cayman Islands. The CIRCA is aimed at providing peer interaction, advocacy, and guidance on topics related to the reinsurance regulatory and business environment[6]. Complementary to the above, the Monetary Authority of this jurisdiction (CIMA) issued a supervisory circular[7] providing guidance for (re) insurers to minimize the license processing time. The applicants are required to provide all the documents and information provided in the regulations issued by the authority along with the prescribed fees. Among the required documents by the CIMA, applicants shall provide a business plan of the company, evidence that the company will be managed by a sufficient number of directors and senior managers who are fit and proper, proof of sufficient financial resources adequate for the nature and scale of business applied for and proof of a comprehensive risk management policy, internal control and information technology governance.

As the LAC region continues to manage the adverse economic effects resulting from the coronavirus pandemic and the political and social commotion and prepares for what lies ahead, it is trending in the right direction in terms of innovation and progress in the insurance business sector. Far from being a lost year for the LAC (re)insurance sector, the pandemic situation is providing opportunities in the region for reflection. It is pushing the industry towards innovatively carving out new future niches for itself. The accelerated trajectory for new product development, regulatory modernization and optimism for growth will continue far beyond the pandemic and into the future years.

This article was co-authored by Veronica Moreno, Miami LAC hub team member.



[1] Circular No. S-671-2020: Central de Información Vida Ley ( ) 1 September, 2020

[2] Acuerdo SUGESE 12-21- Reglamento sobre remisión de información periódica y revelación de hechos relevantes  por entidades supervisadas por SUGESE 23 April 2021

[3] On January 1, 2021, the Law No. 1356




[7] On June 28, 2021