The National Insurance and Bonds Commission recently amended the Sole Provisions on Insurance and Bonds in order to increase legal certainty with regard to the regulatory framework that applies to actuarial, financial and investment functions.
These amendments aim to ensure that the commission has the information required to take necessary regulatory action in the event that irregularities are detected and prompt intervention is needed.
Regulatory framework for actuarial functions
The amendments have extended the obligation for parties that are responsible for an actuarial function to submit, within the first quarter of each year, a scanned copy of the annual report submitted to the board and general manager, as part of the corporate governance regulatory report (RR-2). The aim of this obligation is to enable the commission to identify the tasks and phases of work undertaken during the previous year, as well as the problems that arose and the recommendations for correcting them, including proposals for general improvement.
Public release of financial information
The requirement that insurers' and bonding companies' consolidated balance sheets and consolidated statements of income be published in the Federal Official Gazette has been removed. Now, such documents – on approval by the board of directors – must be published in a national newspaper within 45 business days from the closing of the respective financial period.
As regards the investment regulatory framework, the amendments have created a new obligation for insurers and bonding companies to submit, as part of their RR-2, their investment policy and the document that confirms its approval by the board of directors.
Further, each adjustment to the investment policy made by the board of directors must be submitted to the commission within 20 business days from being approved by the board.
The deadline to submit the RR-2 has been extended from 130 business days from the end of the respective financial year to 145 business days. As discussed above, this regulatory report must include the annual report of the party responsible for the actuarial function and the approved investment policy.
As a consequence of the above changes, the obligation to submit the parameters of the investment policy approved by the board of directors with the regulatory report on financial statements (RR-7) no longer applies, as it must now be included in the RR-2.
For further information on this topic please contact Carlos Ramos Miranda at Hogan Lovells BSTL by telephone (+52 55 5091 0000) or email ([email protected]). The Hogan Lovells website can be accessed at www.hoganlovells.com.
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