The Ministry of Finance and Public Credit recently issued general provisions which specify the types of loan that insurance and surety companies may issue to third parties, based on Articles 126 and 152 of the Insurance and Surety Companies Law.
The regulator specifically allows insurance and surety companies to issue the following types of loan:
- loans to individuals, if the loan proceeds are destined for the acquisition, construction, renovation or improvement of housing in Mexico, where the real estate serves as mortgage or is placed in trust to guarantee the loan;
- commercial loans to businesses, where the loans are guaranteed with securities, real estate or assets bought with the loan proceeds;
- loans to the insurance or surety company's own employees or retirees, where the loans are guaranteed with assets bought with the loan proceeds; and
- loans to their insureds, where the loan is guaranteed with risk reserves in the case of life insurance with a term longer than one year.
In accordance with the National Development Plan, the aim of the Ministry of Finance in defining the types of credit and loan that insurance and surety companies may issue is to democratise access to finance, avoid imbalances, promote national economic growth and create another option for debtors to secure credit at competitive rates.
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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