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11 November 2014
On April 5 2015 the new Law of Insurance and Surety Companies will enter into force. In anticipation, the National Insurance and Bonding Commission may soon issue new sole insurance rules, which will implement the new law and further regulate insurance activities. The rules are also expected to provide additional certainty to the text and interpretation of the law.
In recent months the commission has disclosed draft sole rules for comment from the insurance sector. One of the changes included in the rules concerns coverholders that are appointed by registered foreign reinsurers. The existing regulation – the Rules for the General Register of Foreign Reinsurance Companies to Undertake Reinsurance and Re-bonding in the Country – provides that foreign reinsurers may inform the Ministry of Finance and Public Credit of the appointment of coverholders. Foreign reinsurers must provide information not only on the appointment, but also on:
On receiving such information, the Ministry of Finance will inform the commission, which will then take note of coverholder appointments. The commission also keeps a public record of appointed coverholders. There are less than two dozen registered coverholders in Mexico.
Under the proposed sole rules, foreign reinsurers will no longer have the option to submit such information, but will be obliged to do so. Mexican underwriters will no longer agree to do business with coverholders unless there is evidence that they have been properly registered. Thus, foreign reinsurers which take early action to ensure that their appointed coverholders have been registered will have an advantage on the market.
For further information on this topic please contact Carlos Ramos Miranda at Hogan Lovells BSTL SC by telephone (+52 55 5091 0000), fax (+52 55 5091 0123) or email (email@example.com). The Hogan Lovells BSTL SC website can be accessed at www.hoganlovells.com.
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