Insurance, Mexico, Hogan Lovells BSTL SC updates

Regulator determines types of loan that insurance and surety companies may issue
Hogan Lovells BSTL SC
  • Mexico
  • 29 March 2016

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. In doing so, the ministry aims to democratise access to finance, avoid imbalances, promote national economic growth and create another option for debtors to secure credit at competitive rates.

CONDUSEF issues rules on transparency, publicity and sale of insurance products
Hogan Lovells BSTL SC
  • Mexico
  • 09 February 2016

The National Commission for the Protection and Defence of Users of Financial Services (CONDUSEF) has issued general provisions to define certain activities that deviate from good practices with respect to the offer and sale of services that insurance entities provide. CONDUSEF's intention is to strengthen the protection of general public interest.

Streamlined mechanisms for insurance regularisation plans and auto-correct programmes
Hogan Lovells BSTL SC
  • Mexico
  • 26 January 2016

Given the entry into force of Solvency II requirements in Mexico, the National Insurance and Bonds Commission continues its efforts to streamline internal and external control compliance mechanisms to which insurers are subject. The relevant provisions have been modified to allow regularisation plans and auto-correct programmes to be submitted to the regulator through its website, with the aim of facilitating easier and swifter compliance.

Mexico expands efforts on mandatory car insurance
Hogan Lovells BSTL SC
  • Mexico
  • 10 November 2015

Since 2014, vehicle owners travelling on federal roads have been obliged to obtain liability insurance to cover damage caused to third parties or their property. However, insurers report that car liability insurance has not increased as expected. States are now looking into requiring liability insurance for all cars on the roads in their cities. Mexico City is the first to do so.

Insurers face new compliance issues under new law
Hogan Lovells BSTL SC
  • Mexico
  • 14 July 2015

The new Insurance and Bonding Law, which implements the Solvency II requirements in Mexico, recently came into effect alongside the new Sole Regulation on Insurance and Bonding. Among other things, insurers must now file periodic regulatory reports using certain forms and templates, which consolidate information that was previously submitted to the regulator through individual reports.

New rules on abusive clauses in insurance contracts
Hogan Lovells BSTL SC
  • Mexico
  • 24 February 2015

The National Commission for the Defence of the Rights of Financial Services Users has issued rules regarding abusive clauses contained in non-negotiable contracts used by financial institutions, including insurers. The regulator is now empowered to inspect all insurance products and – where it deems necessary – order the use of a product containing an abusive clause to be suspended.

Coverholders face new registration requirements
Hogan Lovells BSTL SC
  • Mexico
  • 11 November 2014

The National Insurance and Bonding Commission has disclosed draft sole rules for comment. One of the changes concerns coverholders appointed by registered foreign reinsurance companies. Under the proposed sole rules, Mexican underwriters will no longer agree to do business with coverholders unless there is evidence that they have been properly registered.

Mexico eliminates restrictions on foreign investment in insurance companies
Hogan Lovells BSTL SC
  • Mexico
  • 12 August 2014

Foreign investment in Mexican insurance companies has traditionally been restricted to 49% of capital stock, with certain exceptions. However, the Foreign Investment Law was recently amended to eliminate the restrictions on participation in insurance and surety companies. Foreign investors can now invest up to 100% in such companies, regardless of the investment's country of origin.

Insurers face new challenges as tax reform limits deductions for premiums
Hogan Lovells BSTL SC
  • Mexico
  • 01 April 2014

Mexico's recent tax reform may have a substantial impact on insurers, as it limits the deductibility of individuals' insurance premiums. The immediate effect will be numerous cancellations of medical insurance policies and retirement plans, which had previously incentivised long-term savings. Corporations will also face limits on the deductibility of insurance premium payments made as part of employee compensation.

Financial reform protects insureds in insurance claims
Hogan Lovells BSTL SC
  • Mexico
  • 17 December 2013

Congress recently passed a financial reform package that substantially affects the sector. Among the changes, insureds will be able to access summary or executory trials for disputes regarding insurance coverage, provided that they first secure approval from the National Commission for the Protection and Defence of the Users of Financial Services.

Compulsory car insurance for federal highways and roads
Hogan Lovells BSTL SC
  • Mexico
  • 17 September 2013

The Federal Bridges and Highways Law was recently amended to require automobiles that use federal highways to be insured with coverage for any liability for damages and injuries caused to third parties by the motor vehicle. The amended law is expected to expand automobile insurance coverage across the nation, as only a few states in Mexico have compulsory car insurance policies in their local laws.

Foreign reinsurers face stricter registration criteria
Hogan Lovells BSTL SC
  • Mexico
  • 04 June 2013

New internal criteria imposed by the Ministry of Finance and Public Credit are delaying various foreign reinsurers in securing registration or renewal with the Registry of Foreign Reinsurance Companies. While the new criteria are welcome, as they aim to ensure the strength and solvency of the reinsurance market in Mexico, they have nonetheless posed serious problems to many reinsurers.

Insurance sector faces new insurance and bonding law
Hogan Lovells BSTL SC
  • Mexico
  • 12 March 2013

Congress has passed a new insurance and bonding law. The new law is intended to strengthen the insurance and bonding system according to international best standards and practices, with special regard for corporate control and governance, capitalisation rules, reserve investment and risk management policies, among other things.

Insurers face new anti-money laundering rules
Hogan Lovells BSTL SC
  • Mexico
  • 06 November 2012

As a consequence of new regulatory guidelines, Mexican insurers will face tougher new requirements to assist in anti-money laundering activities. Insurers will need to update their internal 'know your client' policies and systems to ensure that they comply with the new requirements.

Regulator increases requirements for third-party insurance sales
Hogan Lovells BSTL SC
  • Mexico
  • 04 September 2012

The National Insurance and Bonding Commission has issued an amendment to the Uniform Insurance Ruling that will require insurers to ensure that service providers hired to sell insurance products comply with the law. Insurers are now required to request evidence from third-party vendors that they have provided proper training for their employees, and that such employees have received certification from the commission.

Legal certainty for medical expense insurance
Hogan Lovells BSTL SC
  • Mexico
  • 31 July 2012

The National Insurance and Bonding Commission has amended Section 5.1.24 of the Unified Insurance Ruling related to medical expense insurance. The amendment provides clearer guidelines for insurance companies to follow in regard to their medical expense insurance products. It expressly requires insurance companies to draft policies with clarity and legal certainty for the insured.

Insurers weigh impact of class action legislation
Hogan Lovells BSTL SC
  • Mexico
  • 29 May 2012

A package of amendment to various federal laws has given rise to the possibility of filing class actions against insurance companies. These amendments will have a material impact on the conduct of insurance companies in relation to their clients, not only in their promotion, sale and adjustment of insurance, but also in the assessment of coverage policies, as exposure will be increased significantly.

Electronic filing simplifies compliance for insurers
Hogan Lovells BSTL SC
  • Mexico
  • 14 February 2012

The Unified Insurance Circular has been amended to require insurance companies to submit statistical information about their activities electronically. The aim of the change is to facilitate delivery and improve the Insurance Commission's access to the information submitted by insurance companies for compliance and surveillance purposes.

Foreign reinsurers face new tax domicile requirement
Hogan Lovells BSTL SC
  • Mexico
  • 16 August 2011

In order to undertake reinsurance and rebonding activities in Mexico, foreign reinsurers must demonstrate a satisfactory credit rating and agree to be bound by Mexican law in respect of transactions that are entered into in Mexico or have effects there. However, if the reinsurer is resident in a jurisdiction with which Mexico has a double tax treaty, it must also provide evidence of tax domicile.

Beware restrictions on commission payments
Hogan Lovells BSTL SC
  • Mexico
  • 24 May 2011

It is often said that an insurer's most important 'clients' are not its insureds, but insurance agents - an insurer may offer the best product, but it will not be sold unless the agents like it. Commission is paid in various ways, with some insurers being willing to pay commission in advance. However, Mexican law prevents insurers from paying agents for the sale of products before they are sold and paid for.

Current search