Costa Rica: Insurers Can Not Sell Bonds

Insurers are limited to selling insurance policies and are not allowed to sell commercial bonds.  

Thursday, December 11, 2014

After the Insurance Superintendence requested clarification on whether or not insurers were authorized to sell bonds, the Attorney General's Office concluded that "... insurance companies should be limited to its insurance business, therefore they are not allowed to sell commercial bonds. "

The resolution says that "... in the absence of a guarantee for insurers to perform non-insurance activities, these entities must be subject to the specialty of law, making sure that everything that is issued must be filed with the Superintendent of insurance. "

Elfinancierocr.com reports that "... The document states that the term "bond" in Articles 5 and 8 of Act 40 refers to the role of surety guarantor." ... from these paragraphs, it can not be inferred that authorization has been given to issue guarantees which do not technically constitute insurance policies. Specifically, commercial bonds. "



More on this topic

Costa Rica: The Surity Bond Market

December 2014

Insurers have started to issue these policies which compete with bank share and performance guarantees.

The National Insurance Institute (INS) and Oceánica Seguros are the two companies which have been offering such policies since this year. Meanwhile, the company ASSA will start to offer them in in 2015 and Mapre is still adjusting its offers with a view to supplying them in the future.

Increase in Sales of Health Insurance in Costa Rica

November 2014

Between January and September revenue from sales of these policies increased by 74% compared to the same period in 2013, with the sale of group insurance policies to companies being the factor driving the growth.

According to data from the Superintendent of Insurance, in January-September, the sector as a whole has accumulated $116 million in premiums for such policies.

Another Insurer in Costa Rica

July 2012

Oceánica de Seguros, founded on Venezuelan capital, is the tenth insurance company to be incorporated into the Costa Rican market after its de-monopolization in 2008.

The superintendent of insurance, Javier Cascante, said the company, which is the eleventh to join the insurance market after its opening, will have a joint operating license, for personal and general policies.

Limitations of Insurance Privatisation in Costa Rica

May 2012

The total exclusivity requirement imposed by the National Institute of Insurance on agencies who sell their insurance, is an anticompetitive mechanism that is making it difficult for the market to open up.

In his blog " Mercado Seguro " in Elfinancierocr.com, attorney and insurance specialist Said Breedy analyzes the criteria issued by the Commission to Promote Competition (COPROCOM) on the exclusivity clause in agency contracts with the National Institute Insurance (INS) in place since 2007.

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