Panama: More Risk Control for Insurers

Insurers must make separate analysis for each insurance categories and when the results are deficient, they should have reserves.

Tuesday, September 27, 2016

Agreement 4 approved in April by the Superintendent of Insurance of Panama adds that when the results are deficit for two consecutive years, "... in addition to the reserve an analysis must be submitted to the regulator of the causes of the deficiency and a plan to correct itOnce the category has positive results again, the reserve can be released and the company can make use of it."

See: Agreement 3 and Agreement 4 (In Spanish)

 The Superintendent of Insurance and Reinsurance, José Joaquín Riesen, told that "... the intention is not the constitution of reserves, but to correct underlying problems when there is a product that is not profitable. 'What we're trying to avoid is selling under price because that could lead to bankruptcy. We are applying international standards and learning from experiences in recent cases' he said, referring to recent situations of the companies Seguros Constitución and Seguros Confianza."

"...For its part, Agreement 3 "through which the rules for registration of technical notes and model policies is developed" introduces new technical notes to be submitted by insurers to the regulator when they release a new product or renew any of the existing ones. Riesen said the model used currently is between 25 and 30 years old. "Now we have a basis for the latest technical note with more information for all new products," he said."

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