1. on Insurance Regulation and Supervision in Latin America
IV Conference on Insurance Regulation and Supervision in Latin America
Comparative Study
on Insurance Regulation and Supervision in Latin America
9 May 2003
Punta Cana, Dominican Republic
Yasumasa Tahara
Directorate for Financial, Fiscal and Enterprise Affairs, OECD

2. What is this comparative study?
Oaxaca Conference in 2000
16 Particularities
What we are doing now?
Update/Verification and New Issues
Some Findings
Asking for Your Co-operation

3. I. What is Comparative Study?
First OECD/IAIS/ASSAL Conference on Insurance Regulation and Supervision in Latin America, September 2000, Oaxaca, Mexico
Survey covered 18 Latin-American Countries participated in the Oaxaca Conference
16 Particularities identified

4. II. 16 Particularities
Supervisory Authority Specialising in Insurance Supervision or Financial Supervision including Insurance
Admissibility of Composite Insurers
Non-necessity of Business Plan for Licensing
Restrictions on Market Access
High Periodicity of Reporting
European Type of Solvency Requirements

5. II. 16 Particularities (Continued)
Non-adoption of Prudent-man Rules
Restrictions on Portfolio Investment Abroad
High Proportional Weight of Other Investments
Maximum Retention Limit
Registration System for Foreign Reinsurance Companies
Internal Auditor

6. II. 16 Particularities (Continued)
Non-existence of Policyholders’ Protection Funds
Relatively High Number of Insurance Companies in Financial Difficulties
Non-existence of Compulsory Motor Insurance
Non-existence of Self-regulatory Functions of Insurance Industry Associations

7. III. Revising Comparative Study
From Last Year
Updates and Verifications
Business Plan / Accounting Principles
New Issues to be handled
Consolidated Supervision / Corporate Governance / Systemic Risks

8. IV. Some Findings 1. Supervisory Structure (1st Particularity)
Ministry’s Roles in Supervision
No Role Reported in 2000.
Several Countries Have Reported Their Supervisory Roles.
Co-ordination among Supervisory Authorities
Consolidated Supervision Required in 4 Countries.
For Co-ordination, Committee Structure Adopted in 6 Countries.

9. VI. Some Findings 2. Specialisation (2nd Particularity)
Composite Insurance Companies
New establishment prohibited in 2 more countries.
Cross-Distribution of Banking and Insurance Products
Most countries prohibit;
insurance companies to produce or distribute banking products.
banks to produce insurance products.
Many countries allow banks to distribute insurance products.

10. VI. Some Findings 3. Corporate Governance and Internal Control
Many countries report there is no explicit legal provisions regarding corporate governance.
Some countries (Mexico, Peru and Venezuela) have regulations on the functions and responsibilities of governing body.
Structure and Duty of the Board of Directors / Compliance Officer
About a half of the countries report their regulations on internal control, another half report no regulation exists.
Implementation of Internal Control System / Internal Audit Unit / Assessment of Internal Control

11. VI. Some Findings 4. Business Plan (3rd Particularity)
Only 6 Countries Reported Positively in 2000 Study.
Definition
Description of the kinds of risks the company proposes to cover
Reinsurance plan
Estimated setting-up costs and financial means
Feasibility Study
11 Countries Have Already Responded Positively.

12. VI. Some Findings 5. Accounting Principles
10 countries with their own GAAP
2 countries report their GAAP generally follow the IAS
9 countries with the IAS
Honduras from 1997
El Salvador from 2000
Guatemala from 2002
14 countries with statutory accounting principles

13. V. Schedule and Requests
Please register contact person to or fax: by the end of next week (May 16th).
Tables (Should be Prioritised): Please check the figures and description in the table and send it to us by the end of May. The earlier, the better.
Draft text: Please check the draft text and give us comments by the end of May.
As for the countries we need to ask additional information, please send us the answers as soon as possible.

14. Thank you for your co-operation