Article by Mr M. Millett - Edwards
Angell Palmer & Dodge LLP
A special assembly dominated by members of President Rafael
Correa's Alianza PAIS party recently approved a
proposed new Ecuadorian constitution that would grant the
president broad political and economic powers. The proposed new
constitution now faces a national public vote scheduled for
September 28, 2008.
If passed, which seems likely given President Correa's
landslide victory in 2007 and current popularity, the new
constitution would grant President Correa the power to remove
Congress, seek re-election for additional terms and control
monetary policy. While critics questioned the concentration of
power, supporters reportedly welcomed the vote with chants of
"We don't want . . . to be a North American
Under the new constitution, the regulatory powers of the
heretofore independent Central Bank would be vested in
President Correa. Seen as an important source of economic
stability to date, the Central bank establishes interest rates
and controls the release of U.S. dollars into the dollar-based
Ecuadorian economy. Critics' concern that President
Correa's political interests might interfere with sound
monetary policy is heightened by his prior intervention in the
Ecuadorian oil and mining industries, which contributed to a 34
percent decline in direct foreign investment in 2007.
Any significant changes in Ecuadorian monetary policy would
likely have negative ramifications for the more than 150
foreign insurance and reinsurance companies with operations
and/or affiliates in Ecuador. For a copy of the Ecuadorian
regulations governing the registration of foreign reinsurers,
please click here. For copies of the Ecuadorian statutes
governing insurance and reinsurance,
please click here,
If you would be interested in learning more about the
Ecuadorian or other Latin American (re)insurance markets and/or
regulatory environments, please click the "Ask the
firm/author a question " button and provide your contact
information for follow-up by an EAPD attorney.
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