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The Superintendent of Insurance prohibited the payment
outside Argentina of claims and surrender values of life insurance
policies with foreign savings.
Through Resolution 36,746, of May 4, 2012, the Superintendent of
Insurance (the "SSN", after its acronym in Spanish)
prohibited the payment outside Argentina of claims and surrender
values of life insurance policies with foreign savings. This new
resolution complements a series of regulations that restrict the
right of insurers to pay claims abroad almost entirely.
The new resolution of the SSN is consistent with the
insurers' obligation to repatriate all their investments and
funds established in late 2011 (see Insurance News 7
"Changes in the Investment Regime for
Insurers" and Insurance News 8
"Repatriation of Investments and Funds: Insurers Are
Exempted from the Mandatory Reserve
Requirement"), and the ban on
maintaining investments and funds abroad (article 2 SSN Resolution
36162). The compulsory repatriation affected, among others, life
insurance policies with savings abroad. In accordance with
Resolution 36,746, policyholders and beneficiaries of these
policies cannot collect claims or surrender values outside
Argentina.
Despite the new restrictions introduced by Resolution 36,746
affecting life policies with savings abroad, it was already
practically impossible in most cases for insurers to pay claims
outside Argentina under most types of policies.
Moreover, insurers cannot maintain funds abroad (article 2
Resolution 36162). Consequently, in principle insurers may only
keep in Argentina the funds necessary to meet their obligations to
policyholders. Under these conditions, the applicable exchange
regulations do not enable an insurer to access the Argentine Single
Free Foreign Exchange Market (Mercado Unico y Libre de
Cambios, or "MULC") to obtain foreign currency to
pay Argentine residents. Insurers would only be entitled to access
the MULC if the beneficiary or insured were a foreign resident
(Code 620, Communication "A" 4525 BCRA), provided such
foreign resident did not seek to collect a benefit or surrender
value under a life insurance policy with savings, in which case the
prohibition of Resolution 36,746 would apply.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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As the G-20 grapple with how to change the global legal framework for financial services to ensure that there are no future financial crises, some countries have moved to quickly modernize their laws to accommodate the insurance needs of consumers and the business opportunities afforded thereby.
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