New reinsurance regulations define how to act as an admitted insurer
Registration with insurance regulator Registration with representative office Tax treatment Under recent regulations issued by the insurance regulator, in order to act as an 'admitted insurer' on an exceptional basis, foreign reinsurers must be registered with the local insurance regulator and establish either a branch or a representative office in Argentina. Insurers must also register the branch or representative office with the local corporate authorities.
Registration with insurance regulator
The requirements for obtaining registration, as imposed by the new regulations, include:
Registration of representative office
Establishing a representative office for the foreign reinsurer may be a better course of action, since the local vehicle will:
In accordance with the Corporations Law (19,550), the corporation (ie, the foreign reinsurer) must file certain documents in order to register a representative office in Argentina with the Office of Corporations (Public Registry of Commerce) of the City of Buenos Aires.
In addition to those requirements, the public registry has issued General Resolution IGJ 7/2005, requiring certain information, including:
In order to operate from abroad with the limited authority or capacity set out above, the admitted foreign reinsurer need not meet the minimum capital requirements imposed on a local reinsurer under Insurance Regulator Resolution 35.615/11. In order for admitted insurers to comply with minimum capital requirements, it is sufficient to submit the certificate from the company's external auditor indicating that it has a net worth in excess of $30 million.
Certain issues regarding income tax, value added tax, turnover tax and tax on deemed minimum income must be considered when incorporating a representative office.
For further information on this topic please contact Martín G. Argañaraz Luque