Chile's Financial Market Commission has opened an eight-week consultation on a regulatory proposal governing life annuity reinsurance placed with foreign reinsurers, setting the conditions under which such transfers can be deducted from insurers’ technical reserves under General Rule No. 323. The draft would cap reserve deductions at 20 percent of technical reserves at the contract date and require foreign reinsurers to have an international risk rating of at least category A. It would also require the reinsurer’s home supervisor to have a memorandum of understanding with the CMF, or equivalent information-sharing measures, and mandate that assets backing the transferred obligations be held in a segregated fund managed by a CMF-supervised entity. Quantitative portfolio limits would apply to that fund, including a maximum of 30 percent in foreign securities and 5 percent in other investments, while reinsurance contracts would need early termination (recapture) clauses and insurers would have to provide detailed quarterly reporting on reinsurance transactions. Feedback can be submitted within the eight-week consultation window via the CMF’s Regulations Under Consultation section, alongside a published regulatory report summarising the proposal’s key elements.
Chile Financial Market Commission 2026-04-20
Chile's Financial Market Commission launches an eight-week consultation on prudential rules for foreign reinsurance of life annuities
The Chile Financial Market Commission has proposed regulations on life annuity reinsurance with foreign reinsurers, specifying when such transfers may be deducted from insurers’ technical reserves. The draft would cap reserve deductions at 20 percent, require foreign reinsurers to hold at least an A rating and be subject to supervisory cooperation with the Commission, mandate segregated funds with quantitative portfolio limits, require early termination clauses, and introduce detailed quarterly reporting on reinsurance transactions.