Superintendency of Banking Insurance and Private Pension Fund Administrators of Peru launches draft rules for parametric insurance with comments open until 24 June

The Superintendency of Banking, Insurance and Private Pension Fund Administrators of Peru has published a draft regulation for the offering of parametric insurance in Peru. The proposal would set the framework for policies covering natural events through objective physical triggers, so that payment is activated when a predefined parameter is reached or exceeded rather than after verification of physical damage or a loss adjustment. The draft defines core features of these products, including parameters, thresholds, data agencies, and, where needed, a verifier and calculation agent. It would also formalize the conditions under which a product may be described as parametric insurance and require that this be stated in the product name. Parameters would need to be supported by independent sources, standardized methodologies and a clear correlation with the insured risk. For insurers, the proposal sets responsibilities to ensure the suitability and independence of the data verifier and calculation agent, document methodologies, justify selected data sources, maintain technology for continuous monitoring, put in place mechanisms for timely payment, and notify the claim once the trigger has been activated. It also calls for clearer disclosure through a product guide provided with the insurance application and training for staff and distributors. The draft is open for industry and public comments until 24 June.