By: Claudia Aguilar
The National Banking and Insurance Commission (CNBS), within the scope of its attributions, approved Resolution SS No.2006/16-12-2010, containing the “Regulations for Reinsurance Operations and Registration of Foreign Reinsurance Companies and Reinsurance Brokers”. Its purpose is to establish the rules applicable to the supervision of reinsurance and fronting operations carried out by the Honduran Insurance System, as well as everything related to the registration, renewal, suspension and/or cancellation of reinsurance institutions and reinsurance brokers, both domestic and foreign, authorized by the CNBS.
Likewise, on December 11, 2021, the CNBS amended said regulation through the Certification of Minutes of the Extraordinary Session No. 1580 and published in the Official Gazette on December 11, 2021, proceeding to the approval of the “REGULATION ON REINSURANCE OPERATIONS, FRONTING AND REGISTRATION OF REINSURANCE INSTITUTIONS AND FOREIGN REINSURANCE BROKERS AND REINSURANCE BROKERS” (hereinafter, “The Regulation”). This Regulation amends Resolution SS No.2006/16-12-2010 which regulates insurance and reinsurance institutions established in the country, as well as foreign insurance and reinsurance institutions. The Regulation establishes that foreign reinsurance institutions must submit to the registration process in the Registry authorized by the CNBS, through their legal representative or attorney-in-fact.
This Regulation establishes the following minimum requirements for their registration:
- Legal document evidencing the power of attorney or representation, of the applicant.
- Power of attorney of the legal representatives, which identifies the sufficient faculties for the subscription of contracts and representation of the company.
- Public deed of incorporation of the company and its bylaws, issued by the competent authority of its country of origin; duly authenticated.
- Current certificate from the supervisory or regulatory authority of the country of origin, stating that the company is authorized to operate in reinsurance brokerage abroad.
- Financial statements audited by a firm of independent auditors, corresponding to the last fiscal year.
- List of its shareholders and members of the Board of Directors or its equivalent body.
- List of the reinsurance companies with which it normally carries out reinsurance operations.
- If a reinsurance broker also acts as a Lloyd’s representative agency, an authenticated copy of the contract signed by Lloyd’s must be submitted.
Article 40 of the Regulations establishes that the registration issued by the CNBS to the Foreign Reinsurers will have an indefinite duration, except in those cases in which the provisions set forth therein are not complied with. However, the same article establishes that all foreign reinsurers must update their registration annually within thirty (30) calendar days prior to its expiration.
On January 17, 2023, the CNBS, in order to promote speed in the registration and renewal procedure of the Foreign Reinsurance Companies Registry, created the Online Registry of National and Foreign Reinsurance Institutions and Reinsurance Brokers (http://registrospublicos.cnbs.gob.hn). This registry is also intended to facilitate the submission of documents to the user.
It is important to point out that the new Public Registry offers many advantages, especially for foreign reinsurers, since each user will be able to see the actual status of his application with just one click. Likewise, the files will be in an electronic file at the sight of the legal representatives of each company, having updated statistics, reducing response times and a real time and automatic update of the database for each Foreign Reinsurer.
For questions or further information on this Regulation, our insurance and reinsurance specialists are at your disposal at contact@consortiumlegal.com.