Another door into South America

The process involves a phased reduction of the local market reserve by annually increasing the percentage of ceded premiums local insurers are permitted to place directly with Admitted Reinsurers. This year the limit is 10% and, via a stepped increase, the limit will be 80% by 01 July 2024. The remaining share of the market can only be placed with local reinsurers; however local reinsurers may retrocede the risks to Admitted Reinsurers.

For risks exceeding US$50m, the stepped annual increase does not apply and the entirety of the risks may be placed immediately with Admitted Reinsurers.

This reduction of barriers prohibiting local insurers from placing risks directly with foreign reinsurers follows a similar framework in Brazil which will see the allowed percentage of ceded premiums to Admitted Reinsurers increase to a 75% limit from 01 January 2020.

The Resolution triggering the Argentine process can be found here (in Spanish).