Venezuela’s socialist government has ordered the takeover of Seguros Federal, a local insurance company that was part of a financial group under investigation for reported insolvency issues. 

The decree issued in Official Gazette No. 39,580 on December 23, 2010, provided for the “forced acquisition” of all of Seguros Federal’s assets. The assets will be used by the government to build its Socialist System of Insurance Activity which aims to provide insurance products to the poorest sectors of society. 

Seguros Federal was part of the Grupo Federal financial group. Banco Federal, which was in the same group, was taken over by the government in June because of solvency concerns. At the end of June 2010, Seguros Federal had a 1% share of the Venezuelan insurance market, writing premiums of 170 million bolivares (USD 39.6 million) in the first half of the year, although its share slipped to 0.7% by the end of October, according to figures from the Venezuelan insurance regulator. 

Earlier in 2010, the government expropriated another insurance company, Seguros La Previsora, as reported here in our blog. 

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