Argentina’s insurance Superintendency, the SSN, recently issued a resolution prohibiting local insurance companies from maintaining any investments abroad.

Resolution 36,162, which was issued at the end of October, withdraws the allowance for local insurance companies to hold up to 50% of their investments and funds abroad. The SSN has already ordered local insurers to file an affidavit with details of all foreign investments and the resolution gives 50 calendar days (ending on December 24, 2011) for insurance companies to demonstrate to the SSN that they have repatriated all their foreign funds and investments into Argentina.

All funds and investments must then be located in Argentina, from financial statements ending on December 31, 2011 onwards. However, the SSN has discretion to grant temporary exemptions on a case-by-case basis. These temporary exceptions will only be granted where there are no equivalent financial instruments in the local market or when there is evidence that conforming with the resolution will cause clear prejudice to the company.

For reinsurers, the resolution stipulates that investments and funds held abroad must not exceed 50% of the company’s capital.