On 6 December 2013, the Colombian Ministry of Finance and Public Credit issued Decree No. 2838 of 2013 (the “Decree”), amending Decree No. 2555 of 2010, regarding the rules applicable to foreign banks and insurance companies in Colombia. The Decree sets out specific provisions for branch offices of banks and insurers operating in Colombia. Decree No. 2555 of 2010 compiled and codified into a single instrument all the regulations governing the financial, insurance and capital markets sectors in Colombia.
The Decree makes clear that branches of foreign insurers will generally be subject to the same rules as domestic insurers in Colombia, with the exception of certain special provisions specifically applicable to branches of foreign insurers, which are set out in the Decree. The main special provisions are broadly as follows:
- Shareholders’ subscribed capital must be paid up at the time of establishment of the branch of the foreign insurer.
- The capital assigned to branches of foreign insurers must be permanently backed by assets situated in Colombia.
- The local representative appointed for the foreign insurer’s branch in Colombia must be resident in Colombia and must have a deputy representative who can act when the local representative is on temporary or permanent leave.
- Major transactions including mergers, acquisitions, sales of assets, liabilities and contracts, involving, directly or indirectly, the branch office in Colombia require the prior approval of the regulator. Equally, the regulator must be informed of any other act or legal or economic circumstance which affects the operation of the branch office or which involves an amendment to the conditions under which the regulator’s authorisation to operate the branch office was granted.
The Decree can be found here and is only available in Spanish.
Edwards Wildman assists foreign insurers to comply with the regulatory requirements of operating in Colombia and Latin America.