New Insurance and Surety Institutions Law

After a transition period of two years, the new Insurance and Surety Institutions Law (Ley de Instituciones de Seguros y Fianzas) (the “LISF”) will enter into force on April 4, 2015. The most important objective of the LISF is to implement the Solvency II framework in Mexico.

Over the next 12 months, our Firm will be sharing with our clients and friends 12 monthly updates on relevant aspects of the insurance and surety legislation that will change as a result of the legal reform.

The Unified Insurance and Surety Regulations (Circular Unica de Seguros y Fianzas) (“CUSF”), detail the principles and requirements contained in the LISF. The CUSF was published on December 19, 2014 and is also scheduled to become effective on April 4, 2015. Pursuant to their transitory provisions, the CUSF set forth a further transition period for Pillars 1 and 3 of Solvency II framework which will become effective as a result of such legal reform; namely, the provisions of the LISF and CUSF relating to quantitative and disclosure requirements are postponed until January 1, 2016.

Such postponement, however, is not extensive to Pillar 2 of Solvency II framework which implements the new corporate governance framework that will be applicable to Mexican insurance and surety institutions.