After a transition period of two years, the new Insurance and Surety Institutions Law (Ley de Instituciones de Seguros y Fianzas) (the \u201cLISF\u201d) will enter into force on April 4, 2015. The most important objective of the LISF is to implement the Solvency II framework in Mexico.<\/p>\n
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.<\/p>\n
Cross Border Life Insurance<\/strong><\/p>\n The new LISF contemplates a new broader restriction applicable to non-Mexican insurers selling life insurance in Mexico.<\/p>\n Currently, the insurance law prohibits the sale of life insurance policies in Mexico when underwritten by an insurer that is not licensed in Mexico, when the assured is present in Mexico at the time the insurance contract is entered into. Accordingly, under the law currently in force, it is possible for Mexican and non-Mexican individuals and entities to contract life insurance abroad without contravening said prohibition, provided that the assured is not physically present in Mexico at the time the insurance is contracted (i.e., in most cases, at the time of issuance of the policy).<\/p>\n Under the new LISF, in addition to the restriction described above, a legal entity that purchases life insurance for an individual that is a resident of Mexico may only do so from a Mexican licensed insurer. In other words, a non-Mexican insurer that sells life insurance to a legal entity that obtains such cover on the life of an individual that is a resident of Mexico at the time of contracting of the insurance would be in violation of the LISF; the entity contracting the insurance would also be in violation.<\/p>\n Accordingly, variable universal life insurance policies as private placement life insurance could be unlawful under the new framework contemplated by the LISF if contracted abroad by either Mexican or foreign legal entities when the life insured is that of a Mexican resident.<\/p>\n Violations to the prohibitions applicable to the cross-border sale of insurance entail harsh fines that may affect the insurer, the assured, and brokers involved as well as the risk of criminal prosecution of whoever offers and places such insurance.<\/p>\n Creel, Garc\u00eda-Cu\u00e9llar, Aiza y Enr\u00edquez, S.C. is committed to being a strategic service provider to its international and domestic clients, and continues its tradition of providing high-quality, expert and responsive legal advice across various fields of law in Mexico, including M&A, banking and finance, real estate, competition law, energy, infrastructure, intellectual property, employment law, tax law, environmental law, insurance and reinsurance, transportation and telecommunications law.<\/p>\n Mexico City, on February 27, 2015<\/p>\n","protected":false},"excerpt":{"rendered":" After a transition period of two years, the new Insurance and Surety Institutions Law (Ley de Instituciones de Seguros y Fianzas) (the \u201cLISF\u201d) will enter into force on April 4, 2015. The most important objective of the LISF is to implement the Solvency II framework in Mexico.<\/p>\n","protected":false},"featured_media":0,"template":"","cltvo_categoria_tax":[83],"tipo_publicacion_taxonomy":[179],"class_list":["post-8948","cltvo_publicaciones","type-cltvo_publicaciones","status-publish","hentry","cltvo_categoria_tax-insurance-and-reinsurance","tipo_publicacion_taxonomy-client-alerts"],"acf":[],"yoast_head":"\n