Insurance

Insurance
The insurance sector of the Dominican Republic has become one of the strongest in the national economy. In recent years, this sector has experienced sustained growth. Since 1998, insurance companies have quadrupled their operations, registering in 1998 a volume of operations of RD $ 3,879 million and ending 2002 with RD $ 7,971 million. For 2003 the growth rate of the sector amounted to 16%, having registered a volume of operations of RD $ 9,252 million.

In the years 2004-2007, favorable economic conditions allowed insurers to overcome the negative effects of the economic crisis of 2003 that led to the bankruptcy of several of the country's leading insurers (Special Report of the Dominican Republic Insurance Review and Fitch Perspectives Ratings).

By August 2004, the sector was made up of 25 insurance companies, of which 3 are foreign, and 4 reinsurance companies. For the year 2009, the sector consisted of 32 insurers, one less than in the previous period. There is a high level of concentration of 6 companies - Banreservas, Mapfre, Universal, Proseguros, Constitución and La Colonial, which represents 85% of the total in terms of premiums that year (Special Report Insurance Dominican Republic Review and Outlook, Fitch Ratings ).

Regulatory Organ

The Superintendency of Insurance of the Dominican Republic (www.superseguro.gov.do), a dependency of the Ministry of Finance (www.finanzas.gov.do), is in charge of the administration and application of the legal regime of companies insurers and reinsurers in the country.

Legal framework

Law No. 146-02 governs all insurance, reinsurance and surety transactions carried out in the Dominican Republic.

Insurance Contracts

The insurance and bond agreements and the endorsements and renewal thereof must be subscribed in the Dominican Republic, directly or through intermediaries with insurers authorized to operate in the national territory. The formats of insurance contracts and bonds must be approved by the Superintendency of Insurance of the Dominican Republic (www.superseguro.gov.do) and contain all the statements established by law.

Ramos de Seguros

Law No. 146-02 classifies insurance lines in which insurers and reinsurers can operate in:

Insurance of people:
Individual life
Collective life
Personal accidents
Disability
Annuity
Health
Other people insurance
General securities:
Fire and allied lines, including consequential losses Included within the expression allied lines:
Earthquake and / or earthquake
Hurricane, cyclone, tornado and windsock
Flood and / or sea flush
Mutiny, strike and malicious damage
Explosion
Damages by aircraft and land vehicles
Damage caused by smoke
Theft with escalation and / or violence
Accidental water damage
Collapse of pallets
Collapse and / or collapse of structures
Removal of debris
Sea ships
Aircraft
Marine transport
Motor vehicles and civil liability derived from said vehicles
Agricultural and livestock
General civil liability
Technical branches
Other insurances not included in the segment of people insurance, pension and retirement plans or bonds
Finance
Fidelity
Bail bonds in compliance
Other types of bonds not previously described
Motor Vehicle Insurance

Law No. 146-02 requires that any natural or legal person whose civil liability may be compromised by reason of material, corporal or moral damages derived from the latter, caused to a third party by an accident caused by a motor vehicle or trailer, It is obliged to keep it insured as a condition to allow the circulation of said vehicle, under a policy that guarantees the aforementioned responsibility.

Operation Requirements

Insurers and reinsurers who wish to operate as a Dominican company must meet the following requirements:

Be organized as a company for shares according to the laws of the Dominican Republic.
Have as an exclusive corporate purpose the realization of insurance, reinsurance or both operations and other operations normally related to these activities.
That from its authorized capital have been subscribed and paid, in cash, shares for a value not less than 8.5 million pesos gold or the equivalent in pesos pesos of 500 thousand dollars of the United States of America.
That at least 51% of its capital, and of the shares exercised by its government, be owned by Dominicans, through registered shares. When these are moral persons, not less than 51% of their capital, and of the actions exercised by the government of said legal persons owning the shares, they must belong to Dominican individuals, through registered shares.
That most of its directors and officers reside inn the country. That the total of the owners of the shares and their directors, have sufficient economic and moral solvency, verifiable by the Superintendency of Insurance of the Dominican Republic (www.superseguro.gov.do). Submit your projected business plan to 1, 5 and 10 years. Foreign companies wishing to operate as insurers or reinsurers in the Dominican Republic must meet the following requirements: Have organized as a company for shares according to the laws of the Dominican Republic. § Have offices open in the Dominican Republic. § To have as an exclusive corporate purpose the realization of insurance, reinsurance or both operations and other operations normally related to these activities. § That their authorized capital have been subscribed and paid, in cash, shares for a value not less than 8.5 million pesos gold, or the equivalent in pesos pesos of 500 thousand dollars of the United States of America. That 51%, as m nimo, its capital and shares exercising their government, are owned by foreigners, by registered shares. When these are moral persons, not less than 51% of their capital, and of the actions exercised by the government of said moral persons owning the shares, must belong to foreign natural persons, through registered shares. § Being organized and operating for more 5 years, according to the laws of their country of origin. The minimum capital required must be filed and maintained in the Dominican Republic. Certification of the government agency in charge of supervising the operations carried out by the companies or insurance companies in their country of origin, which certifies that the applicant entity is organized and operates in accordance with the laws and that is authorized to carry out the operations corresponding to the insurance field included in the application, this certificate must be translated into Spanish .§ That the total of the owners of the shares and their directors have sufficient economic and financial solvency al, verifiable by the Superintendency of Insurance of the Dominican Republic (www.superseguro.gov.do). § Submit your business plan projected to 1, 5 and 10 years. Reserves According to the provisions of the Law, insurers and reinsurers must constitute different kinds of reserves, some of which depend on the types of insurance offered by the companies. The reserves required by the Law are: Mathematical reserves: In the individual life insurance they are equivalent to the difference between the current value of the insurer's obligations towards the insured and the current value of the insured's obligations towards the insurer, and its calculation it is carried out on the basis of net premiums and in accordance with the interest rate and the mortality tables used by the insurer. While in temporary insurance, settled, extended, life annuities and certain, should be established on the basis of net premiums.Reserve risks in progress: For insurance contracts not included in the mathematical reserve are calculated based on the proportion of retained premiums not accrued on current insurance and reinsurance, but such reserves can not be less than the amount resulting from applying the percentages detailed below on the value of the premiums withheld, net of cancellations or refunds, during the year to which corresponds the valuation: 5% for cargo transport insurance in general, 5% for group life insurance, personal and health accidents, provided that the premium is charged per monthly installments, 40% for the rest insurances and bonds not specified above. Specific reserves: They must be constituted at the end of each quarter, due to the obligations retained pending compliance by the insurers and reinsurers and whose obligations arise from expired policies, dividends, losses and other compensations claimed and pending payment. Reserves for catastrophic risks: Should be constituted with a minimum of 0.5% and a maximum of 5% of the net premiums retained in the coverage of the Fire Branch and Allied Lines exposed to catastrophic losses. Forecast reserves: They must be constituted with the equivalent of 10% of the resulting amounts after deducting the corresponding taxes from their annual net profits. This percentage includes the 5% required by the Commercial Code to the companies by shares. All the reserves, with the exception of the specific reserve, can be invested in securities issued or guaranteed by the Dominican State; easily liquid financial instruments, issued and guaranteed by the institutions authorized as such within the national financial system; investments in foreign currencies; real estate located in the country; installment deposits in banks located in the country; among others. The specific reserves mustbe placed in financial instruments with immediate repurchase clauses, certificates of deposit in banks located in the country, and easily liquid financial instruments, issued and guaranteed by authorized institutions within the national financial system. Guarantee Fund Insurers and reinsurers, by provision legal, must constitute a special fund to exclusively guarantee the obligations arising from insurance, reinsurance and surety contracts, but whose use by the beneficiaries is conditioned to the existence of a judgment that has acquired the authority of the irrevocably judged.Competence Law No. 146-02, in order to avoid economic concentrations and their possible repercussions on free competition, provides that insurers, reinsurers, intermediaries and adjusters must apply to the Superintendency of Insurance of the Dominican Republic ( www.superseguro.gov.do) author to make any subscription or transfer of shares. In this sense, no transfer or subscription of shares by new shareholders of insurers, reinsurers, intermediaries and adjusters, will be valid if it had not been approved in advance by the Superintendency of Insurance of the Dominican Republic (www.superseguros.gov .do). Tax System According to the Tax Code, it is presumed that foreign insurance companies, whether located in the country or not, obtain a minimum net benefit from a Dominican source, equivalent to 10% of the gross premiums charged by them for the insurance or reinsurance of persons, goods or companies located in the country, with the understanding that the concept of gross premium collected does not include taxes that have to be paid for other items. In addition, national insurance companies are subject to this presumption when their net income obtained can not be determined. The compensations for illness or injury payable under health or disability insurance, as well as the amounts received as beneficiary of Life insurance are exempt from paying income taxes.