Ecuador Insurance Industry – Governance, Risk and Compliance

Ecuador Insurance Industry Regulation Overview

The Superintendencia de Compañías, Valores y Seguros (SCVS) acts as the key regulator of the Ecuador insurance industry along with other regulatory and supervisory bodies such as the International Association of Insurance Supervisors (IAIS) and the Association of Insurance Supervisors Latin America (ASSAL) act as the other supervisors. The Ecuador Insurance Industry governance regulation report provides a detailed analysis of the insurance regulations for life, property, motor, liability, personal accident and health (PA&H), and marine, aviation, and transit (MAT) insurance. The report specifies various requirements for establishing and operating insurance and reinsurance companies and intermediaries. The report also gives insurers access to information on prevailing insurance regulations and recent and upcoming changes in the country’s regulatory framework, taxation, and legal system. It includes the scope of non-admitted insurance in the country as well.

Ecuador Insurance Industry – Key Regulators and Legislation

Superintendencia de Compañías, Valores y Seguros (SCVS): The insurance industry in Ecuador is regulated and supervised by the SCVS. On September 14, 2015, the SCVS assumed control and regulation of the private insurance industry from the SBS with an objective to strengthen the country’s financial system. The SCVS is responsible for providing regulatory frameworks that strengthen, establish, and maintain risk management controls, thus protecting the rights of financial service users and monitoring information security.

International Association of Insurance Supervisors (IAIS): The IAIS is a membership-driven global organization that represents insurance regulators and supervisors. It formulates and issues various global insurance principles, standards, and guidance, provides training and support on issues related to insurance supervision and organizes meetings and seminars for insurance supervisors. The IAIS works closely with other financial sector standard-setting bodies and international organizations to promote financial stability.

Key pieces of legislation governing the industry are:

• General Insurance Law
• Codified Insurance Law

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Ecuador Insurance Industry - Compulsory Insurance

Some of the key compulsory insurances required within the Ecuador insurance industry are:

• Motor Third-Party Liability Insurance
• Aviation Liability Insurance
• Marine Liability Insurance
• Professional Indemnity Insurance
• Social Security Insurance

Ecuador Insurance Industry Analysis by Compulsory Insurances

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Ecuador Insurance Industry - Company Registration and Operation

A license is required to operate in the Ecuador insurance industry. Article 9 of the Codified General Insurance Law 2014 stipulates that (re)insurance companies must obtain prior authorization from the SCVS to conduct insurance business activity in the country. Insurance companies can also open branches in the country or abroad under Article 13 of the Regulations of the General Insurance Law (Executive Decree 1510). However, companies are required to obtain prior approval from the SCVS before creating branches. (Re)insurance intermediaries must obtain and maintain their credentials and registration with the SCVS as well for conducting their intermediation activities in Ecuador.

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Ecuador Insurance Industry – Taxation

Tax is imposed upon insurance premium within the insurance industry in Ecuador. The other taxes imposed are Corporate Income Tax, Corporate Capital Gains Tax, and Value Added Tax.

Corporate Income Tax: The Internal Revenue Service administers taxation in Ecuador in accordance with the country’s Tax Code and Production Code. Corporate tax applies to both domestic and foreign companies operating in the country. Domestic companies are taxed on their global consolidated income, whereas foreign companies are taxed only on the income earned in Ecuador. Companies carrying out business operations in non-tax heaven jurisdictions are subject to corporate income tax rate.

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Scope

This report provides:

• Details of the insurance regulatory framework in Ecuador
• Details of the rules and regulations governing insurance products and insurance entities
• Lists and analysis of key trends and developments pertaining to the country’s insurance regulatory framework
• Analysis of the rules and regulations pertaining to the establishment and operation of insurance businesses in the country
• Details of the taxation imposed on insurance products and insurance companies

Key Highlights

• The SCVS regulates the Ecuadorian insurance industry.
• Composite insurance is not permitted in the Ecuadorian insurance industry. However, composite insurers established prior to 1998 can offer both life and non-life insurance products.
• Non-admitted insurance is not permitted. However, risks for which local capacity is not available are permitted to be placed with unauthorized insurers.
• SPPAT, general insurance under the Social Security Act, and aviation insurance are some of the compulsory insurances.

Reasons to Buy

• Provides FAQ-style analytical insights comprising 129 knowledge elements on insurance compliance applicable to the country.
• Gain insights into the insurance regulatory framework in Ecuador.
• Track the latest regulatory changes and expected changes impacting the Ecuador insurance industry.
• Gain detailed information about the key regulations governing the establishment and operation of insurance entities in the country.
• Understand key regulations and market practices pertaining to various types of insurance products.