El Salvador Insurance Industry – Governance, Risk and Compliance
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El Salvador Insurance Industry Regulation Overview
The Superintendencia Del Sistema Financiero (SSF) acts as the regulator of the El Salvador insurance industry along with regulatory and supervisory bodies including the International Association of Insurance Supervisors (IAIS) and Association of Insurance Supervisors Latin America (ASSAL) act as the other supervisors. The El Salvador 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.
Key Regulators | · Superintendencia Del Sistema Financiero (SSF)
· International Association of Insurance Supervisors (IAIS) · Association of Insurance Supervisors Latin America (ASSAL) |
Compulsory Insurances | · Aviation Liability Insurance
· Social Security Insurance |
Key Taxes | · Tax on Insurance Premium
· Corporate Income Tax · Corporate Capital Gains Tax · Value Added Tax |
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El Salvador Insurance Industry – Key Regulators and Legislation
Superintendencia Del Sistema Financiero (SSF): The SSF was formed in 1990 to strengthen and restructure El Salvador’s financial system and seeks to align insurance regulations with international standards in terms of capitalization and prudential regulations. After 2011, the SSF became instrumental in ensuring the stability and efficient functioning of insurance companies in the country. It regulates and supervises the conduct of the insurance services industry, protects consumers, and provides regular updates on local and international insurance market developments, among other responsibilities.
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 laws and legislations regulating the industry are:
- Legislative Decree No. 844
- Legislation, Decree No. 44
- Legislation, Decree No. 477
- Organic Law of Civil Aviation or Decree No. 582
- Legislative Decree No. 592
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El Salvador Insurance Industry - Compulsory Insurance
Some of the key compulsory insurances required within the El Salvador insurance industry are:
- Aviation Liability Insurance
- Social Security Insurance
El Salvador Insurance Industry Analysis by Compulsory Insurances
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El Salvador Insurance Industry - Company Registration and Operation
A license is required to operate in the El Salvador insurance industry. Section 5 of Decree No. 844 stipulates that insurance and reinsurance companies must apply to obtain a license from the SSF to operate in the Salvadoran insurance industry. Similarly, Article 35 of Decree No. 44 stipulates that a prospective insurance brokerage company must apply to obtain a license to enter the Salvadoran insurance industry. Insurers are only permitted to operate within those classes for which they have been granted a license. Companies are permitted to operate insurance activities within more than one class or group of specific classes.
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El Salvador Insurance Industry – Taxation
Tax is imposed upon insurance premium within the insurance industry in El Salvador. The other taxes imposed are Corporate Income Tax, Corporate Capital Gains Tax, and Value Added Tax.
Corporate Income Tax: Taxation in El Salvador is administered and supervised by the Superintendent of Tax Administration, according to the Income Tax Law and VAT law. The authority is responsible for achieving an effective, efficient, transparent, and taxpayer-oriented administration. In El Salvador, any company incorporated in the country is considered a resident company. Both resident and non-resident companies are taxed only on income sourced from El Salvador.
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Scope
This report provides:
- Details of the insurance regulatory framework in El Salvador
- 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
- El Salvador’s insurance industry is regulated by the SSF.
- Composite insurance is permitted in El Salvador.
- Motor third-party liability insurance and aviation liability insurance are compulsory in El Salvador.
- Non-admitted insurance is not permitted in El Salvador.
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 El Salvador.
- Track the latest regulatory changes and expected changes impacting the Salvadoran 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.
Table of Contents
Table
Frequently asked questions
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Which is the key regulator of the El Salvador insurance industry?
The Superintendencia Del Sistema Financiero (SSF) is the key regulator of the El Salvador insurance industry.
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Which other bodies oversee the El Salvador insurance industry?
The International Association of Insurance Supervisors (IAIS) and the Association of Insurance Supervisors Latin America (ASSAL) oversee the El Salvador insurance industry.
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Which are the compulsory insurances required within the El Salvador insurance industry?
The key compulsory insurances required within the El Salvador insurance industry are aviation liability insurance and social security insurance.
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What are the types of taxes imposed upon the El Salvador insurance industry?
Tax is imposed upon insurance premium within the insurance industry in El Salvador. The other taxes imposed are Corporate Income Tax, Corporate Capital Gains Tax, and Value Added Tax.
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