Authorizations For New Labor Risk Insurers Are Temporarily Suspended

On January 13, the Argentine Superintendence of Insurance (the “SSN,” after its acronym in Spanish) issued Resolution 30/2022 suspending for 180 days the processing of new authorizations to operate as labor risk insurers and suspending the processing of ongoing requests.

According to the SSN, the suspension aims to protect the operation and solvency of authorized labor risk insurance companies in economic crises caused by compensations resulting from the spread of COVID-19. Under Decree No 367/2020, COVID-19 related illnesses are, prima facie, considered an occupational disease.

The Resolution states the crisis is reflected on the negative balance of Occupational Disease Trust Fund, which is intended to financially support labor risk insurance company payments of certain compensations, including those caused by the COVID-19 spread. This negative balance demands insurers to bear those payments with their own funds.

The SSN argues that this suspension will prevent “unfair commercial conditions” between authorized labor risk insurance companies and potential new ones, since new companies would not have to deal with compensation payments arising from the COVID-19 spread.

The SSN invoked Section 7-g of Law 20,091 which establishes that insurance companies are authorized to operate in the Argentine insurance market as long as “their participation is desirable for the market itself”. Thus, the SSN suspended the processing of authorizations with the alleged purpose of not harming the stability of the insurance market and protecting insureds.

The Resolution came into force on January 14, 2022 after it was published in the National Gazette, and will remain in force until July 13, 2022.