The Peruvian insurance market is mainly regulated by two legal texts: the “Ley General del Sistema Financiero y del Sistema de Seguros y Orgánica de la Superintendencia de Banca y Seguros (Ley N° 26702)” [General Law on the Financial System and the Insurance System and the Organic Law on the Superintendency of Banking and Insurance (Law No. 26702)], also known as the “Ley General” [“General Law”] and by the “Ley del Contrato de Seguro (Ley N° 29946)” [the Insurance Contract Law (Law No. 29946)]. The former is aimed at regulating insurance market participants (insurance company, risk adjusters, insurance brokers), while the latter focuses particularly on insurance contracts (requirements, interpretations, types of insurance, restrictions).

Entering into insurance contracts is regulated in the Insurance Contract Law, particularly in Articles 4 to 7 where: (i) its consensual nature is recognised, as it does not require issuing the Policy or paying the premium for an insurance contract to be considered to having entered into it; (ii) it states that applying for an insurance does not bind the policyholder nor the insurer; (iii) it explains the content for applying for an insurance; and, (iv) the manner of renewing an insurance contract.

It is also important to mention that although these regulations are the ones that specifically regulate entering into insurance contracts, there are other legal regulations that directly and indirectly regulate the insurance market such as the “Código de comercio de 1902” [1902 Commercial Code] (if the contract was entered into during its validity, prior to the enactment of the “Ley del Contrato de Seguro de mayo de 2013” [May 2013 Insurance Contract Law]); the Political Constitution of Peru, which establishes contractual freedom; the “Código de protección y defensa del consumidor y de la propiedad intelectual” [Code for Protecting and Defending Consumers and Intellectual Property], which protects consumers by establishing provisions that suppliers must comply with and specifying the clauses that can be qualified as abusive; so that as a whole these are regulations that must also be observed when entering into insurance contracts.

In Peru, the special law governing insurance companies is the “Ley del Contrato de Seguro (Ley N° 29946)” [Insurance Contract Law (Law No. 29946)], which applies imperatively to all kinds of insurance. In the case of compulsory insurance or those regulated by special laws, this law is supplementarily applied. In the case of surety insurance, the specific provisions contained in Law No. 29946 are applicable, as well as the regulations on the subject enacted by the Superintendency. In this sense, all insurers are governed by these rules, regardless of their class.

With regard to reinsurance companies, Title III of Law No. 29946 contains two provisions on reinsurance contracts: (i) legal definition (Article 138); and, (ii) the autonomy of reinsurance contracts (Article 139). However, it does not contain further provisions regulating reinsurers.

Furthermore, the “Ley General del Sistema Financiero y del Sistema de Seguros y Orgánica de la Superintendencia de Banca y Seguros (Ley N° 26702” [General Law on the Financial System and the Insurance System and the Organic Law on the Superintendency of Banking and Insurance (Law No. 26702)] contains legal provisions that refer to the freedom to take out insurance and reinsurance contracts; the forms establishing insurance and reinsurance; their limits and prohibition; their operations; and, more; but it does not contain further normative provisions that regulate the scope of reinsurance contracts, as is the case with insurance companies.

Insurance brokers and different intermediaries in the insurance system are regulated both by the

“Ley General del Financiero y del Sistema de Seguros y Orgánica de la Superintendencia de Banca y Seguros (Ley N° 26702)” [General Law on the Financial System and the Insurance System and the Organic Law on the Superintendency of Banking and Insurance (Law No. 26702)], as well as by the different resolutions and directives issued by the Superintendency of Banking, Insurance, and Private Pension Fund Administrators (SBS).

Thus, it identifies which persons are included in designating insurance intermediaries (insurance and reinsurance brokers); registration requirements, legal definitions, functions and duties of insurance brokers; appointing brokers; among others. Moreover, complementing the provisions of the law, by means of SBS Resolution No. 809-2019, the SBS approved the “Reglamento de supervisión y control de corredores de seguros y auxiliares de seguros” [Regulations on Supervising and Controlling Insurance Brokers and Insurance Assistants], where Chapter II “De los Corredores de Seguro” [“Insurance Brokers”] further develops the regulations of insurance brokers in the Peruvian market.

Article 3 of SBS Resolution No. 809-2019 states that insurance brokers and insurance assistants (experts, adjusters) must be registered in the “Registro de Intermediarios y Auxiliares de Seguro” [Register of Intermediaries and Insurance Assistants]. An example of a special regulation for insurance brokers is provided for in Article 3.2 and 15 of SBS Resolution No. 809-2019 where it is stated that insurance brokers must have a Civil Liability Policy in force. As mentioned above, these natural persons and/or legal entities must be duly registered in accordance with Article 3 of SBS Resolution No. 809-2019 and Article 11 of the General Law (Law No. 26702).

Any person operating within the framework of Law No. 26702 requires prior authorisation from the Superintendency. Therefore, if he/she is not authorised, he/she is prohibited from engaging in the business of insurance companies or from granting insurance coverage on his/her own account.

For this reason, both the incorporation of an insurance company and the corresponding authorisations are duly regulated in Titles I “Constitución de las empresas del sistema financiero y del sistema de seguros” [Incorporating Financial and Insurance System Companies] and II “Otras autorizaciones” [Other Authorisations] of Law No. 26702 and do require authorisation to carry out their activities. For this purpose, they must comply with different types of requirements set out in the regulation, while being supervised by the Superintendency of Banking and Insurance. These requirements are found in Chapter II “Autorización de organización” [Organisation Authorisation], Sub-Chapter I of SBS Resolution No. 211-2021 “Reglamento de autorización de empresas y representantes de los sistemas financiero y de seguros” [Regulations on Authorising Companies and Representatives of the Financial and Insurance Systems]”. The organisers must then apply for an operating permit within a maximum of 360 working days after obtaining the organiser’s organisational authorisation certificate. This application must comply with the provisions of article 21.2, attaching information on the registration and incorporation of the company; updated information on the organisers (according to article 5 of the aforementioned regulation), methodological document on technical reserves; among others.

The determining factors in this process are based on verifying a solid business plan for the insurance market; financial solvency; verifying the legitimacy of the capital contributed to the company; comply with technical regulations; and, the organisers’ morality (according to Article 13 of SBS Resolution No. 211-2021 and Article 19 of the General Law). The deadlines depend on how the steps and requirements of the relevant authorities are followed.

In this regard, we should mention that there are limits on who can be organisers of insurance companies, as detailed in Article 20 of Law No. 26702. Among those listed as impediments are: those persons convicted of crimes of illicit drug trafficking; money laundering; financing terrorism; terrorism; attempts against Peruvian domestic security and treason; and other intentional crimes,  even if persons would have been rehabilitated; those persons who are in the process of insolvency and bankruptcy; the majority shareholders of a legal person that is in the process of insolvency or bankruptcy; members of the Peruvian Legislature and of the Peruvian governing bodies of local and regional governments, directors, workers and counsellors of Peruvian public bodies that regulate or supervise the activity of companies; among others.

There is no restriction regarding regulating foreign investment capital regarding its participation in insurance and/or reinsurance companies. This is in line with the provisions of Article 60 of the Political Constitution of Peru, as well as with the economic model that Peru has been following since the 1990s.

No. In Peru, it is not possible to insure or reinsure without the respective authorisations detailed in Titles I and II of the General Law (Law N°26702). Therefore, an organisers’ authorisation certificate is first required, and then, through a process before the SBS regulated in SBS Resolution No. 211-2021 and other applicable regulations stated above, the applicant is granted an operating permit.

In this regard, the insurance and financial system, in general, is strictly supervised to avoid the possibility of fraud, money laundering, and precariousness in the financial system in general.

According to Article 5 of Law N° 26702, foreign investment has the same treatment as domestic capital. This is in accordance with Article 63 of the Political Constitution of Peru, which establishes that domestic and foreign investment are subject to the same conditions. As stated in question 4, insurance and reinsurance companies are regulated in terms of their incorporation and operations by the same regulations.

Additionally, Article 6 of Law No. 26702 establishes the prohibition of discriminatory treatment among companies of the same nature or companies established in Peru with respect to their counterparts abroad.

There is no differential treatment, restriction or limitation for foreign insurance companies to establish subsidiaries. However, overseas insurers must observe the regulatory framework stated in question 4. Thus, Law No. 26702 establishes that for establishing subsidiaries wishing to carry out activities provided for in that law, they must first obtain authorisations for organisation and operating permits. Rules are also established for establishing subsidiaries by insurance companies: (i) total investment in subsidiaries may not exceed 40 per cent of the company’s assets, except in the case of subsidiaries of general insurance companies engaged in life insurance; (ii) participation of an insurance undertaking in the share capital of a subsidiary may not be less than three fifths; and, (iii) plurality of shareholders is not required, among others.

The Superintendency of Banking and Insurance has full sanctioning authority over the companies and markets it supervises, so that anyone who commits such administrative infractions will be sanctioned in accordance with Resolution No. 2755-2018 “Reglamento de infracciones y sanciones de la Superintendencia de Banca, Seguros y Administradoras Privadas de Fondos de Pensiones” [Regulations on Infractions and Sanctions of the Superintendency of Banking, Insurance, and Private Pension Fund Administrators], the purpose of which is to regulate exercising the sanctioning authority attributed to the Superintendency in accordance with articles 356 and 361 of the General Law, in accordance with article 345 of the same law; as well as by numeral j) of article 57 of the “Texto Único Ordenado de la Ley del Sistema Privado de Administración de Fondos de Pensiones” [Unique Ordered Text of the Law on the Private System of Pension Fund Administration], approved by Supreme Decree Nº 054-97-EF, paragraph 6 of the Twenty-Fourth Final and Complementary Provision of the General Law and other regulations that grant sanctioning powers to the Superintendency, which involve both determining administrative infractions and applying the corresponding sanctions.

Carrying out operations and functions of an insurance company without having the necessary authorisations constitutes a “Very Serious Infringement” for insurance companies as well as for brokers, experts, and adjusters. Sanctions can range from a fine, temporary suspension, dismissal of the director, manager or any other employee responsible, who are barred from holding one of these positions for a period of 10 years. Also, depending on the offence, they may be subject to different criminal offences.

The SBS performs risk-based supervision, with its mandates being financial stability; financial integrity; proper market behaviour; and, adequate performance of the Private Pension System. With regard to insurance, the SBS ensures that insurance and the “companies that make it up are solid, solvent, and sustainable over time, so that they can fulfil the important role they play in Peru’s economy, and the obligations and commitments they have with their users, respectively”. It, thus, seeks to adopt good supervisory practices, and, to this end, it employs international best practices. The areas on which it focuses are mainly on risk, since its strategic objective is to ensure that the supervised systems manage their risks prudently; are sound, solvent and sustainable; and, that the supervised companies implement adequate business practices while respecting consumers’ interests and rights; including accountability to the SBS, which is why it is a rigorous level of supervision. All of this means that the SBS in Peru enjoys a good reputation.

The SBS ensures that “participating institutions are sound, solvent, and sustainable over time, so that they can meet their obligations and commitments to their policyholders” (SBS, n.d.)¹. Thus, the International Association of Insurance Supervisors sets out 26 fundamental principles on insurance supervision that are reviewed by the SBS, among which is the basic principle of “Valuation”.

“According to the Insurance Core Principles (PBS) 145 “Valuation”, the SBS establishes requirements for the valuation of assets and liabilities for the purpose of measuring the insurer’s solvency. Technical reserves should reflect the expected present value of all relevant future cash flows arising from fulfilling insurance obligations. It must also incorporate a margin (margin over current estimate or MOCE) to cover the uncertainty of those obligations.”²

To this end, the SBS carries out different stages of supervision: planning; implementing; monitoring; and even external inspections and evaluations.

Footnote(s):

¹ “Avances en el Marco Regulatorio y Supervisión del Sistema Asegurador” [Strides in the Regulatory Framework and Supervising the Insurance System]. Available at: https://www.sbs.gob.pe/Portals/0/Archivos/2022/Avances-Sistema-Asegurador-27_04_%202022.pdf

² Idem.

Article 16 D.) of Law No. 26702 sets the minimum amount of capital required to establish an insurance company. These amounts are as follows:

• Company operating in a single line of business (general risks or life): PEN 6,101,600 (USD 1,651,760.00);
• Company operating in both classes (general risks and life): PEN 8,387,400 (USD 2,270,547.00);
• Insurance and Reinsurance Company: PEN 21,353,200.00 (USD 5,780,498.00);
• Reinsurance Company: PEN 12,965,800.00 (USD 3,509,962.00)

According to Article 18 of the General Law, minimum capital amounts for incorporating a company in the insurance business change on a quarterly basis according to the ” Índice de precios al por mayor” [Wholesale Price Index] with reference to the whole country. In this respect, the aforementioned amounts are in accordance with Circular Letter No. G-222-2024, which has set the respective amounts for the 2024 January-March period. On the other hand, the law requires companies in the financial system and insurance system to reach a reserve of no less than or equal to 35% of their share capital. This reserve is constituted by transferring no less than 10% of after-tax profits.

Policyholders, better known on the Peruvian market as “asegurados” [policyholders] can, under the “Código de protección y defensa al consumidor” [Code on Consumer Protection and Defence] file complaints against insurance companies before the Instituto Nacional de Defensa de la Competencia y de la Protección de la Propiedad Intelectual (INDECOPI) [the National Institute for the Defence of Competition and the Protection of Intellectual Property (Indecopi)]. One of INDECOPI’s purposes is to protect consumer rights. In this sense it is a pro-consumer institution that always watches over consumers’ rights. In the event that a consumer complains about the improper rejection of a coverage, he/she can file a complaint with Indecopi, which will initiate an administrative sanctioning procedure to determine whether the insurance company has infringed the Code and, if so, can sanction the company with fines, warnings, and order activating the coverage as a corrective measure. There is also another administrative body, the “Superintendencia Nacional de Salud” [National Superintendence of Health], which also sanctions any non-compliance related to insurance involving health rights.

On the other hand, if the policyholder does not qualify as a consumer, the policyholder must apply for judicial protection through the Judiciary or, if there is an arbitration agreement, before an arbitration institution.

In Peru, the SBS regulates conglomerates through several resolutions. SBS Resolution No. 11823-2010 approves the “Reglamento para la supervisión consolidada de los conglomerados financieros y mixtos” [Regulations for the Consolidated Supervision of Financial and Mixed Conglomerates] and its amendment by SBS Resolution No. 1200-2018, in addition to SBS Resolution No. 5780-2015, which approves new special rules on Relationship and Economic Group and subsequent resolutions.

Senior executive positions in insurance companies are subject to the “Principios básicos de seguros, estándares, guía y metodología de evaluación” [Insurance Core Principles, Standards, Guidance, and Assessment Methodology] issued by the International Association of Insurance Supervisors.  In addition, SBS Resolution No. 272-2017, “Reglamento de gobierno corporativo y de la gestión integral” [Regulations on Corporate Governance and Comprehensive Management], establishes requirements and impediments to be shareholders, directors, managers and senior officers.

Senior insurance executives must meet technical and moral fitness requirements and may be liable for breaches of their duties under administrative, civil, and criminal provisions.

Yes. As answered in question 4, both insurers and reinsurers must comply with minimum requirements established in Law No. 26702 to be able to legally carry out their activities in the Peruvian legal system.

Insurance companies may outsource services. However, they are responsible for the activities they may outsource. Even if it has outsourced certain functions or services to third parties, the insurer is still responsible for ensuring that the terms of insurance contracts are met and that adequate service is provided to its policyholders. Nevertheless, it is legally possible for the insurer to transfer part of that responsibility through contractual agreements with external service providers. These contracts generally set out the terms and conditions under which the services will be performed, including quality standards, delivery schedules, and liabilities for non-performance.

Regarding risk management and outsourcing, the “Reglamento de gobierno corporativo y de la gestión integral de riesgo” [Regulations on Corporate Governance and Comprehensive Risk Management], SBS Resolution No. 272-2017, regulated in Chapter IV on “Subcontratación” [Outsourcing]. However, by virtue of SBS Resolution No. 504-2021, this chapter has now been amended to “Bienes y/o servicios provistos por terceros” [Goods and/or Services Provided for by Third Parties]. It is now established that: (i) Goods and/or services provided for by third parties are those delivered to the company by a supplier; and, (ii) In the case of a good and/or service that could be developed by the company but which the insurer decides to require a third party to do it, outsourcing is set up.

Regarding the goods and/or services provided for by third parties, it is stipulated that the company is responsible for the results of goods and/or services provided for by third parties under outsourcing and that the risks associated with the delivery of goods and/or services provided for by third parties should be managed as part of the company’s comprehensive risk management framework. Similarly, as in the previous regulation, there are also activities that require authorisation for the procurement of goods or services.

In the specific case of Peru, insurance and reinsurance companies are regulated by the Superintendencia de Banca, Seguros y Administradoras Privadas de Fondos de Pensiones (SBS) [Superintendency of Banking, Insurance, and Pension Fund Administrators (SBS)]. This entity establishes regulations and requirements for the investments of insurance and reinsurance companies in Peru. Law No. 26702 establishes that insurance companies are prohibited to pledge their assets applied to the investments referred to in Article 311 (investments and backing of obligations), as insurance companies must clearly at all times back the total of their obligations associated with the insurance business with assets that comply with the provisions indicated by the Superintendency in complementary regulations. For this reason, as regulated in this last article, the Superintendency will regulate the investment items and limits to which the assets destined to back the aforementioned obligations will be subject. Moreover, insurance companies are also prohibited from carrying out operations with shares representing their capital stock.

Yes. In Peru has a “Reglamento de gobierno corporativo y de la gestión integral de riesgos y establecen otras disposiciones” [Regulations on Corporate Governance and Comprehensive Risk Management and other Provisions], SBS Resolution No. 272-2017, applicable to insurance and reinsurance companies. Title III ” Gestión integral de riesgos” [Comprehensive Risk Management] sets out the general aspects, the types of (non-limiting) risks, and the reinsurance risk which consists of  “the possibility of losses in the event of insufficient reinsurance coverage contracted by the ceding insurance company, when the reinsurance needs were not identified, determined or adequately specified in the contracts; or when the reinsurer is unable or unwilling to meet its payment commitments due to discrepancies in applying the terms of the insurance and/or reinsurance contract; as well as late payments by the reinsurer that may affect the ceding company’s cash flows, generating a liquidity risk. It also includes the risks taken on by the company when participating as a reinsurer in accepted reinsurance operations”.

Marketing and sale of insurance in Peru is regulated by several regulatory bodies. Thus, SBS Resolution No. 3199-2013 “Reglamento de transparencia de información y contratación de seguros” [Regulations on Transparency of Information and Insurance Contracting] establishes among its legal provisions the information that must be provided for in the stage prior to entering into an insurance contract; the minimum conditions to be followed for each type of insurance; the deadlines for the summary of the policy; the information provided to the policyholders during the term of the insurance; and others. Additionally, SBS Resolution No. 1121-2017, which approves the Regulations on the marketing of insurance products, regulates the different types of marketing modalities; the responsibilities towards the contracting party, policyholders and/or beneficiary; among others; and, also SBS Resolution No. 4143-2019 “Reglamento de gestión de conducta de mercado del sistema de seguros” [Regulations on Market Behaviour Management of the Insurance System] regulates the practices adopted by insurance companies and insurance brokers with users (consumers). In general, there are many insurance provisions that regulate and supervise the sale of insurance at the domestic level.

It is viable to actively market insurance through remote systems in Peru. SBS Resolution No. 277-2021 establishes the conditions applicable to marketing through the use of remote systems, which stipulates that for these purposes the identification requirements or others established in the Regulations on Market Behaviour Management and the specific rules issued by the Superintendency on the matter are applicable. In this respect, the aforementioned regulation stipulates that companies may outsource to third parties specialised in remote services and at the same time must implement adequate support to obtain, preserve, and safeguard the information provided to the potential policyholders and their acceptance for contracting insurance, according to the characteristics of the channels used, their own or those of their marketers, which includes video and/or voice recordings or other mechanisms.

On the other hand, regarding remote insurance services for insurance issued abroad, the SBS published a statement in 2018 warning that “natural and legal persons (…) have been offering life insurance policies issued abroad in Peru, without such persons being authorised by the SBS to market insurance policies”³. For this reason, the SBS urged the public “when deciding to take out life insurance”⁴, to consider that “life insurance policies issued abroad are not regulated or supervised by the SBS”⁵. Years later, the SBS again reported that “a form of financial informality that is being observed is the purchase of insurance policies, whether health, employment, life, among others, issued by foreign insurance companies”⁶. Indeed, as explained in question 4, only those incorporated in Peru and those authorised to market policies in Peru can carry out policy marketing activities in Peru.

Footnote(s):

³ Superintendency of Banking, Insurance, and Private Pension Fund Administrators. Warning on the sale of insurance issued abroad. Available at: https://www.sbs.gob.pe/comunicado/detallecomunicado/idcomunicado/11?title=Advertencia%20sobre%20venta%20de%20seguros%20emitidos%20en%20el%20exterior/

⁴ Idem.

⁵ Idem.

⁶ GUARDIA QUISPE, Karen. Pólizas de seguro emitidas en el extranjero no cuentan con autorización de SBS, dónde reclamar. [Insurance policies issued abroad are not authorised by the SBS – where to complain]. In: Diario Gestión, 14 September 2022. Available at: https://gestion.pe/tu-dinero/polizas-de-seguro-emitidas-en-el-extranjero-no-cuentan-con-autorizacion-de-sbs-donde-reclamar-sbs-polizas-carlos-cueva-dinero-respaldo-informalidad-financiera-noticia/

Yes. In consumer matters, insurance companies are subject to the provisions of the “Código de protección y defensa al consumidor” [Code on Consumer Protection and Defence] and the body that supervises their compliance is the Instituto Nacional de Defensa de la Competencia y de la Protección de la Propiedad Intelectual (INDECOPI) [National Institute for the Defence of Competition and the Protection of Intellectual Property (INDECOPI)]. On the other hand, in terms of health rights, insurance companies are supervised by the Superintendencia Nacional de Salud – SUSALUD [National Superintendency of Health – SUSALUD].

There is no regulation in Peru that directly restricts the prices that insurance companies set for their services. This is regulated in Article 9 of the General Law, which states that companies in the insurance system freely determine policy conditions, rates, and commissions. In Peru, there is a high level of insurance consumer protection, as discussed in question 13.

Yes. There is a broad legal regime of special laws and resolutions issued by the SBS that are applicable to insurers, and it is necessary to identify whether or not a policyholder is a consumer as a first step, since it is from there on that sanctioning rules are applied to insurance companies.

When cases are particularly complex, in case there is an arbitration agreement, they are usually resolved by an Arbitral Tribunal. However, in the absence of such an agreement, disputes are resolved by the Judiciary. In the city of Lima there are Civil Courts with sub-specialisation in Commercial Law which, among other competences, resolve disputes related to compliance with the provisions contained in the policies. Unfortunately, when extremely complex cases arise, it can lead to distortions of insurance institutions, which is why it is the task of lawyers and academics to delve deeper and reflect on the legal figures of insurance law.

Yes. When a loss occurs and the policyholder claims the coverage of the Policy, the insurance company must make a decision (expressly or tacitly) accepting or rejecting the request for coverage. In the latter case, the insurer sends a rejection letter detailing the alternative dispute resolution methods to which the policyholder can turn to in case he/she is not satisfied with the response. Thus, as a first piece of information, the insurer provides its service channels and then details that one can go to the “Defensoría del Asegurado” [Policyholders Ombudsman] (for claims formulated by natural or legal persons when the total compensation requested does not exceed the amount of US$50,000.00); INDECOPI or the Judiciary or the arbitration instance, according to what has been agreed upon. Finally, it is specified that in order to request guidance, the policyholder can also contact the “Plataforma de Atención al Usuario” [User Service Platform] of the Superintendency of Banking, Insurance, and Private Pension Fund Administrators at toll-free number 0-800-10840.

Yes. There are legal mechanisms for transferring books of (re)insurance, and one of the main methods is through a process called “portfolio ceding”. Portfolio ceding is a process whereby an insurance or reinsurance company transfers all or part of its policy portfolio to another company. In this regard, Article 321 of Law No. 26702 establishes that with policyholders’ consent and prior authorisation from the SBS and the formalities established by law, one or more branches of the insurance portfolio may be ceded to other companies of the same nature that are authorised to issue policies.

Entering the insurance market in Peru, as in any other country, can pose a number of challenges and problems for new companies. Some of the main issues they may face include: insurance market competition; regulations; capital and solvency; market knowledge; credibility; and, trust. On the other hand, regulators have a duty to ensure the stability and integrity of the insurance market, including encouraging competition and innovation. However, the level of specific support may depend on a number of factors, such as the nature of existing regulations, public policies, and the ability of the company to comply with regulatory requirements. In that sense, although entering the Peruvian insurance market can present challenges, new companies can find support from regulatory institutions, as long as they comply with established requirements and contribute to competition and market stability.

The Peruvian insurance market is increasingly facing digital innovation, although compared to other sectors and other countries, the pace may be slower. However, in recent years, significant progress has been made in this regard. Peruvian insurers are looking for partnerships with technology startups (Insurtechs) to develop innovative solutions, which may include implementing technologies such as artificial intelligence, data analytics or blockchain to improve their operations and offer more personalised and affordable insurance products, including the sale of microinsurance. It is also committed to more digital education to inform potential policyholders and policyholders that digital services are more beneficial because of the speed and capacity for timely response. In short, digital innovation is gradually transforming the insurance market in Peru, providing new opportunities for both companies and consumers.

In Peru, digitising insurance sales and service coverage through virtual channels is gradually gaining momentum, although it still faces challenges and the Peruvian legislature has not been elusive. SBS Resolution No. 1121-2017 approved the “Reglamento de comercialización de productos de seguros” [Regulations on Marketing Insurance Products], where Chapter IV “Comercialización a través del uso de sistemas a distancia” [Marketing Through Using Remote Systems], regulates, among others, telephone, internet or other similar systems that allow companies to have non-face-to-face access to potential customers and/or policyholders to promote, offer and/or market their products, and it includes digital marketing through social networks and price comparison systems. The Authority requires that when these systems are used, it must be ensured that the information provided is truthful, comprehensible, complete, and transparent, and that it is stored on media that allow it to be verified at a later date. The Authority recognises that digital channels are gaining ground and therefore urges the population to verify correctly whether or not the persons that are selling insurance are authorised companies in Peru. It also requires insurance companies to protect personal data and that all digital sales have a support that allows their corroboration.

In Peru, the regulation of personal data is mainly governed by Law No. 29733, “Ley de Protección de Datos Personales (LPDP)” [Law on Personal Data Protection (LPDP)] and its Regulations approved by Supreme Decree No. 003-2013-JUS. This legislation establishes the principles, rights, and obligations related to the processing of personal data by both public and private entities, including insurers. In this case, the National Authority regarding the Personal Data Protection is the one that carries out all the necessary actions to comply with the purpose and other provisions of the Law and its regulations, and, therefore, has the power to impose sanctions, in accordance with Law No. 27444, “Ley del Procedimiento Administrativo General” [Law on General Administrative Procedures], as well as coercive powers, in accordance with Law No. 26979, “Ley de Procedimiento de Ejecución Coactiva” [Law on Coercive Enforcement Procedures]. Title VII of the Law regulates the corresponding administrative infractions and sanctions.

In this regard, there is a high degree of regulation regarding personal data processing by insurers and its purpose is to protect the privacy and security of consumer information, under the supervision of the competent Authority.

According to Article 33 of Law No. 29733, the National Authority for Personal Data Protection has the administrative, guiding, normative, resolutive, supervisory, and sanctioning functions of “cooperating with foreign personal data protection authorities in order to fulfill their competences and to generate bilateral and multilateral cooperation mechanisms to assist each other and provide mutual assistance when required”.

In Peru, insurers observe ESG (Environmental, Social and Governance) guidelines, although the focus and specificity may vary compared to other countries. Generally speaking, ESG regulation and supervision for insurers focuses on aspects related to environmental and social risk management, integrating business practices, and decision-making. As a consequence, insurance companies on the market are committed to Peru’s society and environment.

In Peru, there is no specific regulation regarding diversity and inclusion in insurance companies. However, all companies in Peru are subject to Article 2, paragraph 2 of the 1993 Constitution of Peru, which states that no one should be discriminated against on the basis of race, sex, language, religion, opinion, economic or other status. INDECOPI is the authority that sanctions practices that establish discrimination in Peru, since not only the Constitution prohibits it, but also article 1 of the consumer rights, numeral 1.1, paragraph d), which establishes that consumers have the right to “fair and equitable treatment in all commercial transactions and not to be discriminated against on the basis of origin, race, sex, language, religion, opinion, economic condition or any other kind of reasons”. For its part, the Ombudsman’s Office has repeatedly stated that insurance companies cannot refuse to insure persons with disabilities as it is discriminatory and runs counter to international treaties.

Predicting the type of business that will take the lead in Peru over the next five years is speculative and depends on a variety of factors, including economic trends, technological advancement, changes in government regulations, and consumer preferences. However, we can point out that there are certain businesses that could experience significant growth and potentially lead the market in Peru, such as Financial Technology (Fintech), E-commerce, environmental sustainability, health and wellness, and insurance. On the latter, we believe that continued business digitisation and cyber threats make it plausible that the demand for cyber risks insurance will increase in the coming years, as could be the case for directors’ and officers’ (D&O) liability insurance, given the major developments in the business world and increased awareness of corporate liability.