The Superintendencia de Pensiones (Supen), the interim regulator of the Costa Rican insurance market, recently issued an opinion stating that the Instituto Nacional de Seguros (INS) and its component entities are not permitted to engage in insurance or reinsurance business outside of the country, whether by acquisition, establishment or joint venture. The Supen opinion, provided under request from legislator Carlos Gutierrez, is the latest in a series of contradictory declarations on the topic by the nation's various regulatory bodies.
The INS, the former monopoly holder in the Costa Rican insurance and reinsurance market, had previously created a subsidiary, INS International, and set aside US$ 100 million to pursue foreign opportunities, particularly in Central America. Indeed, the INS had been on the verge of purchasing a Nicaraguan insurer when it was first notified by Costa Rica's Controller General that it was not authorized to operate externally, a decision the Controller General later reversed. In September, however, the country's Procurer General issued an opinion contradicting the Controller General's reversal.
Given the uncertainty, the Executive President of the INS, Guillermo Costenla, recently stated that the company is not actively pursuing any foreign investment. Prior to the current debate, some commentators had maintained that international expansion to achieve diversity and volume would be key to the INS' ability to compete with private (including foreign) competitors allowed into the market beginning in the Fall of 2008.
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