There is escalating dialogue among risk managers, brokers and insurers in Argentina, Brazil, Mexico and other Latin American countries about how to effectively provide seamless, cost-effective and compliant insurance across national borders to multinational enterprises.
When developing a global insurance program, multinational clients seek outcomes that balance three core elements: maximizing global insurance capacity; minimizing cost; and maintaining centralized control over their insurance programs. Today, sophisticated buyers in Latin America are considering taking advantage of both their internal expertise in monitoring loss development and the predictable nature of their loss profile to structure programs that keep much of the risk under their corporate umbrella, either through reinsurance of such risk to their captives or through internal corporate management accounting. To do so, they leverage companies’ central control of insurance terms and limits, consolidated loss information, consistent loss control procedures, use of corporate buying power to obtain favourable risk transfer terms and pricing and simplified placement of global insurance coverage. Accomplishing these tasks in an ever-changing regulatory environment is a major challenge.
This paper introduces many of the regulatory and execution challenges faced in the multinational insurance marketplace, analyzes the laws of Argentina, Brazil and Mexico with respect to the concept of insurable interest, applies that concept to multina- tional insurance programs, and provides a check list of questions that underwriters, brokers and clients in the region should consider when designing and implementing a materially compliant multi- national insurance program.