Colombian regulator clarifies rules for foreign reinsurers’ underwriting agencies (coverholders)
In a legal opinion issued in May 2025, the Colombian Superintendence of Finance (the “SFC”, for its acronym in Spanish) addressed the applicable regulations and the permitted activities of underwriting agencies acting on behalf of foreign reinsurers registered in Colombia.
Below are some of the key considerations set out by the SFC:
1. Insurance and reinsurance activity: government authorization and public interest nature
Pursuant to Article 335 of the Political Constitution of Colombia, insurance and reinsurance activities may only be carried out with prior authorization from the State, given their public interest nature.
2. General concepts regarding reinsurance activity
Under the current legal framework, reinsurers’ activities must be strictly limited to reinsurance operations, as established in the Organic Statute of the Financial System (“EOSF”) and the Colombian Commercial Code. The latter governs the reinsurance contract and reinforces its functional dependence on the insurance contract, referring to the rules and principles applicable to insurance contracts—among them, the “follow the fortunes” principle—thus highlighting its “insurance-like” nature.
Accordingly, a reinsurance contract cannot exist independently; it must be linked to the prior or concurrent existence of an insurance contract.
3. Vehicles for the operation of foreign reinsurers
Decree 2555 of 2010 and the EOSF establish two mechanisms through which foreign reinsurers may offer their services in Colombia:
Registration in the Registry of Foreign Reinsurers and Reinsurance Brokers (REACOEX), administered by the SFC; or
Establishment of a representative office in Colombia.
4. Reinsurance underwriting agencies: regulation and operation
Under Colombian law, underwriting agencies (coverholders) of reinsurers are not subject to specific regulation. The only guidance on the matter is found in the SFC’s Basic Legal Circular (“CBJ”), which contains provisions on their registration.
These underwriting agencies act on behalf of foreign reinsurers registered in REACOEX, under the express authorization of such reinsurers. Their primary function is to accept or cede reinsurance risks in the name and on behalf of the authorizing reinsurer, in accordance with the powers granted to them.
5. Procedure and requirements to operate as an underwriting agency
The registration of an underwriting agency does not constitute a separate registration within REACOEX. The ability of an underwriting agency to operate in the Colombian reinsurance market depends on prior authorization by the reinsurer and subsequent registration by the SFC within the same registry. To this end, the reinsurer must submit an Excel form to the SFC containing specific information about the underwriting agency.
The SFC may, at its discretion, request additional information from the reinsurer regarding its underwriting agencies.
If the underwriting agency is authorized in its home country to act as a reinsurance broker, it must also be registered as such in REACOEX.
6. Restrictions and limitations
Underwriting agencies may not be incorporated or carry out business as commercial companies in Colombia. Their activities must be conducted from abroad and are limited to the underwriting or cession of reinsurance risks on behalf of a foreign reinsurer registered with REACOEX.
7. Additional considerations
In addition to the points addressed by the SFC in its legal opinion, it is important to note that: (i) the restriction requiring underwriting agencies to operate exclusively from abroad; and (ii) the obligation of the reinsurer to inform the SFC of the criteria and policies used to select and approve such agencies, were both incorporated into Section 2.2.1, Chapter III, Title II, Part I of the new CBJ, reissued in June of this year.
Lucas Fajardo Gutiérrez | Partner of the Insurance and Reinsurance Team
Daniel Delgado Jaramillo | Associate of the Insurance and Reinsurance Team
Luis Alejandro Peña | Associate of the Insurance and Reinsurance Team
Brigard Urrutia
Insuralex´s Exclusive Member in Colombia
