Name
Global FinTech Guide
Country _ Name
Uruguay
SectionTitle
InsurTech
Body
InsurTech is composed of the words “insurance” and “technology”. It is used as a collective term for the application of modern technologies in the domain of insurance services.

Digital and mobile brokers: FinTechs belonging to this category mostly act as digital insurance brokers and provide users with an overview of their insurance contracts with their respective conditions. Some FinTechs offer very short-term insurance contracts to cover specific cases which can be concluded often spontaneously via mobile devices. Oftentimes additional consulting services are offered.

Internet of things: FinTechs belonging to this category collect data by measuring for example the driving style of the customers or through wearables the customers wear to consult on, offer and/or manage the customer’s insurances.

Introduction 

Attitude of the country towards InsurTech-services

No reservations; there is an increasing interest in these types of services.

Legal affairs

Obligations and requirements to provide InsurTech-services

Digital insurance brokers are not specifically regulated in Uruguay, as opposed to the companies providing insurance (i.e., Insurance Companies), which not only are regulated but also require a license from the CBU. 

The requirements to operate in our country as an Insurance Company are the following:

    A) To be located in Uruguay
    B) To be authorized by the Executive Power
    C) To be licensed by the CBU

  1. Incorporation
    2. According to section 2 of the Law No. 16.426 "public or private entities, in order to perform insurance activities shall be located in the country and must be authorized by the Executive Power with the advice of the Insurance and Reinsurance Superintendency (...)". Also, Section 120 of Law No. 19.678 provides that insurance companies´ names must contain expressions referring to the insurance services and activities.

    Moreover, please note that section 2 of Decree No. 354/94 provides that insurance or reinsurance activities may be carried out solely by:

    1.  The state-owned entity called “Banco de Seguros del Estado”; or
    2.  Corporations whose corporate capital is represented in nominatives shares and have included in their bylaws that the shares may only be transferred with the prior authorization of the Insurance and Reinsurance Superintendency. It is also required that such corporations include in the bylaws that their exclusive purpose is to perform insurance activities.

  2.   Authorization
    3. The applicant institution must submit a form together with the following information before the Executive Branch:

      i) Proof of a deposit equivalent to 20% of the basic capital requirement. Please note that the corporation´s capital depends on the branches or areas of insurance where it will operate.
      ii) Certified copy of the company’s bylaws.
      iii) The contractual capital may not be less than those applicable as minimum capital.
      iv) Information regarding the shareholders, specifying, among others, the percentage of participation in the company´s capital.
      v) Information regarding the board of directors, syndics, and key personnel. Please note that according to section 14 of Decree No. 354/94 only individuals are allowed to act as directors, not being possible for legal entities to do so.

  3.  License from the CBU
    4. Once obtained the authorization to operate as
an insurance or reinsurance company by the Executive Branch, the applicant must submit the following information to the CBU:

    i) Evidence certified by a public accountant of having integrated the basic capital required.
    ii) Description of the measures adopted to start the activities.
    iii) Information regarding the key personnel in case of modifications.
    iv) Information regarding the external auditors.
    v) Description of the measures adopted to prevent money laundering and terrorism financing.
    vi) Explanatory file regarding the computer systems to be used.
    vii) Description of the internal control systems to be implemented.

  •  Procedure
    • We point out that such authorization and corresponding license are granted not only upon the compliance of formal requirements. The CBU also takes into consideration elements of merit and convenience, as well as the background of the founders or directors, as the case may be.

    The rules do not establish the term of the authorization and license procedure. What is expressly provided is that once the authorization to operate is granted, the aggregate amount of the basic capital must be paid up within thirty days; otherwise, the authorization shall be annulled.

    Furthermore, the rules provide that the company shall begin to operate within 180 calendar days, after the authorization is granted.

    Further, please bear in mind that according to article 21 of the Decree No. 354/94 all insurance companies should submit a copy of the text of the policies, as well as a copy of any amendments or attachments of the same. In this sense only the polices submitted before the CBU can be distributed.

    Finally, regarding insurance brokers, distinct from the practice in other countries, Uruguay does not have a specific regulation for these practices, therefore there is no specific regulation or licenses requirement to comply with.

    Despite the above, please note that currently insurance intermediaries are not subject to any regulations nor subject to licensing.

    Additional comments regarding the legal situation for InsurTech-services or what InsurTech’s must be aware of in this business area

    Companies acting as insurance brokers are not regulated nor subject to registration.

    However, as a general rule, and according to Law No. 16.426, except for international transportation and trade, all insurance agreements covering risks that may take place in Uruguay must be entered into by insurance companies duly authorized to operate in Uruguay. Failure to observe this requirement may lead to the imposition of fines to the parties involved.

    Such Law allows the existence of private insurance companies in Uruguay without any type of activity restriction (other than the work-related insurance, which is still under the Banco de Seguros del Estado’s monopoly).

    Notwithstanding the above, regarding the reinsurance activities be informed that the same may be performed by companies duly licensed as such in Uruguay or by foreign reinsurance companies under the terms imposed by the CBU.

    Regarding insurance brokers, and generally speaking, it is understood that these individuals act as an intermediary between the insured person and the insurance entity, notwithstanding the fact that in most of the cases these insurance brokers are appointed by the insured and recognized by the insurance entity. 

    Moreover, regarding the activities described under “Internet of things”, we understand that said activities may be performed freely. Bear in mind that, in case the information to be collected and treated is
    personal information or information protected under special confidential obligations (as may be Bank Secrecy) the prior and written consent of the natural person to whom the data undergoing processing pertain.

    Lastly, please note that Insurance Law No. 19.678 regulates certain aspects and clauses of insurance agreements which will need to be considered in case any type of insurance is offered in Uruguay.    

    Economic conditions

    Market size for InsurTech-services and biggest companies in this business area

    N/A

    Additional comments regarding the economic situation for InsurTech-services or what InsurTech’s must be aware of in this business area

    N/A

    Authors

    NameOrganisationEmail
    There are no records.

    Close

    Choose country