Agreement No. 01 of November 25, 2021 (hereinafter the “Regulation”) regulates Microinsurance, who was originally defined in numeral 23 of article 23 of Law 12 of April 3, 2012 (known as the “Insurance Law”).

Microinsurance is defined as the financial mechanism whose purpose is to protect low-income individuals against specific risks, such as accidents, illnesses, deaths in the family and natural disasters, in exchange for the regular payment of an insurance premium that is adjusted to the needs, income and level of risk. Microinsurance is mainly aimed at low-income employees, especially those in the informal sector, who are often neglected by the usual traditional insurance schemes.

Microinsurance must have the specific characteristics and minimum policy required information detailed within the Regulation. The risks and coverage eligible to be approved and marketed as microinsurance are:

1. Individual term life
2. Personal accidents
3. Income for hospitalization or illness
4. Dental care
5. Funeral expenses
6. Multi-risk for housing/family.
7. Cancellation of trips
8. Warranty extension for manufacturer or distributor warranty extension for goods
9. Income for death or disability
10. Temporary or life annuities
11. Road or home assistance
12. Agricultural risks

The insurance companies must submit the microinsurance policy and insurance application models to be approved by the Superintendence of Insurance and Reinsurance of Panama (hereinafter the “Superintendence”).

Microinsurance may be marketed from the day following the date on which the insurer receives authorization from the Superintendency. Likewise, any modification to the microinsurance policy must first be submitted for approval by the Superintendence.

The sums insured must be up to a limit of five thousand dollars (USD5,000.00) per year, per each case.

Insurers must comply with a simplified due diligence process obtaining the minimum data required in the Regulation.

This Regulation is in full force.

If you have any questions about the implementation of the Regulation, please do not hesitate to contact us at info@parntherlaw.com so that we can provide you with comprehensive advice adjusted to your needs.