Entering Insurance Contracts With Foreign Insurers in Mexico

In accordance with the Mexican Insurance and Bonding Companies Law only Insurance Companies authorized to operate in Mexico (a “Mexican Insurer”) are allowed to provide insurance within Mexican territory even to the extent that the practice of active insurance operations by non-authorized entities constitutes a crime, the contract will be null and the insured will be entitled to the reimbursement of the paid premiums.

Notwithstanding the latter, the Mexican Insurance Commission may grant a special authorisation to enter into an insurance agreement with a foreign insurer to the person who proves that none of the Mexican Insurers will carry out certain proposed insurance operations.

Proving that none of the Mexican Insurers is willing to cover certain risk seems hard to comply with, considering that this is a negative fact as well as the number of Mexican Insurers available in the market.

In AGB’s experience, the best way to prove that none of the Mexican Insurers is willing to carry out certain proposed insurance operations is to formally request from the Mexican Insurance Companies Association (Asociación Mexicana de Instituciones de Seguros “AMIS”) a confirmation that none of its members is willing to provide insurance to the requested risk.

Once said confirmation is obtained, it is possible to request and obtain from the Mexican Insurance Commission a special authorization to enter into an insurance agreement with a foreign insurer within Mexico.

In conclusion, notwithstanding the prohibitions imposed by the Mexican Insurance and Bonding Companies Law as well as the difficulties to be able to comply with the exception to said prohibition, it is possible to obtain authorization for foreign insurers to enter into insurance contracts in México.

For more information regarding regulatory aspects for the Mexican insurance market, please do not hesitate to contact Alvaro Adame (alvaro.adame@agb.mx) or Ramiro Besil (ramiro.besil@agb.mx).