Argentina puts risk-based supervision under spotlight

Argentina's insurance watchdog SSN outlined steps needed to switch over to a risk-based supervision model.

Adopting this framework is among the aims of the regulator, which is working to modernize and expand the sector.

"We start with a foundation: draw up a roadmap and risk matrix, issue corporate governance rules and align with international financial information and solvency standards," SSN financial analysis division official Manuel Urdiroz said during a conference hosted by Argentina's federation of professional associations of economic science practitioners (FACPCE).

"Once we've got that, we'll advance toward a risk-based supervision model, which involves a complete change in the form of supervision," he said.

Urdiroz added that, for this to happen, information such as premiums, claims, solvency and financial data needs to be exchanged via the government's electronic document management system known as GDE. "This will allow us to build an early-warning system and monitor company data as soon as it becomes available so that action can be taken."

In April, Argentina and the US Department of the Treasury signed a two-year cooperation agreement encompassing various areas, including risk-based supervision standards.

Lawmakers in neighboring Chile have dusted off draft legislation that establishes a risk-based supervisory model for the local industry. The bill had been sitting dormant in congress since 2011.