Peru Watch: Pension rules, SOAT claim notification

Peru's financial services watchdog SBS is slashing the number of pension products available to private pension fund members.

SBS has published amended industry rules, which enter force on 1 October.

Under the new regulations, the number of products in each pension category - retirement, disability, and survivors - is cut by about 75% to 31, 27 and 27, respectively.

A central aim of the change is to remove from the market little-used products and help simplify the decision-making process for fund members, SBS said in a statement.

SBS had said in March it was considering such a move.

In Peru, members, on retirement, can take out a full pension plan or withdraw up to 95.5% of their pension savings - or combine both options. The right to withdraw up to 95.5% was introduced in 2016 following approval of a controversial pension reform bill.

Since the scheme entered force and June this year, 188,665 members opted to withdraw 95.5% of their savings, accounting for 94.03% of the total, SBS said. Those who chose to take out a pension and obtain a lump sum accounted for 9,709, or 4.84%, while those who opted for a full pension accounted for 2,277, or 1.13% of the total.

Around this time last year, 100,000 members had withdrawn the maximum amount allowed by law.

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SBS has introduced new rules governing notifications of unclaimed insurance payouts stemming from fatal traffic accidents.

The updated regulations correspond to mandatory traffic accident insurance, or SOAT as it is known locally, and public transport accident insurance, better known as Cat.

Soat policies are issued to motorists directly by insurers, while Cat coverage is provided to public transport operators through specially established companies, known as Afocats.

Under the rules, Cat and Soat providers are required to contact beneficiaries of unclaimed death payouts following a road traffic accident involving a covered vehicle. These firms are required to try to contact beneficiaries within 15 days of death. They are required to provide details of the accident and their right to claim and documentation that must be supplied.

If a firm finds out about the death more than 15 days after it occurred, it has five days from the day it was made aware of the fatality to send out communications, SBS said in a statement.

If attempts to contact the deceased's family directly, through the likes of a letter, fail, the provider must resort to placing notices in national or regional media.

SBS had published the draft regulations in February.