Insurance and Reinsurance Alert - June 2026

By means of SBS Resolution No. 01454-2026, the Superintendency of Banking, Insurance and Private Pension Fund Administrators (“SBS”) has submitted for public consultation a draft regulation establishing Peru’s first specific regulatory framework for parametric insurance.

Deadline for comments: June 22, 2026.

Purpose: To establish a specific regulatory framework for parametric insurance, which has been developed internationally as a complementary risk-transfer mechanism for natural and catastrophic events. The draft regulation includes provisions regarding product design, commercialization, claims management, and regulatory oversight.

Key Aspects of the Draft Regulation:

1. Express Regulatory Recognition of Parametric Insurance

The draft regulation introduces a specific definition of parametric insurance and expressly recognizes that compensation is triggered when a pre-defined parameter reaches or exceeds a threshold established in the policy, without the need to demonstrate or quantify the actual loss suffered by the insured.

The proposal also recognizes the existence of basis risk, understood as the possibility that a discrepancy may arise between the losses actually incurred by the insured and the amount paid under the parametric coverage.

2. Limited Scope to Natural Risks

The proposed regulation limits the use of parametric insurance to risks associated with natural phenomena and catastrophic events that can be measured through objective and verifiable parameters.

Under this framework, coverage is triggered when the parameter linked to the insured event reaches or exceeds the threshold previously established in the policy. Accordingly, the insurer’s payment obligation is determined based on that measurement, without the need to prove or quantify the actual loss suffered by the insured.

For these purposes, the draft regulation requires that the parameters used be sourced from independent and recognized entities. It also contemplates the participation of data provider agencies, among other sources, to determine the value of the applicable parameter.

3. Target Market

The draft regulation is primarily aimed at public sector entities, large corporations, and other organizations with sufficient technical capacity to understand and manage this type of insurance coverage.

4. New Requirements for Product Design and Operation

The draft regulation establishes specific requirements regarding the use of objective parameters and independent sources of information, as well as the involvement of specialized parties responsible for monitoring and validating the data used to trigger coverage.

In addition, it introduces specific transparency obligations concerning the operation of the product, including disclosures on the parameters used, the trigger mechanisms, and the implications of basis risk.

5. Special Regime for Claims Management and Payment

One of the most significant aspects of the draft regulation is its specific framework governing the claims process.

Unlike traditional indemnity-based insurance, the proposal places responsibility on the insurer to continuously monitor the parameters established in the policy and to notify the insured when the coverage trigger has been met.

The draft regulation also provides for expedited timelines for notification and payment of compensation, prioritizing rapid response mechanisms following the occurrence of natural or catastrophic events.

6. Minimum Content Requirements

The draft regulation establishes the minimum content that must be included in both the insurance policy and its technical note, emphasizing the obligation to clearly define the parameters, trigger thresholds, and payout structure of the coverage.

It also requires the inclusion of essential information regarding the insured event, the methodology used to calculate compensation, and the key features of parametric insurance, including the implications of basis risk.