What is portfolio transfer?

The transfer of insurance contracts between insurance companies, insurance brokers or similar is known as portfolio transfer. In this way, the different insurance companies insure the risk they incur with their users while redirecting them to one company or another depending on their specialization.

Among the data that are transferred are: the personal data of the person who requested the contract, the contractual part of the contract, the applicant, the beneficiary, the risks of the operation, some points that were agreed between the insurance company and the applicant and deemed necessary, etc.

The portfolio transfer management must be approved by the Ministry of Finance, Finance and Economy (depending on the country). In addition, it must have sufficient technical provisions and a high level of solvency.

Procedure to approve the portfolio transfer

It must be done before the General Directorate of Insurance, with:

  • Certification of portfolio transfer agreements
  • The portfolio transfer agreement with a series of documentation. These are: information elements of asset y passive that are yielded; date of assignment; price of the agreement.
  • Situation balance, as well as the profit and loss account.
  • Coverages that are assigned: calculation and amount.
  • Updated solvency margin.

The Ministry of the country in question will authorize the transfer, going to a public deed, referring to the General Directorate of Insurance. After that, a liquidation must be carried out in the entity as the last phase of this process. The corresponding Ministry will be in charge of carrying out all the appropriate powers regarding the management and supervision of the entity in liquidation, being able to oversee the administration and accounting of intervened entities if it sees fit.

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