Superfinanciera, Colombia’s Financial Superintendence that oversees banking and insurance operations, has issued Resolucion 0130 de 2016, a cease and desist order against Cooper Gay Ecuador C.A. Intermediario de Reaseguros, demanding that they suspend all reinsurance intermediation within Colombia.
The Superintendence affirmed that reinsurance brokerage (intermediation) may only be carried out in Colombia by reinsurance brokers with prior authorization by Colombian regulatory authorities, or foreign brokers outside Colombia that are members of REACOEX (Registro de Reaseguradores y Corredores de Reaseguro del Exterior). REACOEX is Colombia’s foreign reinsurance registry..
Apparently the problem arose because Cooper Gay’s Ecuador subsidiary was authorized as a foreign broker based in Ecuador to operate in Colombia, but once the firm opened an office in Bogotá with a physical presence in Colombia, the firm had to register as such and could not simply use the REACOEX to operate from within the country.
When contacted by Finance Colombia, Cooper Gay issued a statement clarifying their position on the situation:
Cooper Gay Ecuador C.A. Reinsurance broker has been registered in the REACOEX since February 15th, 2015, which empowers it to act as a reinsurance intermediary for reinsurance contracts with entities incorporated in Colombia. Cooper Gay Ecuador has historically maintained an office in Bogota Colombia for the purpose of providing backup support to clients in countries other than Colombia. This office has never carried out marketing or sales work nor commercial reinsurance broking activities for clients within Colombia.
Following a complaint, the Financial Superintendence of Colombia conducted a visit to Cooper Gay Ecuador’s Bogota office and has issued a resolution informing that Cooper Gay Ecuador was conducting commercial reinsurance broking activities from its Bogota office exceeding powers granted under its registration in the REACOEX.
Cooper Gay Ecuador denies that it undertook activities exceeding powers granted under its registration in the REACOEX. Cooper Gay Ecuador, while denying any wrongdoing, immediately complied with the resolution and closed the Bogota office on February 11th 2016.
Colombia remains an important market to the Cooper Gay group and customers in the country will continue to receive the highest levels of service through Cooper Gay Ecuador, which is registered under REACOEX and therefore is authorized to conduct reinsurance broking activity in Colombia from Ecuador.
Cooper Gay Ecuador is a subsidiary of Cooper Gay Swett & Crawford, one of the largest global wholesale, reinsurance, and specialty lines brokers and managing general agents. The company’s world headquarters are in London. In November the firm announced plans to sell off its North American operations, with the exception of the Miami hub office from which it manages its Latin America operations.
Photo courtesy: Superfinanciera