COLOMBIA Law and Practice Contributed by: Rebeca Herrera Diaz, Rebeca Herrera Abogados
Law 1607 of 2012 included a section under Article 468 of the ET establishing a special 5% IVA rate for agro and health insurance policy premiums (nums. 2 and 3 of Article 468-3 of the ET). Article 476-1 of the ET establishes that the premium of insurance services purchased from foreign insurers acting in the Colombian territory on a cross-border basis must include the IVA when the tax regulation of the country of origin of the insurer does not include such tax. If the insurer’s home jurisdiction does have a comparable tax but at a different rate, the tax pay- able in Colombia is the difference between the tax already paid abroad and the amount that would be due in Colombia. 3. Overseas Firms Doing Business in the Jurisdiction 3.1 Overseas-Based Insurers or Reinsurers Colombia’s approach to overseas insurers and rein- surers operating within the country or with Colombian residents largely aligns with the market access condi- tions prevalent in other regional nations. Colombian insurance regulation operates on the principle that only authorised and domiciled insurers may conduct insurance business within Colombia. However, there are exceptions. Foreign insurers offering international commercial marine and aviation insurance (including insurance for goods in interna- tional transit) and those providing satellite insurance are permitted to underwrite insurance in Colombia on a cross-border basis, provided they are registered in RAIMAT, which the SFC maintains. Similarly, foreign insurers offering agricultural insurance can operate cross-border in Colombia if registered in RAISAX, which is also maintained by the SFC. As outlined in Article 39 of the EOSF, which incor- porates provisions from Law 1328 of 2009, foreign insurers not registered in RAIMAT or RAISAX are pro- hibited from soliciting or promoting their services in Colombia or to Colombian residents. Accordingly, Colombian residents may purchase insurance from overseas insurers (excluding mandatory insurance, social security-related insurance, and insurance con-
nected to public entities) as long as they travel to the insurer’s country of origin to complete the process. The reinsurance market in Colombia is broadly acces- sible, with foreign reinsurers playing a dominant role by accepting risks from Colombian cedents abroad. For- eign reinsurers may underwrite reinsurance for Colom- bian cedents in all business lines on a cross-border basis, provided they are registered in the Registry of Foreign Reinsurers and Reinsurance Intermediaries (REACOEX), maintained by the SFC. As foreign rein- surers are not directly supervised by the SFC, placing reinsurance with an unregistered reinsurer does not result in penalties for the reinsurer itself. However, the Colombian insurance company acting as the cedent is significantly affected. In such cases, the cedent can- not reduce its provisions for the specific risk based on the reinsurance placement and must retain 100% of the risk, potentially leading to regulatory insolvency. Foreign reinsurers can promote their business in Colombia after registering with REACOEX and estab- lishing a commercial presence by licensing a repre- sentative office. Although the REACOEX is a regis- try, obtaining it has become more difficult in recent years because the requirements for it are set out in the Basic Legal Circular (CE 006 of 2025), but the SFC can request additional information. In many cases, in addition to what is required by the Circular, the SFC requires full disclosure of all the foreign reinsurer’s business strategies in Colombia and abroad, a list of all the jurisdictions in which the reinsurer undertakes activities, and other requirements aimed at undertak- ing a full diligence of the reinsurer. Additionally, CE 006 of 2025 introduced a new require- ment for registration applications, namely the submis- sion of a certification confirming that the host country of the foreign reinsurer has AMLFT laws and authori- ties. This new requirement applies to RAIMAT, RAISAX and REACOEX. Brexit has not resulted in any changes to these market access conditions, as the regulations apply uniformly regardless of the foreign reinsurer’s country of origin.
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