The 84 year old insurance monopoly run by the Instituto Nacional de Seguros (INS) in Costa Rica is now officially open to competition. President Oscar Arias signed the bill enacting the changes on July 22nd.
The law permits INS to begin operating internationally and to capitalize its profits. Also, the law creates an insurance regulator who will define when new entrants will be allowed to begin operations within Costa Rica. Businesses wishing to sell personal insurance will require a 3 million dollar minimum in capital in order to operate in the country. Where re-insurers are concerned, in order to come into the market, they will need to have a minimum of 10 million dollars in capital. 4% of all of the collected payments from insurance sales will go toward financing the firefighters.
Lifting the INS monopoly is one of the requirements of the Central American Free Trade Agreement with the US (CAFTA), which Costa Rica signed in October 2007.