Mexico Insurance Information

CIA link to demographic/economic data on Mexico

General Mexico Insurance Information

• Compulsory Insurance:
  Employee Benefits - compulsory Mexican Social Security Scheme.
• Non-Admitted Insurance:
  Prohibited except by special permission from the Ministry of Finance.
• Policy Wordings & Rates / Tariffs Controlled:
  Forms are to be submitted to the authorities for approval. From 1990 Insurers are free to use rates in accordance with their solvency requirements. Riot and Earthquake are subject to tariffs.
• Policy Language:
  Spanish but English translations are available. The Spanish policy(ies) control in the event of a dispute.
• Types of Insurance Restricted to Government Institutions:
  Workers’ Compensation as it relates to the Social Security Scheme.
• Policy Currency:
  Mexican peso (MXN). U.S. $ insurance is available but rare.
• Currency Restrictions / Exchange Controls:
  No restrictions.
• Policy Period:
  Annual.
• Cancellation Provisions:
  Subject to written notice. See Policy Cancellation Provisions. Policies can be canceled if premium is not paid within 30 days of inception.
• Premium Tax, etc. paid by Insured:
  
  15% VAT plus small policy issuance fees with the exception of agricultural coverages.
• Insurance Companies:
  No Insurer may operate directly in Mexico unless licensed. Extreme penalties apply.
• Brokers:
  Brokers control the industrial / commercial sector of the market.
• Brokerage Commissions:
  Fire - 0-30%;
  Earthquake - 7.5%;
  Liability - 0-24%;
  Automobile - 10%.
  (Note: If Belgian brokers are involved in placing business with foreign insurers relating to business placed in Belgium they are responsible for ensuring that the taxes are paid. If the insurer concludes insurance contracts without the intervention of a broker, the tax representative of the foreign insurer is responsible.) Commissions cannot be paid to brokers not licensed locally.
• Broker of Record Letters:
  Required for the transfer of business from one broker to another.
• Reinsurance:
  Reinsurance cessions should preferably be made to the Mexican market; however, cessions abroad are permitted providing they are authorized. The restriction does not apply to Marine, Life, Accident and Health. A remittance tax of 2%
• Local Natural Hazards:
  Earthquake.
• Other Information:
  

Property Insurance

• Fire:
  Standard fire perils include - fire, lightning and explosion. Aircraft, earthquake, flood, storm / tempest, burst water pipe, riot / civil commotion, malicious damage, windstorm / hurricane, vehicle impact are available in the market for an additional premium charge.
• All Risk:
  Available.
• Coinsurance:
  100%, 90%, 80% available.
• Blanket Insurance:
  Available but rarely written.
• Business Interruption:
  Standard local forms.
• Replacement Cost:
  
  Available.
• Discount for fire protection equipment / systems: Available.

Boiler & Machinery / Machinery Breakdown / Engineering

• Wordings:
  Follow U.S. and UK forms.

General / Public Liability

• Available Wordings:
  Similar to U.S. Comprehensive General Liability form with extensions for Product Liability, Contractual Liability, Tenant’s and Neighbor’s Liability, etc. Product Recall coverage is available.
• Comments:
  Policies are written on either an occurrence or a claims made basis. Defense costs are usually provided by the policy and the costs are generally within the limits.

Automobile / Motor

• Compulsory Limits:
  Not compulsory (except in the City of Monterrey). By market agreement there are certain minimum limits. Defense costs are outside the limits. Coverage applies to the Insured and any licensed individual driving with the Insured’s permission. Passengers are not covered as they are not considered Third Parties.

Workers’ Compensation

• Comments:
  All employees are protected by the Social Security Scheme. Most large companies purchase an excess coverage. Extra-Territorial, Medical Expenses and Occupational Disease benefits are included under the Scheme.

Marine

• Available Wordings:
  Imported cargo must be written by a locally licensed Insurer. Forms follow the Institute of London Underwriters. War risk rates follow London scale.

Crime

• Available Coverages:
  Commercial Blanket and Position Fidelity forms available. Also, burglary, robbery, and a variety of bonds.