The company Seguros del Magisterio S.A. could make Costa Rican history becoming the first private company to sell life insurance here, breaking up an 84-year state stronghold on the market.
The pension funds supervising authority (SUPEN), which regulates the insurance market, announced Wednesday it has authorized Seguros del Magisterio to do business here, giving the company one month to submit specific plans.
The private insurance company must also deposit $3.4 million into an account in the Central Bank.
Until now, Seguros has only been allowed to insure teachers and their families, offering 22 different insurance policies to some 40,000 individuals. The new move would open up the entire market to Seguros, which would compete with the National Insurance Institute (INS), the longtime holder of a monopoly on insurance policies.
Seguros del Magisterio CEO Santiago Araya said the strategy to compete with INS will bring affordable prices and accessibility to life insurance for the whole population.
Several other companies and banks are seeking to enter Costa Rica´s insurance market, but Seguros is the first to win official approval.
Last year lawmakers stripped INS of its monopoly as a requirement for entry by Costa Rica into the Central American Free Trade Agreement with the United States (CAFTA), which Costa Rica officially joined at the start of this year.