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Insurance in Panama: Superintendencia de Seguros licences, B/.5 million capital and the duty to insure local risks with local insurers

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Last verified: 2026-10-29 · Status: Stable

Insurers, brokers, agents and adjusters are licensed and supervised by the Superintendencia de Seguros y Reaseguros under Ley 12 de 2012. An insurer must put up B/.5,000,000 of capital in cash, build a legal reserve and pay a supervision fee of 0.50 percent of net premiums (B/.10,000 to B/.50,000). People and companies domiciled in Panama must insure property and persons located in Panama with authorised insurers, unless cover is unavailable locally or a treaty says otherwise, under a fine of ten times the premium.

Panama's currency, the balboa (B/.), is at par with the US dollar, which circulates freely; the Superintendencia de Bancos states that the balboa's value is on a par with the US dollar and that the dollar circulates without restrictions in commercial and financial transactions (checked 29 October 2026). USD figures therefore equal the balboa figures.

Key facts

Minimum cash capital for an insurer	5000000 PABLey 12 de 2012 art. 41, as of 2026-10-29 · in force
Insurer annual supervision fee	0.5 % of net written premiums (B/.10,000 to B/.50,000)Ley 12 de 2012 art. 67, as of 2026-10-29 · in force
Local risks must be insured with authorised insurers	Yes, with exceptions textLey 12 de 2012 art. 153, as of 2026-10-29 · in force
Fine for insuring Panamanian risks with an unauthorised insurer	10 times the annual premiumLey 12 de 2012 art. 276, as of 2026-10-29 · in force
Exchange rate used for USD conversions	1 PAB per USDBalboa at par with the US dollar (Superintendencia de Bancos); Ley 84 de 1904 art. 1, as of 2026-10-29 · in force

The rule

1. Companies carrying out insurance in any line, and surety business, plus insurance agents, account executives, sales agencies, independent adjusters, average surveyors, brokerage managers and brokers, are subject to prior authorisation and supervision by the Superintendencia de Seguros y Reaseguros, an autonomous state body.Ley 12 de 3 de abril de 2012 (actividad de seguros), arts. 1, 6, 2012-04-03 official text · verified 2026-10-29

2. Companies applying to operate, or operating, as insurers must constitute in cash a minimum capital of B/.5,000,000, invested in admitted assets and free of liens; the Board may review the amount every three years.
Cost to do it: B/.5,000,000 (US$5,000,000) of cash capital for an insurer.Ley 12 de 3 de abril de 2012 (actividad de seguros), art. 41, 2012-04-03 official text · verified 2026-10-29

3. Insurers must build a legal reserve of 20 percent of net profit before income tax until it reaches B/.2,000,000, then 10 percent until it equals 50 percent of paid capital, and may not pay dividends before making this provision.
Example: An insurer with B/.3,000,000 of pre tax profit sets aside B/.600,000 before declaring any dividend. / US$3 million profit, US$600,000 to the reserve.Ley 12 de 3 de abril de 2012 (actividad de seguros), art. 213, 2012-04-03 official text · verified 2026-10-29

4. Persons and companies domiciled in Panama must place all insurance on property and persons located in Panama with insurers authorised to operate in Panama, except where contrary to treaties, where the cover does not exist locally, or where local insurers refused it; the Superintendencia may then authorise cover abroad, subject to income tax withholding, and the authorisation must be registered.Ley 12 de 3 de abril de 2012 (actividad de seguros), art. 153, 2012-04-03 official text · verified 2026-10-29

5. Anyone who buys or sells insurance on property or persons located in Panama with a company not authorised to operate there is fined ten times the annual premium an authorised company would have charged, and the policy is void.
Example: Fronting a B/.20,000 property premium with an unauthorised foreign insurer risks a B/.200,000 fine and a void policy. / US$20,000 premium, US$200,000 fine.Ley 12 de 3 de abril de 2012 (actividad de seguros), art. 276, 2012-04-03 official text · verified 2026-10-29

6. Insurers pay an annual supervision fee of 0.50 percent of the previous year's net written premiums, minimum B/.10,000 and maximum B/.50,000; brokers that are legal persons pay 0.50 percent of commission income; reinsurance brokers pay 0.50 percent (B/.1,000 to B/.20,000).
Example: B/.6,000,000 of net premiums: B/.30,000 a year. / US$6 million of premiums, US$30,000.Ley 12 de 3 de abril de 2012 (actividad de seguros), arts. 67, 186, 233, 2012-04-03 official text · verified 2026-10-29

7. After authorisation the insurer has 30 calendar days to file its reinsurance contracts; reinsurers and reinsurance brokers not established in Panama must be on the Superintendencia's mandatory register, renewed annually with audited statements and an international credit rating.Ley 12 de 3 de abril de 2012 (actividad de seguros), art. 48, 2012-04-03 official text · verified 2026-10-29

8. Insurance consumers have basic non waivable rights, and since September 2026 these include not declaring a cancer history, nor having it taken into account, five years after the end of treatment without relapse; clauses that impose higher premiums or exclusions for such persons are abusive and absolutely void.Ley 547 de 2026 arts. 7 and 8, adding numeral 12 to art. 243 and numeral 7 to art. 246 of Ley 12 de 2012, arts. 243 numeral 12, 246 numeral 7, 2026-09-08 official text · verified 2026-10-29 · changed: Added by Ley 547 of 8 September 2026 (Gaceta Oficial 30607-E), in force the day after promulgation.

Worked example

A multinational wants its Panamanian plant (property in Panama) covered by the group's global policy written abroad. Art. 153 requires local placement with an authorised insurer, so it buys a local policy, often reinsured to the group's reinsurer registered with the Superintendencia.
Placing it directly abroad without Superintendencia authorisation exposes the buyer to a fine of ten times the premium and a void policy.
If no local insurer offers the cover, it documents the refusals and asks the Superintendencia for authorisation to insure abroad, applying the income tax withholding.

Step by step

Map which risks are located in Panama.
Place them with authorised insurers through a licensed broker.
Use registered reinsurers for fronting arrangements.
If cover is unavailable, collect written refusals and seek authorisation to insure abroad.
For a new insurer: cash capital of B/.5,000,000, 90 day temporary permit to register the company, licence, then reinsurance contracts within 30 days.

Common traps

The duty to insure locally applies to persons domiciled in Panama and to property and people located in Panama, not only to companies.
Payments to foreign insurers for authorised cover abroad can carry income tax withholding.
The B/.5,000,000 minimum can be revised by the Board every three years; check the current figure.

Sources

← Trusts in Panama: Ley 1 de 1984 trusts and the trust company licence of Ley 21 de 2017 (B/.150,000 capital, B/.250,000 guarantee)Consumer credit in Panama: finance company licences, effective rate disclosure, no interest on interest and the seven year credit bureau rule →

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