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DOMINICAN REPUBLIC ABOUT THE DOMINICAN REPUBLIC The Dominican Republic is a nation located in the Caribbean island of Hispaniola. Part of the Greater Antilles archipelago, Hispaniola lies to the west of Puerto Rico and east of Cuba and Jamaica. Its western third is the nation of Haiti, making Hispaniola one of two Caribbean islands which are occupied by two countries, Saint Martin being the other. Government and Politics The Dominican Republic holds elections every four years at the congressional levels as well as every four years at the presidential levels. The country has become highly politicised, as millions of dollars are spent in propaganda and campaigning. The political system is characterised by clientelism, which has corrupted the system throughout the years. There are many political parties and interest groups and, new in this scenario, civil organisations. The three major parties are the conservative Social Christian Reformist Party (Spanish: Partido Reformista Social Cristiano [PRSC]), in power between 1966–78 and 1986–96; the social democratic Dominican Revolutionary Party (Spanish: Partido Revolucionario Dominicano [PRD]), in power in 1963, 1978–86, and 2000–04); and the increasingly conservative Dominican Liberation Party (Spanish: Partido de la Liberación Dominicana [PLD]), in power between 1996–2000, 2004 -2008 and recently re-elected for 2008 -2012. The presidential elections of 2008 were held on the 16th May 2008, with incumbent Leonel Fernandez winning with 53% of the vote. This would be Fernandez’s third, and his second consecutive, term. Fernández and the PLD are credited with a number of initiatives which have moved the country forward technologically, with the completion in 2008 of the Metro Railway ("El Metro") in the Dominican Republic, as well as a number of other accomplishments in the international arena.Foreign Relations The Dominican Republic maintains close relations with the nations of the Western Hemisphere and the principal nations of Europe. Relations with the U.S. are very close. The country is a member of the following international organisations:[ACP, Caricom (observer), ECLAC, FAO, G-77, IADB, IAEA, IBRD, ICAO, ICC, ICCt, ICRM, IDA (graduate), IFAD, IFC, IFRCS, IHO (suspended), ILO, IMF, IMO, Intelsat (or ITSO), Interpol, IOC, IOM, IPU, ISO (correspondent member), ITU, ITUC, LAES, LAIA (observer), MIGA, NAM, OAS, OPANAL, OPCW (signatory), PCA, Rio Group, UN, UNCTAD, UNESCO, UNIDO, Unión Latina, UNOCI, UNWTO (or WToO), UPU, WCO, WFTU, WHO, WIPO, WMO, WTO (or WTrO). Economy The Dominican Republic is the largest economy in the Central American and Caribbean region. It is a lower middle-income developing country primarily dependent on natural resources and government services. Although the service sector has recently overtaken agriculture as the leading employer of Dominicans (due principally to growth in tourism and Free Trade Zones), agriculture remains the most important sector in terms of domestic consumption and is in second place, behind mining, in terms of export earnings. Real estate tourism alone accounted for $1.5 billion in annual earnings. Free Trade Zone earnings and tourism are the fastest-growing export sectors. Remittances ("remesas") from Dominicans living abroad are estimated to be more than $2 billion dollars per year. The Dominican peso (DOP) is the national currency of the country, although U.S. dollars (USD) are accepted at most tourist sites, and many other economic activities. The peso was worth the same as the USD until the 1980s, but has depreciated. The exchange rate in 1993 was 14.00 pesos per USD and 16.00 pesos in 2000, but it jumped to 53.00 pesos (average) per USD in 2003. In 2004, the exchange rate was back down to around 34.00 pesos per USD, and has maintained stable since. The U.S. dollar is implicated in almost all commercial transactions of the Dominican Republic; such informal dollarisation is common in high inflation economies. BRIEF HISTORY OF THE INSURANCE MARKET IN THE DOMINICAN REPUBLIC The history of insurance in the Dominican Republic goes back to the 1910-1920’s when the Canadian company Sun Life Insurance & Crown Life was established in the country, followed by the Confederation Life and Association, which were pioneers in the field of life. About the same time other entrants in the market were other international insurance companies among which were “La Caridad” “B. Pretzman-Argerholm, C.xA.”, and “American Life Co., Alico”. At the same time “La Compañia Nacional de Seguros, C. x A” was founded, the most prosperous Dominican company at that time and that introduced the modern insurance we know today as the Universal Life Insurance. With the establishment of these companies, the Law No 68 on Private Insurance came into effect on 1930 and with the entry of this law it began to awaken the national consciousness in insurance. This law regulates the establishment of companies in the Dominican Republic territory, some rules on fire and creates the post of Superintendent of Insurance Department, at the time under the supervision of the Ministry of Finance. On the 20th March 1931 the Law No 96 was promulgated, replacing Law No 68 and extending provisions which guarantee the interests of insurers and under this same law a group of twelve companies were authorised to operate in the country. In 1932 “San Rafael C.xA.” the first insurance company with official character is founded. The 1960-1970 season is the one that marks the true development of the industry, where thirty insurance companies there were authorised to operate in the country thirty, all of them from different lines, among which we can quote “Seguros Americas” founded in 1966, related to risks and general line insurance, and followed in 1974 by the creation of “Americana, S. A.”, operating in the life insurance sector. Due to the developments in the insurance market, Law No 400 of the 4th January 1969 the Dominican Insurance Superintendence was passed, which is still responsible for the implementation and administration of the legal regimen of the insurance companies in the Dominican Republic, under the tutelage and dependence of the Ministry of Finance. Also as a result of the promulgation of Law No 400, Law No 126 on private insurance was enacted on the 20th March 1971. At the same time, in its chapter No. 16 the Advisory Board of Insurance was also created. When this law was considered obsolete there was a series of amendments which subsequently resulted in the enactment of a new law No 146-02 dated the 26th September 2002 on Insurance and Bonding in the Dominican Republic which combines Law No 126, on Private Insurance, Law No 4117 on Compulsory Vehicle Insurance and its amendments, and the Law No 116 on Taxes relating to Bondings of Insurance Companies. In line with further developments within the insurance market, in 1972 a group of entrepreneurs in this sector, constituted an important body, The Chamber of Insurers of the Dominican Republic, currently known by the acronym (CADOAR), Dominican Chamber of Insurers and Reinsurers (Spanish: Camara Dominicana de Aseguradores y Reaseguradores), was founded, significantly improving the growth of the industry and the well recognising the reputation of the international reinsurance community. State intervention in the insurance, is to control and regulate the affairs of private companies, on their developments themselves, and their relations with the insured. The State, through its intervention with the enacted laws, has outlined a clear business insurance, striking a balance between the interests at stake in the contract, as well as the legal institution responsible for monitoring and punishing such economic activity. DOMINICAN INSURANCE MARKET SHARE The insurance market of the Dominican Republic is formed of more than 30 different companies; the first ten insurance companies are the ones below:
INSURANCE MARKET SHARE , as of AUGUST 2007 
Information provided by the Dominican Insurance Superintendence DOMINICAN INSURANCE MARKET STATISTICS The insurance market of the Dominican Republic has experienced a continuous growth. By the end of year 2006 the total amount of premiums billed reached the amount of DOP17,242,407,794.00, showing an increase of 19.58% compared to year 2005. COMPARATIVE CHART OF PREMIUMS BY LINES, JANUARY – DECEMBER, 2005 - 2006
Information provided by the Dominican Insurance Superintendence 
By August 2007, the total amount of premium developed by the industry was DOP12,912,325,145 and had already grown a 16.24% in premiums compared with the period January – August, 2006 – 2007, with the most significant increases in the sectors of Group Life, Marine & Aviation, and Motor Vehicles. Below is an estimate of the development of the market based on the premiums perceived per insurance line, by August 2007. COMPARATIVE CHART OF PREMIUMS BY LINES, PROJECTION JANUARY - DECEMBER, 2006 - 2007
Information provided by the Dominican Insurance Superintendence 
In addition to this information, is important to state that the insurance industry in the Dominican Republic has responded very well indeed to many catastrophic occurrences and has maintained prestige and credibility among consumers. It is imperative to note that the new social security system under the law 87-01 has shaped a mandatory transformation on the health insurance lines, creating new entities as “Administradoras de Riesgos de Salud” , (Acronym: ARS ) to handle the health insurance lines, and a new official regulatory institution called “ Superintendencia de Seguros y Riesgos Laborales”, SISALRIL. Also a transformation has happened with the Pension fund, under the same law 87-07 for the new Social Security System. As a last consideration, it is important to highlight the fact that there is a non-admitted market segment of unknown statistics contracting in lines such as international life, health and property insurances. This non-admitted niche has developed due to the lack of adequate tax incentives, and other restrictions of such products in the local market. In preparing this Spotlight article we have received invaluable assistance from Franco Fernandez & Asociados SA, Santo Domingo (www.francofernandez.com) for which we are grateful. If you would like Worldwide Risk Solutions to conduct an economic, business and insurance survey of any international markets please contact us – Details below. Worldwide Risk Solutions has access to a wide client base of internationally oriented organisations. Why not utilise this knowledge and experience? We can conduct a swift appraisal of your global activities or answer any questions you may have about international developments. Call +44 (0)1444 450 919 or send us an e-mail and we will respond immediately. And should you be passing through London, please let us know. In our next e-newsletter we will feature a Spotlight article on Israel. Always in the news, this country has been developing a healthy insurance market. What has happened there will make interesting reading. In our next edition of WoRdS we will look at a bit of the history and what is going on there today. For more information about any of the items discussed in the current or previous issues of WoRdS, please see our Contact Details George Worsley, Director |
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