The Chilean North American Chamber of Commerce (AmCham) warned that the eventual approval of a new annuity advance – contained in the draft of the fourth withdrawal of pension funds – would generate “a severe damage to the image of Chile” as an “attractive destination for foreign investment.”
The union said in a statement that the initiative – already approved by the Chamber of Deputies – is “a manifest sign of a weakening of the institutional framework, one of the main strengths that has allowed Chile to attract massive foreign investment in recent decades.”
“That is why today, when we must move towards sustainable and inclusive development, the commitment of all political and social actors to work under certain common standards is fundamental,” they added.
From AmCham they consider “that this new withdrawal of pensions and particularly of annuities weakens the institutional strength and credibility in compliance with the rules of the game, generating severe damage to the image of Chile as an attractive destination for foreign investment, so necessary for the economic recovery of the country.”
“We trust that in the Senate of the Republic the eyes set on the long term will prevail, understanding that the approval of a bill of these characteristics entails a severe damage to the confidence of Chilean institutions, impacting on foreign investment and contravening Free Trade Agreements signed by Chile,” said the union.
Recall that the Commission for the Financial Market (CMF) published a minute yesterday, in which they warned that the initiative “would put at risk the solvencies of life insurance companies (CSV)”.
“In the event that the maximum possible legal withdrawal is withdrawn, the CSVs would experience a loss ranging from 30% to 60% of their assets,” they warned.
“In this context, a minimum of 3, and a maximum of 9 CSV (total 15) would be under the minimum of regulatory capital. Additionally, in the scenario of maximum advance, 7 companies would face liquidity problems in a horizon of one year,” they added.