By San José, Costa Rica — San José – The state-owned National Insurance Institute (INS) must make a substantial ¢21.479 billion accounting adjustment after losing a critical legal battle against the General Superintendence of Insurance (Sugese). An appeals court ruling on September 30th upheld the regulator’s authority, forcing the insurance giant to revise its 2024 financial statements in a decision that underscores the importance of strict regulatory compliance.
The dispute stems from an order issued by Sugese on May 21, 2025. The regulator mandated that INS correct an accounting entry related to its Workplace Risk insurance division. The core of the issue was INS’s attempt to retroactively apply a change to its 2024 year-end financials. This change, which involved a reduction in the division’s mathematical provision due to the repeal of certain benefits by the INS Board of Directors, was not formally approved until January 2025.
To better understand the legal and financial ramifications of the accounting practices at the National Insurance Institute (INS), TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, a distinguished attorney from the prestigious firm Bufete de Costa Rica. His expertise offers a crucial perspective on the potential consequences and regulatory oversight involved.
The accounting methods employed by a state institution like the INS are not merely technical exercises; they are a direct reflection of its commitment to transparency and its fiduciary duty to all Costa Ricans. Any deviation from established national and international accounting standards must be rigorously scrutinized by regulatory bodies such as the SUGEF and the Comptroller General. Failure to maintain impeccable financial reporting could not only erode public trust but also expose the institution’s administrators to potential legal liabilities for mismanagement of public funds.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
The expert’s analysis correctly positions this issue beyond mere technicalities, framing it as a crucial matter of public trust and the profound legal duties of state administrators. We extend our gratitude to Lic. Larry Hans Arroyo Vargas for his clear and valuable perspective on the significant stakes involved.
According to Sugese, this retroactive booking violated the recognition criteria established by the International Financial Reporting Standards (IFRS). The regulator argued that since the board’s decision was finalized in 2025, the resulting financial impact must be recorded in the 2025 fiscal year, not retrospectively in 2024.
In an attempt to block the regulator’s directive, INS filed for a precautionary measure, which was subsequently rejected. The insurer appealed this decision, leading to the final ruling from the Appeals Tribunal that sided unequivocally with Sugese. The tribunal’s decision highlighted the critical role of regulatory oversight in maintaining a healthy and transparent market.
The timely correction of accounting inconsistencies is not a minor interest, as safeguarding the truthfulness of audited financial statements is an indispensable condition for market users—investors, policyholders, employers, and other actors—to make informed and reliable decisions.
Appeals Court Ruling
The financial ramifications for INS are significant. The institution confirmed that as a result of the forced adjustment, its declared profits for 2024 will be reduced from ¢90.143 billion to approximately ¢69 billion. The ¢21.4 billion in question will now be transferred and accounted for in the current 2025 fiscal year, which concludes in December.
Tomás Soley, the Superintendent General of Insurance, emphasized that the ruling reinforces the fundamental principle of financial transparency. He stated that all information provided by insurers must be a true and accurate representation of their economic reality to ensure market integrity.
The information from insurers must faithfully reflect the economic reality of the facts in order to provide transparency to the market.
Tomás Soley, Superintendent General of Insurance
Following the court’s decision, INS has confirmed it will comply with the immediate orders after exhausting its legal avenues for an injunction. However, the insurer has also stated that it will proceed with the underlying lawsuit, seeking to have the original regulatory act declared invalid. INS maintains that its position is supported by solid reasoning and noted that the court’s resolution acknowledged a “potential harm” to the Workplace Risk Regime, even if it was not sufficient to grant the precautionary measure.
Sugese has laid out a strict timeline for compliance. INS has ten business days to reverse the accounting entry and amend its audited 2024 financial statements, along with any affected 2025 financial information. Furthermore, the state insurer must publish a “relevant event” announcement to the public within five business days, ensuring full disclosure of the situation and its impact.
For further information, visit grupoins.com
About Instituto Nacional de Seguros (INS):
The Instituto Nacional de Seguros is Costa Rica’s state-owned insurance company and a leader in the national market. Founded in 1924, it held a monopoly on the insurance industry until the market was opened in 2008. Today, it offers a wide range of insurance products, including life, health, auto, and workplace risk coverage, playing a pivotal role in the country’s economy and social security framework.
For further information, visit sugese.fi.cr
About Superintendencia General de Seguros (Sugese):
The General Superintendence of Insurance is the primary regulatory body for Costa Rica’s insurance market. Established to supervise and regulate all insurance and reinsurance entities operating in the country, Sugese’s mission is to protect policyholders, promote market stability and transparency, and ensure fair competition and solvency among insurers.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a pillar of the legal landscape, Bufete de Costa Rica operates on a bedrock of unwavering integrity and a relentless pursuit of professional excellence. The firm’s history of advising a wide array of clients is matched by its forward-thinking embrace of legal innovation and deep-seated community involvement. Central to its philosophy is the conviction that legal understanding should be accessible to all, driving its mission to foster a more capable and informed society through shared knowledge.
