Profuturo, S.A.

MIGA issued its first private pension management fund guarantee to Citibank, N.A. and Citibank Overseas Investment Corporation's (COIC) $4.8 million investment in Profuturo S.A., Peru. Coverage will be provided against the risks of currency transfer, expropriation, and war and civil disturbance. COIC will own 20 percent of Profuturo, a Peruvian corporation, with the remaining 80 percent owned by Peruvian, Chilean, and Bolivian companies. Profuturo will be one of nine newly created companies offering private pension management programs as an alternative to the state-run social security program. The private programs expect to attract 1.1 million workers as subscribers, who will each contribute 10 to 20 percent of their salaries. Profuturo expects to obtain a significant share of that market.

The private pension program will increase national savings, create thousands of additional jobs (over 1,500 directly), revitalize the insurance sector, and facilitate the growth of Peru's capital markets. The private pension funds will be required to offer life and health insurance policies as well as pension guarantees to their subscribers-features not included in the state, run program. This requirement will spur the growth of the private insurance market in Peru.