FINANCIAL SERVICES ADVISOR a PUBLICATION of the DIALOGUE May 23-June 5, 2019

LATIN AMERICA ADVISOR FINANCIAL SERVICES ADVISOR A PUBLICATION OF THE DIALOGUE www.thedialogue.org May 23-June 5, 2019

BOARD OF ADVISORS FEATURED Q&A TOP NEWS Ernesto Armenteros Vice Chairman of the Board, BANKING Banco de Ahorro y Crédito Unión What Factors Are Santander Hiring Pablo Barahona President & COO, New Tech Staff Global Retail Markets West, Liberty Mutual Group Driving Mexico’s for Brazil Unit Felipe Carvallo Spain’s Banco Santander is hiring Vice President - Analyst 400 new technology staff employ- Latin America Banking Insurance Sector? Moody’s Investors Service ees in Brazil. The move is part of the bank’s $2 billion investment Richard Child plan to boost digital operations. CEO, Mattrix Group Page 2 Michael Diaz Jr. Partner, REMITTANCES Diaz, Reus & Targ Ernesto Fernández Holmann Remittances to Chairman of the Board, El Salvador Hit Ayucus Rich Fogarty $1.78 Bn for Year Managing Director, Through April Alvarez and Marsal The amount of money transfers Desiree Green Insurance companies have significant opportunities for growth in Mexico, ratings agency A.M. to the Central American country Vice President, Best said in early May. // File Photo: Pictures of Money via Creative Commons. International Government Affairs, rose 3.9 percent year-on-year, the Prudential Financial central bank said. El Salvador’s Earl Jarrett Mexico continues offering insurance companies significant remittances predominantly come Chief Executive Officer, opportunities for growth, ratings agency A.M. Best said in from the United States. The Jamaica National Group Page 3 a report released May 6. The introduction of the Solvency Thomas Morante Chair, Insurance Regulatory & Q II-based regulatory framework in the country’s insurance in- BANKING Transactional Practice Group dustry has not become a limiting factor for the sector, the report added. Kaufman, Dolowich & Voluck What are the major drivers of growth in Mexico’s insurance sector? What Caixa Offering Manuel Orozco Director, effects is Solvency II having on insurers operating in the country? What Discounts for Migration, Remittances & Development, Delinquent Inter-American Dialogue headwinds could Mexico’s insurance sector face in the future? Adalberto Palma-Gomez Loan Payoffs Senior Partner, Manuel S. Escobedo, president of the Mexican Association Brazilian state-owned lender Caixa Proxy, Gobernanza Corporativa Econômica Federal will offer of Insurance Companies (AMIS): “In any industry, financial Rodolfo Pittaluga borrowers discounts to pay off Adjunct Professor, stability is fundamental for growth. Mexico has enjoyed this delinquent loans, said CEO Pedro Florida International University Guimarães. College of Law for almost 25 years, and although GDP hasn’t grown signifi- A Page 2 Fabian Saide cantly, it has maintained a positive stable trend most quarters. The public Founder, CEO and President, sector is very important and represents about one-fifth of Mexico’s insur- Paykii ance market. With the state as the last-level guarantor and as a public risk Jan Smith Partner, manager, it has a fundamental role in the development and penetration of KoreFusion the sector. The insurance sector has been working with the Finance Min- Roberto Teixeira da Costa Founder & Board Member Emeritus istry to propose a risk-management public policy within the framework CEBRI of article 4 of the agreement with the IMF. Once this policy materializes, Mario Trujillo it will be invaluable to align, coordinate and structure risk management CEO, DolEx Dollar Express work of all areas of government and the interaction between government and the private sector. We trust that the effect will be to enhance the efficiency of risk management in the country and, in this context, promote the penetration of insurance. The last effect of Solvency II (SII) must be to empower companies to manage their risk in a self-regulated manner. Guimarães // File Photo: Caixa Econômica Federal. Continued on page 3

BANKING NEWS quisitions which, from our standpoint, generat- NEWS BRIEFS ed the miss,” Barclays analyst John Aiken said Scotiabank Misses in a note. Canada’s two largest lenders, Royal Brazilian Prosecutors Bank of Canada and Toronto-Dominion Bank, Consider Civil Suit also recently reported jumps in provisions. Analysts Estimates Against Banco Bradesco for Quarterly Profit Santander to Hire Brazilian prosecutors are considering a civil lawsuit against Banco Bradesco as they sus- Toronto-based Bank of Nova Scotia missed an- New Tech Staff pect it failed to prevent corruption schemes, alysts’ profit estimates for its second quarter, Valor Econômico reported May 30. Prosecutors which ended in April, due to surging noninterest for Brazil Unit have asked a court for an arrest warrant for expenses and higher provisions for bad loans, two Bradesco bank managers in connection to Reuters reported May 28. Scotiabank, Canada’s Spain’s Banco Santander has announced an alleged scheme involving shell companies, third-largest lender, has the biggest overseas that it plans to hire 400 new technology staff fraudulent checks and bank slips that helped presence among the country’s major banks and members for its Brazil unit, ZDNet reported launder nearly 1 billion reais ($252 million). has been focusing on Latin American units, in- June 3. The announcement is part of the Prosecutor Eduardo El Hage said Bradesco bank’s $2 billion investment plan to boost its should have noticed such financial transac- digital operations in its markets around the tions. Scotia’s earnings were world, the technology news website reported. negatively affected Santander’s operations in Brazil account for by provisions related 30 percent of that investment, the bank said. Brazil’s Caixa to Offer to acquisitions which, Santander is planning to hire Java, Android and from our standpoint, iOS developers, as well as artificial intelligence Borrowers Discounts to generated the miss.” and data engineers. The bank is seeking to Pay Off Delinquent Loans hire new technology employees for positions — John Aiken Brazilian state-owned lender Caixa Econômi- ranging from entry-level to management jobs, ca Federal will give discounts of between most of which will be located in São Paulo at a 40 percent and 90 percent to indebted retail cluding Mexico, Peru, Chile and Colombia. The Santander campus known as “Digital Genera- clients on their delinquent loans, CEO Pedro bank reported adjusted net profit attributable tion.” The bank launched the campus last year Guimarães told reporters on May 21, Reuters to shareholders of 2.08 billion Canadian dollars as a central location for its technology staff. reported. The move seeks to raise as much ($1.55 billion), or 1.70 Canadian dollars per as 4 billion reais, or roughly $990 million. share. That compares to 2.06 billion Canadian Guimarães added that the measure would raise dollars, or 1.71 Canadian dollars per share a additional revenue, as such loans had already year earlier. On average for the lender’s fiscal been written off, and allow the bank to offer second quarter, analysts had expected profit new products and services to clients after they of 1.74 Canadian dollars per share. The profit pay off their loans. miss was Scotiabank’s third in a row. At the same time it reported its profits, the bank also forecast low single-digit growth in its mortgage portfolio, saying the domestic housing market Evo Payments, Chile Bci Aguiar // File Photo: LinkedIn. had experienced a slow start. Scotiabank Form Joint Venture said its adjusted noninterest expenses rose “We offer competitive pay, as well as profes- 7.7 percent year-on-year in the fiscal second sional development opportunities in a working Atlanta-based Evo Payments and Chile’s Banco quarter to about 4 billion Canadian dollars. It’s environment that is dynamic, motivating and de Crédito e Inversiones, or Bci, are forming loan-loss provisions jumped 35 percent to 722 challenging,” said Marino Aguiar, the bank’s a 10-year joint venture that will make Evo the million Canadian dollars. The rise in provisions technology executive director. The move to first international merchant acquirer to enter followed recent acquisitions by the bank, which more digital offerings has been a major focus the South American country through partnering included Canadian insurance provider MD of Brazilian banks. Mobile banking in the South with a national financial institution. Chile’s Financial Management and the Jarislowsky American country increased 24 percent last payments market was established with the Fraser investment firm. “Scotia’s earnings were year as compared to the year before, accord- creation of one acquiring and issuing proces- negatively affected by provisions related to ac- ing to a study that Deloitte carried out for the sor, Transbank. Chilean regulators recently announced legislation that will open the market.

Brazilian Banking Federation, Febraban. Six FEATURED Q&A / Continued from page 1 of every 10 banking transactions in Brazil are carried out with a computer or a mobile device. The process is on the right track. Howev- opportunities. In addition, many Mexicans er, the learning curve is relevant. The SII lack health coverage. So, demand for private model implies a level of sophistication and health insurance is likely to increase to REMITTANCES NEWS complexity that significantly affects the vol- complement public health care services, atility of the solvency indexes. The Mexican insurance sector is a very solvent sector and Remittances to El has successfully overcome the challenge of The future looks Salvador Hit $1.78 Bn implementing new regulations. By nature, promising if the the insurance sector confronts innumerable insurance market can Through April risks and obstacles. Among the most im- align with President portant macro trends are: the deterioration López Obrador’s Remittances to El Salvador totaled $1.78 billion of the country’s economic indicators, such development plans.” as financial stability, sovereign credit quality, in the first four months of this year, Diario la — Thomas Morante & Yani Contreras Huella reported May 24, citing the country’s growth and economic development; digital central bank. The total represented an increase transformation and accelerated competition of 3.9 percent from the same period a year in the virtual field; cybersecurity; an aging and insurers stand to benefit by introducing earlier. El Salvador’s central zone received population and migration displacements; broader health plan options. Another insur- the highest amount of family remittances, at deterioration and/or collapse of the public ance product line likely to benefit is auto $641.3 million, for the year through April. That and private health systems; climate change; insurance, as demand increases to address amount was 36 percent of the country’s total public insecurity and inefficiency in risk the mandatory obligation to obtain coverage level of money transfers for the period. The management; and supervision and regulato- for travel on federal highways, coupled with country’s eastern zone took in $580.5 million ry risk.” the coverage requirement imposed in 14 in remittances, the central bank said. The of 32 states in Mexico. In the life sector, country’s La Paz Department saw the highest Thomas Morante, member of insurers offering life and retirement products increase in remittances, with a rise of 5.6 per- the Financial Services Advisor seek to introduce legislation that would cent year-on-year. San Salvador and Cuscatlán board and chair of the Insurance promote savings by increasing the tax-free followed, each with increases of 5.3 percent. A Regulatory and Transactional limitations on the amount of contributions The country’s smallest growth rates were in Practice Group, and Yani Contreras, consul- that can be made to retirement plans. Also, Cabañas and Chalatenango, with increases tant, both at Kaufman, Dolowich & Voluck: new growth opportunities exist in Mexico of 1.9 percent and 1.3 percent, respectively. “To achieve growth of 7.5 percent for 2019, for specialized products like representation The United States is, by far, the top source as projected by the Mexican Association of and warranties (R&W) insurance to protect of remittances to El Salvador, accounting for Insurance Companies, Mexico’s insurance buyers against a breach of sellers’ R&W in nearly 95 percent of the total. Canada accounts market faces challenges. Recent govern- cross-border deals. As Mexican insurers for just under 1 percent, while transfers from ment decisions (cancellation of private dam- adjust to Solvency II, adopt data analyt- Italy make up 0.5 percent. In April, the U.S. age insurance Pemex had obtained, and can- ics to facilitate underwriting and claims unemployment rate was 3.6 percent, while cellation of private health and life insurance management and utilize digital distribution the unemployment rate among Latinos in the for public officials) affected the insurance platforms, and assuming Mexico manages United States declined to 4.2 percent, as com- industry. Despite low insurance penetration, potential tariff wars, the insurance sector pared to 4.8 percent the same month a year the future looks promising if the insurance faces a vibrant future.” earlier, helping to drive remittances sent from market can align with President López Ob- the United States. For the first four months of rador’s development plans. The government David Ross, global fund 2019, family remittances to Guatemala grew seeks to make insurance available to a wider manager at La Financière 10.1 percent year-on-year to $3.07 billion, while segment of Mexico’s population by promot- de l’Echiquier in Paris: “The money transfers to Honduras grew 10 percent ing a culture of ‘insuring.’ As an example, A Mexican insurance market is to $1.65 billion, Diario la Huella reported. the 2017 earthquake demonstrated the need the second-largest insurance market in Latin Through March, remittances to Mexico grew for mortgage insurance to cover earthquake America, but it has one of the region’s lowest 7.1 percent, as compared to the same period damage. Thus, if coverage is expanded, insurance penetration rates, estimated at 2.3 a year earlier, to $7.7 billion, and transfers to mortgage insurance will experience growth percent. The insurance industry traditionally Nicaragua grew 8.6 percent to $383.8 million. Continued on page 6

ECONOMIC NEWS IN PROFILE Mexico Considering Sandra Torres Casanova, Retaliation Following Guatemalan Presidential Candidate Trump’s Tariff Threat Name: Mexico is considering retaliatory action Sandra Torres Casanova following U.S. President Donald Trump’s threat to impose tariffs on all Mexican exports to the In the News: United States but would rather convince the Sandra Torres is leading in the polls ahead of the first round Trump administration to reach a negotiated of Guatemala’s presidential election, scheduled to be held solution, senior Mexican officials said June 3, on June 16. Torres is a well-known politician in Guatemala. The Wall Street Journal reported. The Mexican She was the country’s first lady from 2008 to 2011, when government sent a high-level delegation led by she divorced then-President Álvaro Colom. Foreign Minister Marcelo Ebrard to Washington Torres // File Photo: Sandra for meetings with U.S. officials in an attempt to Background: Torres Campaign Website. reach an agreement that is in both countries’ Torres, 63, was born in Guatemala’s Petén Department. She entered politics in 2002, when she best interests. Trump on May 30 threatened helped found the National Unity of Hope party, better known as UNE, under which her then-hus- to impose 5 percent tariffs on all Mexican band Álvaro Colom won the 2007 presidential election. That year, UNE also won the majority of goods starting June 10. The duties would congressional seats. Within UNE, Torres has worked to promote programs and policies with a gradually increase to 25 percent by October if focus on social development, especially in relation to women and children. She also founded Mexico fails to “substantially” stop the flow of the National Coordinator of Women within the UNE party, a position which seeks to hear wom- migrants traveling through Mexico toward the en’s specific demands. United States, Trump said. Mexican Economy Minister Graciela Márquez said Mexico was In 2011, Guatemala’s electoral authority barred Torres from running for president due to her exploring several possibilities for retaliatory personal relationship with then-President Álvaro Colom, whom she had divorced just before action, including resorting to a multilateral enlisting her candidacy. Guatemalan law bans close family members of current heads of state organization, such as the World Trade Organi- from running for office, and the electoral tribunal deemed the divorce had been orchestrated to zation, or impose its own tariffs on selected circumvent the law, El Espectador reported. In 2015, Torres ran for president again, coming in U.S. goods. “We’re getting prepared, but we second in the first round. She then lost to current President Jimmy Morales in the runoff. trust that diplomacy and actions to persuade and convince to maintain integration and trade Among her top proposals, Torres wants to create a support program for single mothers in relations will work,” she said. Adding, “We want Guatemala, as well as a business-training program for women. She has also promoted the free trade to prevail in North America.” Mean- construction of regional hospitals with specialized care for women. while, Republican U.S. lawmakers are report- edly discussing whether they should vote to Of Note: block Trump’s planned tariffs, The Washington Guatemala’s Constitutional Court ruled in May that the country’s Supreme Court must revisit a Post reported, citing unnamed sources familiar case involving Torres’ immunity, which presidential candidates enjoy. In February, the Supreme with the talks. Trump’s declaration of a national Court had ruled against the Public Ministry’s request to strip Torres of her immunity, saying emergency at the U.S.-Mexico border allows there was not enough evidence. The ministry sought to lift her immunity in order to investigate him to impose the tariffs, but Congress can her alleged role in illegal campaign financing in relation to the 2015 election. Torres has denied override a national emergency determination wrongdoing. by passing a resolution of disapproval. Such a resolution could also block billions of dollars in In recent weeks, Guatemala’s Constitutional Court has barred two candidates who were among border wall spending that relies on the national the front-runners from participating in the election. Zury Ríos’ candidacy was blocked because emergency declaration, unnamed sources told she was the daughter of late dictator Efraín Ríos Montt, and Thelma Aldana was deemed ineli- The Washington Post. [Editor’s note: See relat- gible to run for lacking a certification confirming that all of her public accounts were settled. ed Q&A in the June 3 issue of the daily Latin America Advisor.] Sources: The Washington Post; Sandra Torres campaign website; El Espectador; Prensa Libre.

NEWS BRIEFS POLITICAL NEWS Bukele Sworn in U.S. House Passes Disaster Hondurans Take to as President Relief Bill That Includes $1 Billion for Puerto Rico Streets in Violent of El Salvador

The U.S. House of Representatives on June 3 Demonstrations Nayib Bukele, 37, was sworn in June 1 as pres- passed long-delayed legislation that will pro- ident of El Salvador, ending three decades of vide $19.1 billion in aid to states and territories Violent protests continued in Honduras on two-party rule in the Central American nation. hit by flooding, hurricanes and other disasters, June 3 despite President Juan Orlando Hernán- A former mayor of San Salvador, Bukele won The Washington Post reported. The measure, dez’s decision to concede to demonstrators’ more votes than all other candidates in the which U.S. President Donald Trump is expected demands a day earlier, Reuters reported. The country’s presidential election in February and to sign, includes more than $1 billion in aid for previous day, Hernández vowed to overturn two wore a blue suit without a tie to his swearing in, Puerto Rico. The Senate approved the bill in decrees approved last year to set up entities at which he was accompanied by his wife, Ga- May. to overhaul the country’s education and health briela. “Our country is like a sick child, now it’s up to all of us to take care of it,” Bukele told the crowd in his inaugural address, Reuters report- Brazil Halts Beef Exports ed. “We have to suffer a little now, we have to to China Following Case have a little pain, assume our responsibility and all as brothers to bring forward that child.” He of Mad Cow Disease added that El Salvador “has suffered greatly. It Brazil has suspended beef exports to China is a country that has had to rebuild; it has had after a case of mad cow disease was reported earthquakes and corrupt governments and yet in the state of Mato Grosso, the latest blow we continue to move forward,” the Associat- to Brazilian meat exporters, Bloomberg News Hernández // File Photo: Honduran Government. ed Press reported. During his five-year term, reported June 3. Shipments have been halted Bukele vowed to make tough decisions for the sectors. Critics say the reforms would have in compliance with quarantine and sanitary country, which is beset by violence and poverty, privatized public services and led to mass protocols between the two countries, the but he gave no details. Bukele’s inaugura- layoffs, which Hernández’s government had Agriculture Ministry said. Cargoes shipped tion ended decades of rule by the right-wing denied. Hernández revoked the decrees on after May 30 must be returned or redirected Nationalist Republican Alliance (ARENA) and June 3 “for the peace of Honduras,” and his to other destinations. The ministry called the the leftist Farabundo Martí National Liberation administration sought dialogue with unions case “atypical,” as the infected cow contracted Front (FMLN). At his inauguration, thousands and trade groups that opposed the reforms. the disease spontaneously instead of through of Salvadorans filled Gerardo Barrios Plaza in The groups have demanded several conditions contaminated meals. front of the National Palace, chanting “Yes, for talks, including that the topics of health and it’s possible! Nayib president!” Bukele now education be tackled together. Protests began must contend with frequent threats by U.S. in early May, but they have intensified since U.S. Homeland Security President Donald Trump, who has threatened then, with tens of thousands of people taking to cut aid to El Salvador, as well as Guatemala Agents to Work With the streets and violent clashing with police. and Honduras, if they do not increase efforts Guatemalan Authorities In late May, demonstrators set fire to tires to curb the flows of migrants heading to the and other objects outside the U.S embassy, United States, Reuters reported. On June 1, The administration of U.S. President Donald CNN reported. They also burned and looted Trump congratulated Bukele via Twitter. “The Trump will deploy dozens of Homeland Securi- some 30 shipping containers with the logo of United States stands ready to work with @Nay- ty agents and investigators to the Mexico-Gua- fruit company Dole. Strikes have also brought ibBukele to advance prosperity in El Salvador temala border in an attempt to slow illegal operations at public hospitals and schools and the hemisphere. Congratulations President migration to the United States, The Washington to a halt. Classes have been suspended for Bukele on your inauguration!” Trump tweeted. Post reported May 31, citing unnamed U.S. about three weeks, and consultations in public Bukele did not invite Venezuelan President officials. The DHS agents are to work as health centers have been suspended for nearly Nicolás Maduro, Nicaraguan President Daniel “advisors” to Guatemala’s national police and a month, Reuters reported. [Editor’s note: See Ortega and Honduran President Juan Orlando migration authorities, with the aim of deterring related Q&A in the May 13 issue of the daily Hernández to his inauguration, saying they lead migrants from beginning their journey north Latin America Advisor.] “undemocratic” governments. and disrupting popular routes.

FEATURED Q&A / Continued from page 3 FINANCIAL SERVICES ADVISOR is published biweekly by the Inter-American Dialogue, Copyright © 2019 has found the Mexican market to be a diffi- NAFTA in 1994, Mexico opened its insurance cult one to develop due to both low levels of business to the other NAFTA countries with Erik Brand formal sector employment and a significant the hope that it would increase the penetra- Publisher [email protected] portion of the population living in poverty. tion of insurance business in the country. Adding to these historical hurdles, automo- That has not happened. It has stayed under Gene Kuleta Editor bile insurance, a gateway product that leads 2 percent of GDP. Mexico has more than [email protected] consumers to other types of insurance, Anastasia Chacón González before this year had not been completely In the insurance Reporter mandatory. However, the Mexican insurance industry, Mexico has [email protected] industry has been gaining ground. Changes remained a country making some level of automobile insurance with potential...” compulsory as of the beginning of this year Michael Shifter, President — Tapen Sinha have helped. It also seems that the Solvency Genaro Arriagada, Nonresident Senior Fellow II regulation, instead of being a drag, has Sergio Bitar, Nonresident Senior Fellow been somewhat beneficial to insurance com- 100 operating insurance companies, and Joan Caivano, Director, Special Projects panies because it addressed one of the ma- Solvency II has been implemented. Every- Michael Camilleri, Director, Peter D. Bell Rule of Law jor problems of insurance in Mexico: public thing looks good on paper. However, no Program trust. Lack of trust in insurance companies compulsory third-party insurance has been Kevin Casas-Zamora, Nonresident Senior Fellow has been a deterrent to buying insurance, implemented nationwide for automobiles. Ariel Fiszbein, Director, Education Program but with Solvency II, trust in the industry has Group life insurance has stayed only with the Peter Hakim, President Emeritus been bolstered by providing regulation on large employers, whereas most of the jobs Claudio Loser, Senior Fellow reserves, capital requirements and disclo- are created in the informal sector, which has Nora Lustig, Nonresident Senior Fellow sures. Another growth driver for the Mexican no life insurance at all. Insurance companies Margaret Myers, Director, Asia and Latin America Program insurance industry is the increasing penetra- have remained profitable, with the return Manuel Orozco, Director, Migration, tion of banking services in the country. While on equity above 20 percent and the return Remittances & Development individual agents and brokers have been on assets above 3 percent. But in 2015, the Jeffrey Puryear, Senior Fellow the most significant distribution channel for return on equity was below 11 percent. There Tamar Solnik, Director, Finance & Administration insurance, generating more than 60 percent has been a huge volatility in the insurance Lisa Viscidi, Director, Energy Program of premiums, bancassurance is becoming an market (compared with insurance markets Denisse Yanovich, Director of Development and External Relations increasingly important channel, growing at in the other developed markets in the region, double digits. As banking penetration contin- such as Canada or the United States). This Financial Services Advisor is published ues to expand in the country, bancassurance characteristic of the Mexican market has biweekly, with the exception of major holidays, by the Inter-American Dialogue at will continue to expand access to insurance not changed since the implementation of 1155 15th Street NW, Suite 800 products.” NAFTA. Now, the future of NAFTA itself is Washington, DC 20005 being challenged in the political arena. That www.thedialogue.org Tapen Sinha, professor of risk fact alone would give a pause to large U.S. ISSN 2163-7962 management at the Instituto insurance companies to venture further into Subscription inquiries are welcomed at [email protected] Tecnológico Autónomo de Méx- Mexico. However, it might open doors for the ico and professor at the Uni- companies in the Trans-Pacific Partnership A The opinions expressed by the members of the Board of versity of Nottingham Business School: “In countries to make forays into Mexico.” Advisors and by guest commentators do not necessarily the insurance industry, Mexico has remained represent those of the publisher. The analysis is the sole view of each commentator and does not necessarily a country with potential, but unfortunately The Advisor welcomes comments on its Q&A represent the views of their respective employers or firms. that potential does not seem to have been section. Readers can write editor Gene Kuleta The information in this report has been obtained from reliable sources, but neither its accuracy and completeness, realized in the past quarter-century. With at [email protected]. nor the opinions based thereon, are guaranteed. If you have any questions relating to the contents of this publication, contact the editorial offices of the Inter-American Dialogue. Contents of this report may not be reproduced, stored in a retrieval system, or transmitted without prior written permis- sion from the publisher.