Although all of the Latin American jurisdictions had notable
regulatory and market developments in 2008, Chile stands out as
particularly significant given the size of the market involved.
A Mature Market Flirts with Further Modernization,
By most measures, Chile is considered the third largest
insurance market in Latin America. It is widely considered to have
the most favorable economic and political environment in the
region, but these advantages are significantly counterbalanced by
the advanced development of the country's insurance market, as
reflected by the region's highest insurance penetration rate.
As one of the most open insurance markets in Latin America,
Chile's most significant developments this year were in areas
reminiscent of many of the major markets: modernization and
In July 2008, the Chilean legislature was recently presented
with a draft law designed to modernize the insurance and
reinsurance provisions contained within Chile's Code of
Commerce. If enacted, the legislation would have replaced
Chile's current laws concerning private insurance and
reinsurance in their entirety. Several aspects of the proposed law
are of particular note:
Article 513 (Definitions): The existing
provisions' set of outdated and limited definitions are
replaced with 22 new definitions that recognize certain modern
realities and developments in the global insurance business. New
definitions are provided for the terms "beneficiary,"
"deductible," "insurable interest" and
Article 518 (Contents of a Policy): An
insurance policy should contain, among other things, the following
items: (1) the identity of the insurer, insured, counterparty and
beneficiary (if any); (2) specification of the insured material;
(3) the insurable interest; (4) the risks transferred to the
insurer; (5) the inception and termination date of the policy; (6)
the amount or quantity insured or the means of determining same;
(7) the premium and time, place and form of payment; (8) the
signature of the insurer and date of execution; and (9) the
signature of the insured when required by law. The authenticity and
authority of the insurer's signatory is presumed.
Article 519 (Delivery of the Policy): The
insurer should deliver the policy or certificate of insurance
within five days of the perfection of the insurance contract.
Failure to complete this delivery obligation shall entitle the
insured to recover damages from the insurer or broker. If the
contents of the delivered policy differ from the agreed contents,
the insured shall have one month to object, which right must be
clearly stated in the policy.
Article 524 (Insured's Obligations): The
insured is obligated to properly disclose to the insurer all
circumstances necessary to identify and appreciate the insured...