Major Insurance and Reinsurance Developments in 2008 - Insurance and Transport - Mondaq Chile - Mondaq Business Briefing - Books and Journals - VLEX 51039072

Major Insurance and Reinsurance Developments in 2008

Author:Mr M. Millett
Profession:Edwards Angell Palmer & Dodge LLP
 
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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,

Taxation

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

taxation.

  1. Modernizing Legislation

    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    provisions' set of outdated and limited definitions are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

    "collective insurance."

    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...

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