Source: http://www.lataminsurancenavigator.com/2017/
Timestamp: 2018-12-14 11:10:24
Document Index: 744263511

Matched Legal Cases: ['§2714', '§2703', '§2716', '§2716', '§2716', '§2726', '§952', '§952', 'art 1']

LatAm Insurance Navigator: 2017
Posted by Zelle LLP at 11:29 AM
International insurers and reinsurers are likely to retain legal services from local attorneys in 29 Latin American countries. Consumers of legal services in Latin America often question whether the rules of professional conduct of these foreign suppliers are comparable to those in other jurisdictions, such as the UK or the US.
Labels: rules of professional conduct
While Puerto Rico was spared a direct hit from Hurricane Irma, it was lashed by Irma’s wind and experienced significant amounts of rain that will likely lead to flooding. There may also be damages arising from storm surge along the Northern Coast. Reportedly, more than 1 million people are without power. Many policies may exclude flood and limit or exclude losses arising from power interruption. Combined with the significant wind damage that is expected, it is inevitable that disputes over the extent of covered versus non-covered loss will arise.
Posted by Zelle LLP at 8:05 AM
Labels: concurrent causation, Hurricane Irma, Puerto Rico
With the Imminent Arrival of Hurricane Irma in Puerto Rico, Insurers Should Keep in Mind the Following Claim Handling Requirements from the Puerto Rico Insurance Code
Response to Notice of Loss – 15 Days. Acknowledge the claim in writing and commence investigation within 15 days. 26 L.P.R.A. §2714
Provide the Insured with a Copy of the Policy – 10 Days. Insurer must provide a copy of the policy within 10 days of being requested to do so. 26 L.P.R.A. §2703a
Investigation and Resolution of Claim – Less than 90 Days after Notice. The investigation, adjustment and resolution of any claim must be done in the “shortest reasonable period of time”, but no more than 90 days. 26 L.P.R.A. §2716b(1)
Document Extension Needs. If a claim cannot be completed within 90 days the claim file should contain documents detailing the existence of just cause to exceed the 90 days. 26 L.P.R.A. §2716b(2)
Resolution of a claim means the full payment of the claim, the written and duly justified denial of claim or closure of the claim for non-cooperation. 26 L.P.R.A. §2716c.
If an insurer has “well grounded knowledge” of any fraudulent acts as part of a claim submission, the insurer is required to report that information to the Insurance Commissioner. 26 L.P.R.A. §2726
Civil Authority – Mandatory evacuations may be issued in advance of Irma.
Adjuster licensing – Puerto Rico requires all adjusters and public adjusters to be licensed in Puerto Rico. However, the Insurance Codes provide that no license from Puerto Rico shall be required of a nonresident independent adjuster for the adjustment in Puerto Rico of a single loss or of losses arising from a catastrophe common to all such losses. 26 L.P.R.A. §952(3). The Commissioner may also grant a special emergency permit as adjuster to any person qualified for adjusting losses arising from a general catastrophe after the presentation of the application for the special permit. 26 L.P.R.A. §952(4).
Flood hazard zone areas—Areas identified on the Flood Insurance Rate Map can change so be aware of applicable policy limits by hazard zone.
Flood and Wind sublimits.
Posted by Zelle LLP at 2:18 PM
Labels: claims, hurricane, Hurricane Irma, Puerto Rico
By comparison to other jurisdictions, international reinsurers have easy access to the Colombian market. While the access to underwriting risks is not as limiting, it is not boundless. Colombia has delineated requirements for reinsurers, which depend on the nature of the business entity.
In Colombia, foreign companies need to be added to the Registry of Colombian Foreign Reinsurers and Reinsurance Brokers (the Spanish acronym is “REACOEX”) in order to operate in the country. The registration process commences with filing a petition with the local regulatory authority called the Colombian Finance Superintendent (SFC). The SFC will conduct due diligence and confirm compliance with the regulations, which include a pre-established minimum financial rating from one of several accredited institutions (Standard & Poor’s: BBB-, A.M. Best: B+, Fitch: BBB-, Moody’s: Baa3). Once the reinsurer is registered, there is an ongoing annual responsibility to update its rating.
Reinsurers may choose from any of the following operational options:
Incorporate a reinsurance company in Colombia: With the approval of the SFC, reinsurers may create a stock company in Colombia, subject to local regulations and supervision. To create this entity, the company must have a minimum of 5 shareholders with no singular ownership to exceed 95% of the company stock and a minimum capital requirement of USD12M.
Open a branch of a foreign reinsurer: A foreign reinsurer can open a branch office in Colombia, subject to the same regulations and supervision as reinsurance companies. The difference is that the latter has the added burden of complying with the local corporate law formalities. Conversely, a branch office does not have to have a board of directors, a Corporate Governance Code or an internal control system under Colombian law because it would naturally follow the internal corporate formalities of its main headquarters.
Create a representative office: Foreign reinsurers can open a local office to conduct its commercial/administrative activities. This is the most restrictive in nature. Accordingly, all binding decisions must be made abroad and the local personnel are only meant to undertake commercial/administrative activities and serve as intermediaries between the insured and the insurance company abroad (much like a local sales office).
In the current atmosphere, foreign insurers seem to prefer opening a representative office as evidenced by the lack of incorporated reinsurers or branch offices.
In addition to the ease of corporate structuring, Colombia is a reinsurer-friendly market because reinsurance contracts are freely-negotiated contracts. While the standard insurance contract tends to be interpreted in the light most favourable to the non-drafting party, the nature of a free-negotiated reinsurance agreement allows for a more equitable interpretation -without having to tilt the analysis in favour of either party- in the event of a dispute.
While the region is commonly thought of and treated in uniformity as it relates to insurance and reinsurance discussions, the practical realities of its geopolitical boundaries become prevalent when looking at the ease with which foreign reinsurers may operate in individual Latin American countries. These differences have been noted (in an effort to attract a more robust market) causing local legislative/regulatory changes for the better. For civil-law countries reliant on statutory changes, this is a slow process. However, this change – much like other things in this practice – may be attributable to a better understanding of the reinsurance business. Again, demonstrating that having the right personnel with the right knowledge leading the way is key to the success of reinsurers, insurers, and the growth of the Latin American insurance market.
Posted by Daniel Baron* and Rebeca Herrera Diaz
Posted by Zelle LLP at 7:35 AM
Labels: Colombia, Registry of Colombian Foreign Reinsurers and Reinsurance Brokers, reinsurance
Argentina: Expert Witness Testimony is Key in the Most Litigious Country
Argentina is one of the most litigious countries in Latin America. Per specialized insurance publication “Estrategas,” in September 2015 there were more than 488,000 cases pending in judiciary or mediation proceedings against local insurers. This is an extraordinary number of lawsuits, which are a heavy burden to handle, reserve, and, where required, pay.
The disbursements made in these cases will normally amount to a high percentage of all claims paid. Therefore, it is hardly possible for a local insurer to be successful in the Argentine market without a high degree of expertise in dealing with litigation. In this regard, effective use of expert witness testimony is key.
In Argentina, as is common in the rest of Latin America, expert witnesses are not selected and brought-in to testify by the parties, but are rather “official” court-appointed candidates who are randomly chosen by the judge from a list of pre-accredited professionals. The system aims at having the court receive an unbiased and neutral professional opinion on matters relevant to the case.
The parties can also request the designation of expert witnesses in pertinent fields of knowledge, supplying a proposal of issues to be addressed.
Expert witnesses will perform any needed investigation such as visiting the loss site, examining an injured plaintiff or scrutinizing the parties’ accounting records – after which a report will be issued and attached to the court file. The parties will receive a copy of the report and be given time to ask additional questions and/or file rebuttals.
The parties are free to designate their own experts to accompany the court-appointed professional during necessary investigations, file a report of their own and assist in rebutting the conclusions of the court expert if necessary, but this will almost never do the trick. Judges are not legally forced to follow the official expert witness’ conclusions -but in practice, because of the neutrality their report bears, they normally do.
In our experience, an effective defense should focus on having the court-appointed expert issue a favorable opinion at the outset. Although success cannot be guaranteed, below are some strategies that might help at achieving this:
Get your experts involved in the case as early as possible. Have them identify any evidence that may be important to their conclusions, and have the handling adjuster or counsel assist in securing this evidence for future analysis.
Have experts interact with counsel when preparing the defense, and especially as the filing proposing a list of issues and questions for the court-appointed expert is being prepared. Make sure to include all relevant issues.
Have your expert write a clear, detailed report to attach to your first defense filing as documentary evidence. The report should walk the reader through the case and provide ample support for its conclusions. Meticulous reference to supporting evidence that is available for verification should be included. The defense can request that the court-appointed expert refer to this report, its methods of analysis and/or its conclusions. The underlying purpose of this report is not to influence the judge, but primarily to persuade the court-appointed expert witness.
Chances of success will increase dramatically if you are successful at having the court-appointed expert confirm your position. If not, the same will be true for the adverse party. Therefore, we believe investing time and creativity in doing all you can in this regard at the early stages of the lawsuit can prove to be a most worthwhile procedural endeavor.
Posted by Zelle LLP at 10:50 AM
Labels: Argentina, expert witness
The Evolving Role of the Claim Adjuster in Latin America
Borrowing a definition from the by-laws of the Chartered Institute of Loss Adjusters (CILA), a loss adjuster is “a person whose predominant activity is the investigation, management, quantification, validation and resolution of Property, Casualty or any other losses (whether insured or not) arising from any contingency and the reporting thereof”.
The profession of loss adjusting came into being after the Great Fire of London in 1666. With the introduction of property fire insurance, independent surveyors began using their expertise to evaluate and settle claims. In 1941, prominent claims experts formed the Association of Fire Loss Adjusters, which later developed into “The Chartered Institute of Loss Adjusters” in 1961.
It is difficult to say exactly when the loss adjusting profession commenced in Latin America but, by the early 1900s, associations of loss adjusters had been formed, such as the Mexican Adjusters Association (1935) and the Argentine Association of Insurance Adjusters and Experts (1937). In the past two decades, the insurance authorities of the different Latin American nations began to regulate the activity of loss adjusters issuing professional licenses or authorizations -which are now required in Argentina, Bolivia, Chile, Colombia, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panamá, Paraguay, Peru and Venezuela.
The “Traditional” vs. “Independent” Role of the Adjuster:
In general, adjusters in Latin America are designated by the insurer with the main purpose of providing insight on a claim. Adjusters further contribute by participating in case-handling discussions and making recommendations. Written reports are directed to insurers and are not normally shared with any other party. Adjusters are expected to help protect the insurer’s rights against waiver, and will also typically represent insurers in negotiating and settling a claim within authorized limits as per their instructions. In short, in fulfilling their “traditional” role, adjusters may be viewed as working for insurers.
But Peru and Chile have taken some legislative steps in another direction. As per the Peruvian Insurance Statute, the adjuster should be impartial and independent, and the insured has a right to participate in his/her appointment. The adjuster's findings are included in reports which are given to the insured and insurers for review at the same time. These rules are developed in more detail in Resolution 3202-2013 issued by the insurance regulator "Superintendencia de Banca y Seguros y Administradoras Privada de Fondos de Pensiones". This Resolution sets out a procedure based on the adjuster’s final report, which should be issued within 20 days of receiving all necessary information and documents. Claim amounts are not negotiated by the adjuster as per instructions provided by insurers, but rather proposed to the parties in the context of the conclusions included in the reports that have been circulated to both sides.
As mentioned, Chile has comparable rules, which also support adjusters’ independence and equal access by the parties to their work product.
These rules have the adjuster assume a more neutral position, probably making his or her conclusions more difficult to overturn for either of the parties. While this legal framework certainly needs to be kept in mind and complied with, if the claim is handled professionally by knowledgeable individuals, the result should be satisfactory to all.
Posted by Zelle LLP at 7:13 AM
Labels: Chartered Institute of Loss Adjusters, Chile, claim adjusting, loss adjusting, Peru, Peruvian Insurance Statute
Mining Risks in Latin America: A Changing Landscape (Part 1)
Latin-America has some of the world’s largest mines. Chile’s Mina Escondida is the largest copper producing mine in the world. Mexico is the world’s largest silver producer. Chile is also posed to become the largest lithium producer in the world, while investors are eyeing 35 different lithium projects in Argentina.
As investments in mining continue to flow to the region at an incredible rate, local governments are stepping up regulatory requirements and enforcement. Mine workers are demanding better pay and working conditions. Local authorities are becoming more vigilant of pollution risks. In recent months, there have been several instances where these issues have resulted in the suspension of operations, penalties, and fines at large mines in Latin America.
In Argentina, after the third spill of cyanide solution in 18 months, the world’s largest gold miner, Barrick Gold, faces a steep challenge in its operations at its Veladero mine. After the second incident, mine operations were suspended for weeks, executives were indicted, and Barrick was fined a record $9.8 million. Following that incident, local authorities demanded the implementation of certain safety measures that would reduce the risk of similar events occurring in the future.
According to the judge overseeing cases related to Veladero, Barrick missed deadlines imposed by three orders from local authorities, including an order requiring Barrick to replace the pipes that would subsequently fail and cause the latest cyanide solution spill. Barrick operations have been suspended since March 28th, and local authorities have ordered the reengineering of the Veladero mine. A federal judge has called for the closure of the mine under Argentina’s Glacier laws, which require the complete suspension of mining operations after three serious incidents.
In response, Barrick has presented a $500 million reengineering plan to be implemented over a 5-year period. The Argentine government has yet to approve it. Local authorities are also taking blood samples from residents in the area, to determine health risks to the local population. In the US, investors and shareholders have now filed a class action against Barrick for misrepresenting the situation of Veladero.
Earlier this year on the other side of the Andes, 2,500 workers went on strike for 43 days at BHP’s Mina Escondida in Chile, demanding better working conditions for current and new employees. As a result of the strike, BHP suspended the construction of a second desalination plant in the port of Coloso and the extension of an existing concentration plant. BHP’s decision was the result of permanent blockades that prevented subcontractors from going to work on the projects.
Further north, 1,200 workers went on strike at the Southern Cerro Verde mine, Peru’s largest copper mine. The strike lasted three weeks and halved production during its duration. In February, Anglo American PLC suspended operations at its El Soldado copper mine in Chile after failing to receive regulatory approval from local authorities for the redesign of the mine.
While the tone of this post may seem pessimistic, the intention is to bring attention to some of the particularities of mining risks in Latin-America. The development of stricter regulatory frameworks, demands for better working conditions and rights, and the assessment of penalties for environmental violations are all signs that the region is developing and the mining sector continues to thrive. With respect to (re)insurance coverage for these facilities, while most insurance policies for mining operations exclude the risk of strikes, other types of losses involving suspension of operations by a government authority may present interesting coverage issues. Insurers and Insureds alike should be cognizant of the particularities of the region to better assess risks and provide adequate insurance coverage.
Published by Hernán Cipriotti
Posted by Zelle LLP at 9:48 AM
Labels: Argentina, Chile, mining
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