Transparency in Insurance Regulation in Peru

Núñez del Prado Simons, Alonso

doi:10.1007/978-3-030-63621-0_20

Alonso Núñez del Prado Simons^38,39

Part of the book series: AIDA Europe Research Series on Insurance Law and Regulation ((ERSILR,volume 4))

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Abstract

The author makes a complete review of the various rules that an insurance company must comply with, regarding the information that must be included in the policies, their precontract obligations, the approval to which they must submit their policies and conditions, the way of doing advertising, contractual conditions, insurance applications, prohibition of clauses and abusive practices, even sanctions and rules for different types of insurance, in addition to the rights that the insured has and the services that the insurer must have to attend to it. He then exposes the transparency rules in insurance intermediation and loss adjustment to finish explaining the obligations in insurance supervision and its foundations.

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Notes

1.
Barrón and Gunther. has the merit of having been one of the first to deal with the issue of ‘Consumer Law and Insurance. (2002), pp. 88–107.
2.
Peñas Moyano, María Jesús. Cobertura provisional. In: Rocío et al. (2017). p. 261.
3.
Very similar to the Spanish legislation that has served as a model for most of the standards issued by the SBS as can be seen in: Copo and Abel (2014). Tomo I. p. 170.
4.
This topic can be reviewed in my article ‘Bad faith of the insurer’ in: Jaramillo (2015), p. 170.
5.
Article 6.- In order that users can access complete and timely information on insurance products offered by companies, through the website must be disseminated, as a minimum, the following:
1. a.
  Up-to-date information on the insurance products they offer; detailing in each case, and ordered by risk or by product, the corresponding coverage and exclusions, in addition to attaching the corresponding general conditioning model, with its respective identification code in the Insurance Policies and Technical Notes Register and the summary to which Article 16 of the Regulation refers.
2. b.
  In the case of personal insurance, ordered by product, the conditions of access and limits of permanence.
3. c.
  The minimum conditions approved by the Superintendence according to article 27 of the Insurance Law, according to the type of insurance product.
4. d.
  Information about the procedure, deadline and channel to submit the request for coverage, including the minimum information and / or documentation to be attached, according to the type of insurance product.
5. e.
  The tariff and/or quote applicable to mass insurance, containing the information indicated in Article 7 of the Regulation.
6. f.
  Permanent link with the “User Portal” section of the website of the Superintendence. Reference should also be made to the fact that the user may require guidance, additional to that granted by the company, in the User Assistance Platform of the Superintendence.
7. g.
  Information on the rejected claims, according to the model of annex 2, ordered by branch and product.
8. h.
  Frequently asked questions per insurance product that the users have with their respective answers.
9. i.
  The different instances before which users can appeal to present their complaints and/or complaints, such as: the company, the National Institute for the Defense of Competition and Protection of Intellectual Property (INDECOPI), instances of dispute settlement to which the second article of this Resolution refers, among others, as appropriate.
10. j.
  The applicable procedure for filing claims with the company.
11. k.
  The applicable procedure to exercise the right of repentance, if applicable, as provided in the Regulations.
12. l.
  Information regarding the reference premium applicable according to particular risk conditions, established by ranges, in those products that identify the Superintendence and according to the form of presentation that for this purpose indicates by means of Multiple Office.
13. m.
  The right of users to designate an insurance broker as their representative vis-à-vis the company to perform administrative acts, but not of disposition, within the framework of what is established in Article 340 of the General Law.
14. n.
  Other information at the discretion of the company.
6.
The following:
1. a.
  The amount of the commercial premium.
2. b.
  Deductible, franchise, or coinsurance costs, as applicable.
3. c.
  The applicable taxes, the established percentage and, if applicable, the amount.
4. d.
  The annual effective cost rate (TCEA) applicable in case of split of the premium and the assumptions that determine said rate.
5. e.
  Any concept not related to the contracting or insurance coverage, which corresponds to transfer to the user.
7.
The following:
1. a)
  Qualitative information brochures.—When the brochures only have the purpose of disseminating the characteristics of the insurance products offered, they must be written in easily understandable language and with legible characters with the naked eye, and must contain in each case: (1) a brief description of the product, (2) the identification code in the Register of Insurance Policies and Technical Notes, (3) covered risks and exclusions, (4) the existence of deductibles, copayments or co-insurance, as the case may be, at the expense of the (5) the penalties applicable in case of breach of the assumptions established by the company for the granting of promotional conditions, if applicable; and, (6) other relevant information identified by the company.
  
  Likewise, the channels available to provide information and submit complaints to the company about the product offered should be indicated, specifying the company’s location, website and telephone number, in the latter case, if applicable.
  
  Brochures that promote group or collective insurance should also include the company identification and policy number, with prominent characters and on the first page of the brochure.
  
  Where applicable, in the prospectus, it should be noted that the user has the right to designate an insurance broker, as his representative to the company to perform administrative acts.
2. b)
  Quantitative information brochures. When the information leaflets include information regarding the commercial premium and/or the reference premium, the applicable amount and its periodicity must be reported with plain legible characters, as well as the information indicated in literal a) of this article.
In addition, where premium split, or a guaranteed or expected return on products with savings or investment components is applicable, the following should be considered:
1. 1.
  Regarding the cost associated with the fractionation of the insurance premium, the TCEA, and an explanatory example.
2. 2.
  Regarding products that have a savings or investment component, the accuracy of whether it is a guaranteed IRR or an expected IRR, as well as an explanatory example. In the case of the expected IRR, it should be indicated with an explanatory note, that said rate does not guarantee a return, the reasons why it could fluctuate and the assumptions used for its estimation.
8.
The following:
1. a.
  The right of the policyholder to be informed of the changes to the contractual conditions proposed by the companies during the term of the contract, as well as the right to accept or not to accept such modifications, indicating the applicable procedure, deadlines and formalities, in accordance with the provisions of article 30 of the Insurance Law (LCS).
2. b.
  In the case of health insurance, the treatment of the pre-existing illness under the Insurance Law (LCS) and other applicable rules.
3. c.
  The obligation of the companies to pay the loss according to the term and procedure established in article 74 of the Insurance Law (LCS).
4. d.
  The aspects referred to the minimum information and documentation to be presented to proceed with the liquidation of the loss, if applicable, considering for that purpose what is indicated in article 74 of the Insurance Law (LCS).
5. e.
  The mechanisms for the settlement of disputes that the parties agree, if applicable, considering the provisions on arbitration agreement in Article 40 (c) and Article 46 of the Insurance Law (LCS).
6. f.
  The causes of resolution and nullity of the insurance contract and the consequences of both around premiums paid.
7. g.
  Effects of non-payment of the premium.
8. h.
  The condition related to the right to resolve the contract, without expression of cause or penalty, which should be prominently included in the case of insurance offered by the merchants.
9. i.
  The condition related to the reduction of compensation for the extemporaneous notice of the occurrence of the incident.
10. j.
  Others determined by the Superintendence.
9.
After the application has been submitted to the company, the marketer or the insurance promoter, and if it is not rejected, within a period of 15 days, the insurer must:
1. a.
  Deliver the insurance policy to the policyholder and/or insured. If the insured person is a different person, he may request a copy, without prejudice to the payment that may correspond to said service.
2. b.
  In the case of group or collective insurance, provide the necessary insurance certificates
3. c.
  Inform the insurance broker of the policy registration number.
10.
The following:
1. a.
  List of documents and information required to proceed to the liquidation process of the incident.
2. b.
  Mechanisms for the resolution of disputes, if applicable.
3. c.
  The right of return the policy, applicable in those cases developed in article 19 of the Regulation.
4. d.
  Right of renewal or unilateral extension of the contract, if applicable.
11.
The following
1. a)
  General information.
  1. 1.
    Location, telephone and E-Mail, or medium of contact via the company’s web if one has been enabled.
  2. 2.
    Name of the product.
  3. 3.
    Place and method of payment of the premium.
  4. 4.
    Medium and term established for the notice of the incident.
  5. 5.
    Places authorized by the company to apply for insurance coverage.
  6. 6.
    Means authorized by the company to file claims as provided in the Circular of Service of Attention to Users.
  7. 7.
    Entities authorized to file complaints and/or complaints such as the Superintendence, INDECOPI, among others, as appropriate.
  8. 8.
    Reference should be made to the existence of charges, where appropriate, considering the following text: “This product presents obligations to be borne by the user whose non-compliance could affect the payment of compensation or benefits to which he would be entitled”.
  9. 9.
    The obligation of users to inform the company if there is an aggravation of the risk insured, considering the following text for this purpose. “Within the term of the insurance contract, the insured is obliged to inform the company of the facts or circumstances that aggravate the insured risk.”
2. b)
  Information about the insurance policy.
In addition, companies must submit the following information, referring to the clauses of the policy that contemplate their development:
1. 1.
  The main risks covered.
2. 2.
  The main exclusions.
3. 3.
  Conditions of access and limits of permanence in personal insurance.
4. 4.
  If applicable, for the cases detailed in Article 19 of the Regulation, the existence of the right of repentance.
5. 5.
  Reference to the right to terminate the contract without cause.
6. 6.
  The existence of the right of the users to accept or not the modifications of the contractual conditions proposed by the companies, during the validity of the contract.
7. 7.
  Reference to the procedure for the application for insurance coverage.
12.
The following:
1. a.
  Name, name or business name and address of the insurer and, when applicable, of the co-insurers; of the contracting party and, if the insurance has been concluded for the account of others, the insured or the beneficiary, as the case may be.
2. b.
  Person, benefit or matter of insurance.
3. c.
  Risks covered and exclusions.
4. d.
  Date of issue and material term of validity.
5. e.
  Amount of the premium, surcharges and taxes, indicating their expiration, payment method and, when applicable, the criteria and procedures for the updating of the premiums, as well as an evolution of the amount of the premium.
6. f.
  Declared value, sum assured or scope of coverage and, where applicable, the criteria for updating the sum insured, as well as an estimate of the evolution of the sum insured.
7. g.
  Deductibles agreed upon
8. h.
  Where applicable, the official broker’s registration number and the commission to be received; as well as that corresponding to the sale made through banks, marketers and others, according to the relevant regulation, issued by the SBS.
9. i.
  In case of premium split or schedule of installments including interest, the indication of the applicable annual effective rate (TEA).
10. j.
  In the case of life insurance and personal accident with death coverage, the indication that the contract is part of the National Registry of Information-
11. k.
  In the case of Property Insurance, the indication that the existence of two or more policies covering the same risk entitles the contractor who does not know the existence of the previous contract, to request the reduction of the most recent contract or reduction of the sum insured to the amount not covered by the first contract, with the proportionate reduction of the premium.
12. l.
  The other specific conditions of the contract and annexes of the policy.
13. m.
  Others determined by the SBS.
13.
The part of the LCS on ‘Abusive Clauses and Practices’ was based on the project that professor Ruben Stiglitz donated to the SBS in 2005. For more information on this topic: Stiglitz (2004). Tomo I. p. 467 and following.
14.
En el año 2001 el doctor Luis Meza publicó una lista de cláusulas abusivas que se venían usando en el mercado peruano a la vista de la SBS, como puede verse en: Carbajal and Alberto (2001), p. 14. Lamentablemente, la práctica ha continuado incluso después de que entrara en vigencia la LCS en mayo de 2013.
15.
The following
1. a)
  Identification data of the policyholder, the insured and the beneficiaries, if any, according to the customer’s knowledge standards established by the SBS for the Prevention of Money Laundering;
2. b)
  Date of issue of the policy;
3. c)
  Term of contract, specifying start and end dates and times;
4. d)
  Description of the subject matter of the insurance;
5. e)
  Sum assured or how to determine it;
6. f)
  Amount of the premium or how to calculate it and method of payment;
7. g)
  Deductibles, co-insurance and similar at the expense of the insured;
8. h)
  Causes of termination of the contract;
9. i)
  Procedure to be complied with by the parties if they wish to terminate the insurance contract, indicating the requirements and consequences;
10. j)
  Procedure for claims, including the minimum information to be submitted;
11. k)
  Dispute settlement mechanism; and,
12. l)
  Definition of the relevant terms used in the insurance policy.
16.
The following:
1. a.
  Clauses by which the insured and/or beneficiaries renounce the jurisdiction and/or laws that favor them.
2. b.
  Drafting clauses ambiguous or unclear.
3. c.
  Clauses that establish limitation periods that do not conform to current regulations.
4. d.
  Clauses that place the insured at a disadvantage vis-à-vis the insurance company or are incompatible with good faith or equity.
5. e.
  Clauses that provide for the loss of rights of the insured and / or beneficiary for non-compliance with charges that are not consistent or proportional to the claim for which compensation is requested.
6. f.
  Any provision that contravenes the current legal system.
17.
More information on this topic in: Osorio Ruiz (1999), p. 53.
18.
The following;
1. a)
  General policies and procedures in relation to the attention and service to the user, which must be consistent with the normative framework in force on the subject.
2. b)
  User Service System Manual, which should contain the general policies of the company, as well as the objective, description of the operation of the system, the mechanisms and procedures that will be used to meet the objectives, responsibilities of the departments involved and the Customer Service Officer, as well as the communication and coordination channels among them, the personnel training policy on the user assistance system, among others.
3. c)
  Code of Good Practices for the attention of users, which should include the policies designed by the company so that workers and officials, responsible for caring for users, as well as the marketing channels they use, provide adequate information and attention in accordance with current regulations. The Code should also include the information provided to insurance brokers, if applicable.
19.
The following:
1. a.
  Ensure the implementation and compliance with current regulations regarding transparency of information and attention to users and other provisions established by the Superintendence.
2. b.
  Ensure that companies have areas of attention for complaints duly implemented and with adequate mechanisms for the acquittal of their claims.
3. c.
  Coordinate with the other areas of the company the implementation of the policies and procedures for the operation of the system of attention to the user and their due compliance.
4. d.
  Propose measures that allow the company to improve the operation of the users care system and its minimum elements.
5. e.
  Verify that the means of dissemination of information on the products and services provided by the company comply with current regulations.
6. f.
  Verify that the personnel in charge of providing advice to users in relation to the products and services provided by the company, as well as in relation to the matters contained in the contracts, complies with the training requirements contained in the Circular of Service of Attention to Users.
7. g.
  Follow-up of requests submitted for prior approval of minimum conditions and actions taken to correct the observations made by the Superintendence, if applicable.
8. h.
  Follow-up of the actions carried out by the company against clauses and abusive practices identified by the Superintendence.
9. i.
  Ensure that companies send the previous communications regarding the contractual changes within the deadlines provided in the Regulation.
10. j.
  Coordinate with the Superintendence the issues related to the attention of users and the transparency of the information disseminated by the company about its products and services.
11. k.
  Report to the Superintendence an annual report related to the operation of the user assistance system.
12. l.
  Propose the establishment of coordination mechanisms with the insurance brokers for the adequate attention of the consultations and claims presented by the users to whom they had intermediated their policies, as well as the communications related to the modifications of the policies that they have intermediated.
13. m.
  The others that are necessary for the fulfillment of its functions.
20.
More information on this topic in: Quintans Eiras Mª Rocío. La distribución de seguros a través de intermediarios. In: Rocío et al. (2017), p. 263 & following.
21.
More information on this topic in: Núñez del Prado Simons, Alonso. Distribución, comercialización y contratación del seguro; los agentes y corredores de seguros y el desarrollo de canales de distribución no tradicionales. In: Martínez et al. (2019), p. 276.
22.
The following:
1. a.
  Names and surnames or company name.
2. b.
  Address, telephone number and email.
3. c.
  Registration number granted by the Superintendence.
23.
Dr. Luis Meza has repeatedly shown to the SBS that there are abusive and even illegal clauses in the policies, but these continue to circulate without a penalty.
24.
The support of the SBS to the Bill of exclusion of the so-called big risks prepared and sponsored by the APESEG is an example and another its complicity for the approval and subsequent promulgation of the law 29549 that made inaccessible the life insurance law for the Unemployed and retired (those who most needed it).
25.
Wandt, Manfred. Work cited.
26.
Ibid.
27.
Ibid.

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Authors and Affiliations

Daly, Otero, Florez and Nunez del Prado Abogados, Lima, Peru
Alonso Núñez del Prado Simons
Pontifical Catholic University of Peru, Lima, Peru
Alonso Núñez del Prado Simons

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Department of Legal Studies, Catholic University of the Sacred Heart, Milan, Italy
Pierpaolo Marano
School of Law, University of Exeter, Exeter, UK
Kyriaki Noussia

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Núñez del Prado Simons, A. (2021). Transparency in Insurance Regulation in Peru. In: Marano, P., Noussia, K. (eds) Transparency in Insurance Regulation and Supervisory Law. AIDA Europe Research Series on Insurance Law and Regulation, vol 4. Springer, Cham. https://doi.org/10.1007/978-3-030-63621-0_20

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DOI: https://doi.org/10.1007/978-3-030-63621-0_20
Published: 31 March 2021
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