Emergency Decree No. 27/2018: Administrative Simplification and Lack of Bureaucracy Process in Insurance Matters

On January 10, 2018 the Government enacted Decree No. 27/2018, which amends several areas of legislation with the aim of reducing bureaucracy and simplifying public administration procedures. In general terms, the Government pursues to eliminate “regulatory barriers” and reduce the bureaucratic burdens for the development of each of the activities whose regulations are modified.

In order to streamline and simplify the means of proof of the insurance contracts, section 158 of Decree No. 27/2018 replaces the first paragraph of section 11 of Law No. 17.418 by the following: “Insurance contracts can only be evidenced in writing; however, all other means of evidence, including any digital means, will be admitted if there is a written evidence principle” (underlining added by the authors). Thus, Decree No. 27/2018 clarifies the validity of digital means to prove an insurance contract as long as there is a written evidence principle. Such amendment is in line with Section 1106 of the Argentine Civil and Commercial Code, which also acknowledges the electronic support validity.

Regarding group life insurance for State Employees, Decree No. 27/2018 repeals Law No. 13.003 and empowers the SSN to issue new regulation in accordance with the current parameters governing this kind of insurance. The repeal will go into effect once the SSN enacts the new regulation.

According to Decree No. 27/2018, the new regulation must include the following aspects: i) compulsory contract terms, ii) type of coverage, iii) sum insured and iv) insurance premium rate. Decree No. 27/2018 also states that once issued, the new regulation must be reported to Ministry of Modernization. The ministry will call a bid for public tender and award the hiring of insurance policies to the winning company.

Moreover, Decree No. 27/2018 states that the insurance premium will be deducted from State Employees’ salaries by the public agencies and paid monthly into the awarded company.

Lastly, Decree No. 27/2018 modifies the compulsory nature of these policies by making them voluntary.

Another substantial change of insurance law is section 169 of Decree No. 27/2018, which replaces the second paragraph of section 4 of the Consumer Protection Law No. 24.240 by the following: “the information must always be for free for the consumer and provided in the support that the provider decides, unless the consumer prefers physical support. If the support is not determined, it must be electronic”. Even though this is not a specific insurance law amendment, it is very important for the insurance industry since most of the insurance contracts are deemed consumer contracts as well.

This measure contributes to the current digitalization process of the insurance industry, for which the SSN has already issued rules in order to promote digitalization of the sales process and the relationship between the insurer and the insured. In particular, Decree No. 27/2018 is associated with article 25.2 of the General Regulation of the Insurance Activity that regulates the delivery of policies by electronic means.