The Superintendence of Insurance Applied a Fine to an Insurance Company for Irregularities in the Underwritting Process

As a consequence of becoming aware of the existence of different claims issued by insureds that did not recognize having taken out the policies that were attributed to them, the SSN initiated an investigation through which verified that the company might have contacted the users of certain credit card, mainly by way of phone calls, and offered certain insurance covers providing misleading information, leading them to believe that it was a cost-free mandatory benefit, and hindering the finalization of the contracts.

The SSN also verified the existence of superposition of covers with respect with the same risks and insured persons, contracts involving insureds that had passed away a year before the issuance of the policy, and contracts with Agents or other subjects for supposed commercial and marketing services. The SSN underlined that “the company could not provide elements to prove the free will of the insureds, (even said that it cannot provide all the audio records), nor proof of the policy delivery”, that on occasions although it discontinued the covers it did not return the premiums and did not keep proper records of the complaints received by the Insured Service Office.

Additionally, the SSN understood that the company cannot deny its responsibility by attributing it to the intermediary that intervened in the policies because, as the company recognized, the intermediary acted as an Agent.

Finally, the SSN remarked that even though the insurer presented a plan to avoid the facts reported from occurring again, its acts demonstrate a subsequent bad administration and that the administrative proceedings and internal controls applied by the company was not effective to the purposes intended.

Consequently, the SSN applied a fine of ARS 893,759.44 in the terms of the article 58, section c, of the Law No. 20.091.