The Superintendence of Insurance Sanctioned an Insurance Company for Irregularities in the Verification and Payment of Losses and in the Appointment of Beneficiaries in Collective Life Insurance

Within the framework of an investigation initiated to supervise the insurer about financial statements as of 12/31/2013, the SSN verified that there were certain irregularities with respect to the outstanding claims of the Collective Life section in which a particular agent intervened, which culminated in the application of a fine of AR $ 125,757 under the terms of section 58 part c) of Law No. 20,091.

In sum, the offending conducts that led to the sanction were as follows:

• The insurer had paid losses without basic supporting documentation for the settlement of claims, such as medical reports, payment receipts, and in particular, true copy of a death certificate. The SSN understood that insurers, like any commercial agent, have the obligation to justify all their acts with clear documentation (section 321 of the Civil and Commercial Code) and that they must verify the occurrence of any loss, since otherwise the payments would not have any motive.
   
• The insurer had issued checks for the payment of claims in the name of the insurer itself and then the claims had been paid in cash by the agent, which violated the insurers' obligation to make payments by checks issued to the creditor's order (section 29 part f) of Law 20,091).
   
• The agent had been unjustifiably named beneficiary, preventing free choice by the insureds. The SSN considered the insurer's explanation that the agent had been named beneficiary because it provided its customers (the insureds) with additional services such as discounts in shops, commercial links, aids or subsidies to families and student scholarships systems to be insufficient.
   
• The SSN had made random visits to some beneficiaries of the investigated losses, those who denied having received any compensation, did not recognize signatures in the documents that were exhibited to them, or directly could not be found in the domiciles denounced.