The Superintendence of Insurance Fined Insurer for Misleading Advertising

With Resolution No. 574/2019 the Superintendence of Insurance (the “SSN”, after its acronym in Spanish) sanctioned an insurance company for irregular exercise of insurance activity for incurring in misleading advertising.

The SSN detected that an insurance company was using different brands on its website and in its advertising, thereby suggesting that they were different entities while, in reality, they belonged to the same insurer that was authorized to provide different lines of insurance. The SSN also detected that no reference was made by the insurer to its corporate name and legal domicile.

The SSN held that although insurers may use brands to refer to the services they offer, in the case under investigation the different brands were used to refer to the insurer itself as if it were three different insurers within a corporate group. The SSN maintained that insureds and prospective insureds have the right to know the full corporate name and legal domicile of the insurer offering the products so that they may exercise their legal rights. The conduct detected by the regulator amounted to misleading advertising under the terms of section 57 of Law 20,091, whose violation leads to an irregular exercise of the insurance activity (Article 58, Law 20,091).

The SSN consequently applied a fine on the entity. In addition, the SSN ordered the insurer to publish a note for three days in a mass circulation newspaper clarifying that the different brands used are trademarks that identify the lines of insurance that the company commercializes.