Superintendent of Insurance – Approval and Expiry of Insurance Plans

On November 8, 2010 Resolution 35,401 (the “Resolution”), enacted by the National Superintendent of Insurance (the “NSI”) on October 20, 2010, was published in the Official Gazette. The Resolution sets forth new guidelines in relation to the NSI’s authorizations of insurance plans (i.e., the technical and contractual terms and conditions of each of the products underwritten by insurers) and introduces an expiry to these authorizations.

The Resolution introduces an important change concerning authorizations of insurance plans. These authorizations shall be valid for only five years. Insurers may request an extension, for the same period. Once the five-year term or its extension has expired, the authorization will automatically expire. Authorizations currently in force will automatically expire in five years from the date the Resolution comes into force, without the right to apply for an extension.

The Resolution maintains the right of any insurer to use the insurance plans authorized to another insurer. 90 days after the NSI authorizes an insurance plan, any insurer authorized to do business in that same line of business shall be able to use the plan, provided it obtains the NSI’s authorization and as long as the original authorization to the insurance plan remains in force. The right to request the authorization to use a plan approved to another insurer may only be exercised within the first two years from the date of the original authorization by the NSI.

The Resolution requires that insurers disclose to the NSI, within 180 days from the date of the Resolution, the insurance plans that they are effectively using or that they have used in the past year. Any authorization to an insurance plan not reported according to the Resolution will produce the automatic expiry of such authorization.

The NSI may also draft and approve insurance plans to be used by any insurer authorized to do business in the pertinent line of insurance. “Motor vehicles and/or tow” insurance shall only be underwritten according to the terms and conditions approved by the NSI in the Resolution. From March 1, 2011, any authorization to motor vehicle and/or tow plans granted by the NSI shall automatically expire.