The “Terminate Policy” Button in e-Purchased Insurance is Now Regulated

The Argentine Superintendence of Insurance (“SSN,” after its acronym in Spanish) launched a project that was already in the works with relevant chambers of commerce to make a “terminate policy” button available for electronically purchased policies. The measure came down via Resolution No. 685/2021 which amended section 25.4.1 of the General Regulation of Insurance Activity (“RGAA,” after its acronym in Spanish).

Those amendments included adding subsection g) to section 25.4.1. of the RGAA, which outlines the formalities required to terminate said policies and how that termination can be requested. Under the new subsection, insureds can now request policy terminations through a website link or mobile application provided by the insurer. Both must be easily accessible and identifiable by the policyholder or insured requesting termination. The button is mandatory for policies taken out electronically for the following insurance lines: car insurance, motor vehicles, comprehensive insurance, theft and similar risks, glass, miscellaneous risks and personal accidents.
If termination is requested through the “terminate policy” button, the policyholder or the insured must electronically submit a signed termination note. In turn, the insurer is then required to confirm receipt of the termination note from the policyholder or insured on the link or app. They are then also required to send the receipt to the policyholder or insured via email or to make the receipt available on their website or mobile application.

Although the Resolution does not establish what happens when insurance contracts of subsection g) lines were not taken out electronically, we believe they could still be terminated using the “terminate policy” button, even if the button is not mandatory in those cases.

However, the “terminate policy” button is not a valid contract termination mechanism for policies other than those listed above. For the latter, termination is only valid if (i) requested by written signed rescissions delivered to the insurer or sent by special registered letter or email (if one was provided when the insurance was taken out) or (ii) submitted through a link or mobile application provided by the insurer to that effect.

The Resolution applies to insurance contracts with inception date occurring after the date in which the Resolution enters into force, which is 90 days after being published in the Official Gazette; in other words, starting December 16, 2021.

According to the Resolution’s recitals, terminations are effective from the moment they are communicated onward, meaning they are not retroactive with respect to the period running from the date when the insurer was on risk, because the policyholder or insured benefited or could have been benefited from the coverage. We understand that the SSN’s intention is to highlight the fact that insurers may not roll back a coverage already provided, and that consumers’ rights under sections 1110 and subsequent sections of the Argentine Civil and Commercial Code that establish that consumers may revoke their consent within 10 days from the date when a contract is entered into, cannot apply to insurance contracts.