Insurance Comparative Guide

• Law Firm: Ribas, Shaw & Asociados - Abogados
• Subject Matter: Insurance, Insurance Laws and Products, Reinsurance
• Author: Mr Ignacio Shaw
• Published date: 23 February 2023

1 Legal framework

1.1 Which legislative and regulatory provisions govern the insurance sector in your jurisdiction?

The Insurance Act (17,418) and the Insurance Companies Act (20,091), together with several regulations issued by the National Superintendency of Insurance (SSN), constitute the legal and regulatory framework of the Argentine insurance market.

The insurance and reinsurance market in Argentina is highly regulated. The Insurance Companies Act empowers the SSN to regulate all aspects of insurance activity.

Regulatory issues are governed by the Insurance Companies Act, implemented by the General Insurance Regulation (38,708/14) and its annexes and amendments.

Contractual aspects are regulated by the Insurance Act.

1.2 Which bilateral and multilateral instruments on insurance have effect in your jurisdiction?

The Ministry of Foreign Affairs lists several minor instruments - mostly bilateral - which relate to very specific insurance matters (most of these are outdated). We have not seen these instruments applied either in legal practice or in judicial precedents.

More recently, the SSN has executed memoranda of understanding on international cooperation with regulators and insurance authorities in different countries, including the United States, Mexico, Spain, Brazil, Peru, Colombia and Uruguay.

1.3 Which bodies are responsible for enforcing the applicable laws and regulations? What powers do they have?

The SSN is the local regulator.

The Insurance Companies Act establishes the SSN, originally created in 1937, as the local authority that governs all matters relating to the regulation and enforcement of insurance legislation passed by the Argentine Congress.

The SSN has a wide range of powers and faculties, including the power to:

• authorise, control and supervise all insurers;
• conduct inspections;
• enact general regulations for insurance activity;
• authorise and register new insurers, reinsurers and intermediaries;
• apply administrative sanctions;
• receive reports on non-compliance or misconduct by insurers reinsurers and intermediaries; and
• register and keep records relating to directors, auditors founders, promoters and adjusters involved in the insurance business

1.4 What is the regulators' general approach in regulating the insurance sector?

Certain legal provisions define the general approach of the local authorities in regulating the insurance sector.

Section 2 of Law 12,988 provides that insurance coverage for persons, assets or any other insurable interest located within the Argentine jurisdiction must be purchased from Argentine-licensed insurance companies.

The Insurance Companies Act and the general regulations implementing its provisions enacted by the SSN comprise a very detailed corpus, which governs all aspects of insurance activity.

2 Insurance contracts

2.1 What are the main types of insurance available in your jurisdiction?

The main types of insurance available are:

• property insurance;
• civil liability insurance (eg, general insurance, errors and omissions insurance, directors' and officers' insurance) and
• life, labour compensation, transport, marine, credit and surety insurance.

2.2 Are all insurance contracts regulated? What terms do they typically include?

Insurance plans and the general and particular insurance policy clauses for each type of cover require approval by the National Superintendency of Insurance (SSN). Insurers may also apply for authorisation to provide any given type of insurance cover (provided that they meet all regulatory requirements) available under insurance plans and policies that have already been approved by the regulator for other insurers.

Also, pursuant to Section 158 of the Insurance Act, certain rules of the Insurance Act cannot be modified by the parties. These rules relate to:

• non-disclosure (Section 5);
• wilful non-disclosure (Section 8);
• losses that occur during the three-month term within which the insurer may challenge the contract due to non-disclosure (Section 9);
• adjustment of the premium due to risk decrease (Section 34) and
• the duty to notify the insurer of any aggravation of the risk (Section 38).

Other rules set out in Section 158 can only be modified in favour of the insured. These modifications cannot be included within the general conditions of the contract and require separate treatment.

2.3 What are the formal and documentary requirements for conclusion of an insurance contract?

Pursuant to Section 1 of the Insurance Act, "an insurance contract exists when the insurer assumes the obligation, by means of a premium or quotation, to compensate a damage or perform an agreed action if the foreseen event occurs".

Entering into an insurance contract usually involves the following stages.

Proposal form: According to Section 4 of the Insurance Act, the insurance contract is consensual (ie, it is entered into through the parties' consent and it enters in force from that moment, even before the policy is issued). The proposal binds neither the insured nor the insurer, and it may be subject to prior knowledge of the general conditions.

If there are any differences between the proposal form and the terms of the policy, such differences will be considered accepted by the insured if no claim is made within one month of having received the policy (Section 12 of the Insurance Act).

Quotation: Under some circumstances, the quotation of the premium may be fixed or may be made available to the future insured prior to the proposal being placed.

Placement: An insurance contract is deemed to be concluded when the proposal of the insured is accepted by the insurer. This is the legal definition provided by the Insurance Act, although it has become outdated in some respects. In practice, the main terms and conditions and a premium quotation are usually made available to the insured, which in term accepts by requesting the issuance of an insurance policy under the conditions discussed. The legal solution is to consider insurance as a consensual contract, which is concluded and binding upon the expression of consent regarding the main terms of the insurance agreement, which does not require any written or formal expression, including the actual issuance of the policy (Section 4 of the Insurance Act).

Evidence of contract: An insurance contract can only be evidenced in writing. Other means of evidence are admitted if there is any form of written proof which may indicate the existence of the contract (Section 11 of the Insurance Act).

Utmost good faith, disclosure and representations: The duty to act in good faith is essential in insurance law and is binding on both the insured and the insurer.

Any non-disclosure or misrepresentation, or any failure to disclose material circumstances known by the insured before the contract is concluded - even if made in good faith - which in the opinion of experts could have prevented the insurer from entering into the contract or prompted the insurer to modify its conditions had the insurer been aware of the real status of the risk, makes the contract null and void (Section 5 of the Insurance Act). If the failure to disclose was not wilful, the insurer may, at its sole discretion:

• annul the insurance contract by returning the collected premium with a deduction of the applicable expenses; or
• readjust the premium with the consent of the insured.

However, if the insured acted wilfully, in principle, the insurer may keep the premium and annul the contract.

2.4 What are the procedural requirements for conclusion of an insurance contract?

Under the Insurance Act, insurance contracts are concluded when consent is given regarding the basic general terms of the insurance agreement, prior to the issuance of the insurance policy.

2.5 What are the respective obligations and liabilities of insurer and insured, both on concluding an insurance contract...