Peru: update on "claims made"
A few weeks ago, we wrote about the validity of the "claims made" policies in Peru, in connection to a non-binding opinion issued by the Peruvian Insurance Regulator (SBS). The SBS concluded in such opinion, that liability policies (even regarding financial lines) should be underwritten under occurrence basis according to the Peruvian Insurance Contract Law.
In our article, we wrote that it was hoped that the SBS reconsidered their position, as it was well intended but technically inaccurate. They did it!
On 17 May 2019, the SBS published a draft bill regulating (and therefore, accepting, as they were doing de facto) the validity of "claims made" policies. We applaud the disposition of the SBS in order to move forward with solid legal grounds. These should be welcome news for all players in the insurance sector.
The draft bill provides that those clauses in a liability insurance establishing that third party claims should be made within the policy period or in the extended period agreed therein, must be negotiated entirely between the parties. It is required that insurers and brokers inform of the consequences of agreeing such policies to the insured. The draft bill also allows insurers to provide retroactive coverage, if the parties are unaware of claims within such period.
The draft bill is now open for public comment until 17 June 2019. After this period, the feedback received will be considered by the regulator, and it is expected that the bill will be enacted shortly thereafter.
Draft bill (in Spanish) available at: http://nuevo.sbs.gob.pe/normativa-y-estandares/normativa/prepublicacion-de-proyectos-normativos
We look forward to discussing further at the upcoming Miami Latin American Claims (Re)Insurance Forum.
Related item: Peru: "claims made" policies still valid