The bill – passed by congress in October, and which is pending approval by the president, Ollanta Humala – will be the country’s most important legally-binding insurance contract regulation to be in place since the country’s 1902 commerce code.
The act would eliminate “abusive clauses” in insurance contracts and also ensure that changes to policies are communicated with 45 days’ notice, to allow the insured to seek alternatives upon a disagreement.
Other measures include provisions for duration and renewal of contracts, the applicability of consumer protection rules, definitions of contract interpretation rules, and regulation of non-payment of insurance.
“Insurance companies have been placed in the dock, and abusive conduct has been attributed to them,” Enrique Ferrando Gamarra, senior partner at Osterling law firm in Peru, told LatAm Insurance Review. “The law aims to stop this alleged abuse.”
Alonso Núñez del Prado, president of the Peruvian association of insurance law (Asociación Peruana de Derecho de Seguros), who was involved in the drafting of the law, told LatAm Insurance Review that one of the most criticised aspects of the bill is Article 21, which creates a period of 30 days before insurance companies can suspend coverage due to lack of premium payment by the insured.
“There are certain aspects of this law that bother insurers, but we believe that, in actual fact, this law will result in a growth of the insurance market,” he said. “With a better perception from the public about insurance companies, as a consequence there will be a higher penetration of the insurance market.”
By Roberto Barros