COLOMBIA Law and Practice Contributed by: Rebeca Herrera Diaz, Rebeca Herrera Abogados
conflict. However, this alternative dispute resolution mechanism, established by Law 1328 of 2009, has been infrequently used by insured parties. In reinsurance, conflicts are usually resolved directly by the parties or by arbitration panels. 9.8 Penalties for Late Payment of Claims Insurers in Colombia are subject to penalties for undu- ly delaying the settlement of claims. The obligation to pay late payment interest ( intereses moratorios ) on delayed insurance claim payments is established under Law 389 of 1997. Specifically, as amended by this law, Article 1080 of the Colombian Commercial Code mandates that insurers must pay late interest if they fail to fulfil their obligation to repay within the specified period. This period is one month from the date the beneficiary submits a complete claim, provid- ing evidence of both the loss and its value. This legal provision ensures that insurers are held accountable for timely claim settlements, imposing interest charges as a deterrent to delays and safe- Article 1096 of the Colombian Commercial Code grants insurers the right of subrogation once they have indemnified the insured for a covered loss. The article states that the insurer is subrogated up to the amount of the indemnity paid, meaning the insurer assumes the insured’s rights against third parties responsible for the damage. This enables the insurer to recover the indemnity amount from those who caused the loss, preserving the principle that the insured should not receive double compensation. The Colombian Supreme Court of Justice has upheld and elaborated on this right of subrogation in various rulings. The Court has emphasised that subrogation is an equitable remedy that prevents unjust enrich- ment by ensuring that the insured cannot claim the indemnity and compensation from the responsible party. The Court has also clarified procedural and substantive aspects of subrogation, affirming that the insurer’s right is limited to the amount repaid and that subrogation cannot exceed this sum (SC4527-2020, 9 December 2020). This means that the insurer cannot guarding the rights of insured parties. 9.9 Insurers’ Rights of Subrogation
claim more than what it compensated, preserving the principle of indemnity. The Colombian Supreme Court of Justice has consist- ently reinforced that subrogation is intended to pre- vent double recovery by the insured (SC3273-2020, 7 September 2020). If the insured has already received compensation from a third party responsible for the loss, the insurer’s right to subrogation may be lim- ited accordingly to avoid overcompensation. Also, the Supreme Court has recognised that subrogation does not allow insurers to exercise rights that are strictly personal to the insured (SC-3891 of 2020). For exam- ple, rights arising from moral damages or emotional harm, which are personal to the insured, cannot be pursued by the insurer through subrogation. The Supreme Court has acknowledged that the sub- rogation right cannot be modified by the parties to the insurance contract or waived, as it is a matter of public policy and mandatory in insurance law (SC-2879 of 2022 and SC-331-2024). Colombia’s insurance sector is experiencing signifi- cant transformation through the integration of tech- nology, leading to the emergence of various insurtech initiatives. Key developments include: • Establishment of the • Asociación Insurtech Colombia (AIC): Founded in 2023, the AIC aims to integrate the insurance sec- tor to drive innovation and market development. It fosters collaborative efforts to transform and facili- tate access to insurance for Colombian businesses and families. • Growth of Insurtech Start-ups: According to a mar- ket analysis by Beinsure, the insurtech ecosystem in Colombia has expanded by 24% and now hosts 67 insurtech start-ups. This growth is attributed to a low mortality rate of 8% among these start-ups, and strong ecosystem collaboration. • Strategic Partnerships: Although insurtech devel- opments mostly involve selling insurance policies, some insurance companies have partnered with 10. Insurtech 10.1 Insurtech Developments
120 CHAMBERS.COM
Powered by FlippingBook