COLOMBIA Law and Practice Contributed by: Rebeca Herrera Diaz, Rebeca Herrera Abogados
reserves closely align with actual risks, and provide greater financial transparency for policyholders. The Ministry of Finance initiated this change as part of the 2021 roadmap for modernising the insurance sec- tor, published by the Financial Regulation and Stud- ies Unit (URF). This roadmap highlighted the need for convergence with IFRS 17 standards, focusing on a prudent, risk-based approach to insurance regulation aligned with international best practices. By adopting aspects of Solvency II, Colombia aims to strengthen the resilience of its insurance market, improve risk management, and enhance the credibility of financial statements for both local and international stakehold- ers. In line with the SFC’s guidelines, new instructions for actuaries have been issued following Circular Externa 017 of 2024. These include new obligations related to the certification of insurance contingencies. Recent legal developments affecting the insurance market also include modifications to the Colombian pension system under Law 2381 of 2024. This law introduces a multi-pillar system comprising three dis- tinct pillars, separate from the social protection ben- efits extended to certain populations. The first pillar is a public pay-as-you-go system managed by Colpen- siones, the state-run pension fund, which covers con- tributions up to three times the minimum wage. The second pillar consists of individual savings accounts managed by private pension funds for contributions exceeding three times the minimum wage. The third pillar involves voluntary savings to supplement retire- ment income. As Colpensiones assumes a larger share of pension contributions – given that most affiliates and pension- ers earn less than three times the minimum wage – the demand for private annuity products within the compulsory regime may decline, affecting insurers that offer these products. Furthermore, the reform centralises disability and survivor pensions under Colpensiones, reducing the role of private insurers in providing these coverages within the compulsory regime. However, in the realm of private and volun- tary pension insurance, the market may experience new and more sophisticated demand. Higher-wage
earners, who will no longer be required to contribute to the compulsory system on 100% of their income, may use their remaining income to purchase voluntary and private life and pension insurance products. This presents a challenge and an opportunity for insurers to innovate in annuities and life insurance products. Meanwhile, Congress is currently reviewing a Health Law Bill introduced by the government to reform Colombia’s healthcare system. The proposed reform seeks to eliminate the existing Health Promotion Enti- ties (EPS) and replace them with Health and Life Man- agers. These new entities would co-ordinate health- care services but would not directly manage financial resources, shifting control over healthcare funds to the public sector. The bill also proposes the creation of Primary Health Care Centres (CAPS) to provide essential healthcare services and manage referrals to specialised care, with the aim of improving acces- sibility and efficiency. Additionally, the reform would centralise all healthcare funding under the state-run Administrator of the Resources of the General System of Social Security in Health (ADRES), which would be responsible for making direct payments to healthcare providers to ensure transparency and accountability. Importantly, the reform does not address voluntary or private health insurance products, nor does it impose restrictions on their availability in Colombia. If the bill is passed, private health insurers operating in the country may find new opportunities to expand their services. Finally, the Colombian Congress approved Senate Bill No 201 of 2023, which established and guaranteed the “right to be forgotten” for cancer survivors under Law 2475 of 2025. This law prevents discrimination against individuals who have overcome cancer, par- ticularly in their access to financial products such as insurance and credit. The law’s key provisions include: • prohibiting financial institutions from denying ser- vices or imposing unfavourable conditions on can- cer survivors solely based on their medical history; • amending specific articles of the Commercial Code to ensure that past cancer diagnoses do not lead to contract penalties or nullifications; • establishing that individuals who have been in remission for eight years are not required to
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