CHILE Law and Practice Contributed by: Ricardo Rozas, Max Morgan and Stefano Perretta, JJR Abogados
Insurance policies must contain the following basic provisions and information: • the identity of the insurer, insured and beneficiary (if applicable); • the insured subject matter; • the insurable interests; • the risks taken by the insurer; • the policy period; • the insured amount; • the value of the insured subject matter; • the premium; • the policy date and the insurer’s signature; and • the insured’s signature when mandatory by law. In addition, Chilean law defines reinsurance as an agreement whereby the reinsurer undertakes to indemnify the reinsured within the limits and modali - ties set forth in the agreement, for liability affecting its patrimony as a consequence of the obligations it has undertaken in one or more insurance or reinsur- ance contracts. When construing the will of the par- ties, Chilean law considers international reinsurance practice. Reinsurance is subject to the principle of freedom of contract with a few mandatory restrictions, such as the fact that it cannot alter the terms of the insurance contract and that the insurer cannot delay payment of the indemnity due to the reinsurance. Direct actions of the insured against the reinsurer are not valid unless otherwise agreed in the reinsurance contract or as per an assignment of rights after the loss from the reinsured to the insured. 6.5 Multiple Insured or Potential Beneficiaries Under Chilean law, beneficiaries are defined as those parties who are not the insured but who have the right to indemnity in the case of a loss. Where the insur- ance policy includes a beneficiary, it must specify their identity or how their identity may be determined. 6.6 Consumer Contracts or Reinsurance Contracts As stated in 2.2 Writing of Insurance and Reinsur- ance , insurance companies must word their contracts using the models of policies and clauses in the CMF’s
Register of Policies. The Register of Policies is meant to be a publicly available deposit that concentrates the contents of the insurance policies, forms and clauses available in the market as approved by the CMF. Exceptionally, insurers may use non-registered mod- els where: • these relate to general insurance; • the insured or the beneficiary is a legal entity; and • the annual premium is higher than 200 Chilean UF (for larger risks). In addition, non-registered models may also be used for transport insurance, marine or aircraft hulls, or for related insurances. As previously stated, reinsurance is subject to the principle of freedom of contract, with a few manda- tory restrictions (see 6.4 Legal Requirements and Distinguishing Features of an Insurance Contract ). 7. Alternative Risk Transfer (ART) 7.1 ART Transactions Generally, ART transactions are not expressly regu- lated in Chile. However, within ART solutions, para- metric insurance has recently been recognised (see 8. Interpreting an Insurance Contract 8.1 Interpretation of Insurance Contracts and Use of Extraneous Evidence As discussed in 1.1 Sources of Insurance and Rein- surance Law , insurance and reinsurance contracts are subject not only to the Code of Commerce but also to the general provisions relating to the interpre- tation of contracts in the Civil Code (Article 1560 et seq) and certain provisions contained in DFL 251. The Chilean position on insurance and reinsurance contracts can be broadly summarised as follows. 10.1 Insurtech Developments ). 7.2 Foreign ART Transactions See 7.1 ART Transactions .
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