CHILE Trends and Developments Contributed by: Daniel Silva and Pía Parmar, Silva & Parmar Abogados
respect of the procedure and as a judge in respect of the decision. The same provision prohibits the prior designation, in the insurance contract, of the person of the arbitrator. In addition, insurance companies are under an obliga- tion to submit to the CMF an authenticated copy of final judgments delivered on matters relating to insur- ance contracts, which shall be made available to the public. Ordinary courts In the case of disputes arising from a loss whose amount is less than approximately USD430,000 (10,000 UF – Unidad de Fomento, an indexed unit of account), the insured may choose to bring their action The Insurance Ombudsman (DDA) is a self‑regulatory mechanism of the Chilean insurance market that pro- vides guidance and dispute resolution between poli- cyholders and companies, with an emphasis on speed and specialisation. Its decisions are binding on the insurance companies that adhere to it, but not on the policyholders. The DDA has jurisdiction to hear cases involving amounts of up to approximately USD10,000 in respect of personal insurance, and up to USD20,000 for other branches, without prejudice to the ability of insurance companies to accept that it may hear cases involving higher amounts. before ordinary courts. Insurance Ombudsman The DDA is currently engaged in a process of inform- ing the public about its existence, functions and ben- efits, which has resulted in an increase in the number of cases resolved by this body. Interpretation Regarding the interpretation of the insurance contract, the law provides for an interpretation contra profer- entem rule. Although this rule is not new in Chilean legislation since the Civil Code establishes it as a final rule of interpretation in Article 1566, in the case of insurance contracts it is included as a special provi- sion in Decree with Force of Law No 251.
In this regard, Article 3, paragraph 3, sub‑paragraph 3 provides that: “It shall be the responsibility of insurance companies to ensure that the insurance policies they issue are drafted in a clear and comprehensible manner, are not misleading and do not contain clauses contrary to the law. In the event of doubt as to the meaning of a provision in the model general condition of a policy or clause, the interpretation most favourable to the contracting party, the insured or the beneficiary of the insurance shall prevail.” It is therefore of vital importance that the drafting of insurance policies – including their general conditions, specific conditions and additional clauses – be clear and comprehensible, not be misleading, and not con- tain clauses contrary to the law. It is also noteworthy that in Chile there is a legal presumption of coverage under Article 531, which provides that a loss is presumed to have occurred because of an event that renders the insurer liable. Nevertheless, the insurer may prove that the loss was caused by a circumstance that exempts it from liability under the policy or the law. Coverage exclusions Coverage exclusions must be expressly stated in the general conditions of insurance policies, and their inclusion in the particular conditions is prohibited. In the case of life and health insurance, where exclu- sions for pre-existing conditions are established, the policy must expressly specify which illnesses, ail- ments or diagnosed health conditions are excluded from cover, and these must be declared by the insured at the request of the insurer. The regulator has determined, through rulings, that there are no prohibited coverage exclusions, in accordance with the general principle of contractual freedom. Article 530 of the Commercial Code provides that the insurer is liable for the risks described in the policy, except for those situations expressly included therein. Furthermore, the same legal framework establishes
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