CHILE Law and Practice Contributed by: Alberto Alcalde, María Catalina Zegers García-Huidobro and Pía Robledo, Puga Ortiz
8. Insurtech 8.1 Underwriting Processes
registered in the FSPR, provided they are already regulated under other legal frameworks. The CMF oversees compliance with these require - ments and has the authority to: • suspend or revoke registrations for non-compli - ance; and • impose sanctions for violations, including operating without proper registration. 7.3 Regulatory Distinction Between Funds and Dealers The Chilean framework distinguishes between funds and dealers based on their roles and business models. Funds pool investor capital and are managed under the Fund General Law. Managers must meet capital and guarantee requirements, comply with disclosure obligations, and implement appropriate governance and risk management standards. Where automated systems are used, their suitability and security must be ensured. The CMF supervises fund administrators. Dealers act as intermediaries in financial markets, including as market makers. They must be registered, meet capital and guarantee requirements, and imple - ment governance and risk management controls. They are also subject to rules preventing market abuse. The CMF oversees their compliance. 7.4 Regulation of Programmers and Programming Programmers are not directly regulated; regulation applies to the entities that use algorithmic systems. Such entities must ensure the reliability, security and accuracy of their systems, including compliance with standards of integrity, objectivity and consistency. They must also implement governance, risk manage - ment and cybersecurity controls, and prevent market abuse. Entities remain fully responsible for algorithm perfor - mance and must disclose relevant methodologies and criteria. The CMF supervises compliance and may set technical requirements.
Underwriting processes are not specifically regulated but are subject to general principles on transparency, risk management and consumer protection. Insurtech companies may use traditional or technol - ogy-driven underwriting, including data analytics and AI, provided processes remain objective and fair. The framework allows parametric insurance based on pre - defined triggers, subject to CMF criteria. Entities must implement adequate governance and risk management, ensure accurate and non-mislead - ing information, and certify automated systems where used. 8.2 Treatment of Different Types of Insurance Different types of insurance are subject to differentiat - ed treatment depending on their risk profile. Life insur - ance and annuities involve long-term commitments and are subject to stricter governance, solvency and underwriting requirements. Parametric models are not permitted for these products. Property and casualty insurance, by contrast, is more suitable for parametric models based on predefined triggers, allowing simplified underwriting and faster claims. The framework also promotes microinsurance and inclusive insurance, with simplified processes and mass-market distribution, subject to specific CMF rules.
9. Regtech 9.1 Regulation of Regtech Providers
Regtech providers – entities that use technology to assist in regulatory compliance – are regulated depending on their activities. The law establishes a framework for oversight by the CMF, which supervises entities involved in financial services, but does not include those leveraging technology for compliance purposes.
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