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Régimen de Seguros en Argentina

17/09/2014 - Por Calixto Zabala / Agustín Amura

In Argentina, the insurance industry is regulated by and is
subject to State control. State regulation and control is based on
the need to safeguard condence, an inherent element in the insurance
relationship, to aord protection against incompetence
and dishonesty, and to restore the balance between parties bound
by agreements containing uniform and pre-determined conditions,
having provisions whose scope is usually unknown.



Chapter 1
Argentina
Calixto Zabala and Agustín Amura*
I. INTRODUCTION
§ 1:1 Regulatory bodies; sources
§ 1:2 Market structure
II. PRINCIPLES OF INSURANCE LAW
§ 1:3 Meaning of insurance
§ 1:4 Elements of contract
§ 1:5 Void and voidable contracts
§ 1:6 Premiums
§ 1:7 Disclosure and misrepresentation
§ 1:8 Conditions and warranties
§ 1:9 Cancellation
§ 1:10 Subrogation
§ 1:11 Interpretation of insurance contracts
§ 1:12 Punitive damages
III. SPECIAL TYPES OF INSURANCE
§ 1:13 Fire insurance
§ 1:14 Debt insurance
§ 1:15 Liability of motor vehicles
§ 1:16 Private liability insurance
§ 1:17 Professional liability insurance
§ 1:18 Pollution liability insurance
§ 1:19 Life insurance
§ 1:20 Social insurance
§ 1:21 Medical insurance
§ 1:22 Travelers' insurance
§ 1:23 Marine insurance
§ 1:24 Aviation insurance
*Richards, Cardinal, Tutzer, Zabala & Zaeerer, Buenos Aires, Argentina.
1
IV. INSURANCE MARKET
§ 1:25 Establishment of insurance company, branch, or
subsidiary
§ 1:26 Foreign insurance carrier establishing a head oce
§ 1:27 Foreign insurance carrier seeking to directly establish
a branch
§ 1:28 Crossborder market
V. COMPETITION LAW
§ 1:29 Concerted practices among insurance, co-insurance, or
reinsurance, vertical and horizontal structures
§ 1:30 Insurance mergers
§ 1:31 Consumer protection
VI. CONCLUSION
§ 1:32 Factors aecting insurance business
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I. INTRODUCTION
§ 1:1 Regulatory bodies; sources
In Argentina, the insurance industry is regulated by and is
subject to State control. State regulation and control is based on
the need to safeguard condence, an inherent element in the insurance
relationship, to aord protection against incompetence
and dishonesty, and to restore the balance between parties bound
by agreements containing uniform and pre-determined conditions,
having provisions whose scope is usually unknown.
Insurance business and insurance for risk situated within
Argentina can only be contracted through a licensed insurance
carrier through approved policies.1 The Insurance Department,
within the Ministry of Economy, supervises the insurance
industry. State control is applicable to:
1. Insurance carriers: including, but not limited to, their
[Section 1:1]
1Law Number 12,988; Law Number 20,091.
International Insurance Law & Regulation
2
ownership structure, management and supervisory bodies,
nancial condition, reserves and permitted investment assets,
and insurance plans;
2. Brokerage, with a specic register and qualication procedure
applying to those wishing to act as a broker in the
placement of insurance policies; and
3. Policy provisions, with their contents approved by the Insurance
Department (special coverage policies made for
substantial amounts require special authorization).
In Argentina, the insurance sector is mainly governed by the
following laws:
1. Law Number 20,091 provides for the requirements that
individuals and entities engaged in the insurance business
must meet, including requirements for formation and
registration, composition of management and supervisory
bodies, general requirements for insurance plans, minimum
capital requirements and capital allocation, management
control and nancial statements auditing, general regulations
for corporate conversion and portfolio transfer, and
winding-up procedures. This Law also provides that the Insurance
Department is the agency responsible for statebased
control of the insurance industry. Finally, it outlines
applicable sanctions in the event of violations and procedural
guidelines for both administrative and court proceedings.
2. Law Number 17,418 regulates the terms in insurance
contracts, including, but not limited to, execution, insurable
risks, specic characteristics of risks and those based on the
types of insurance, term of validity, premiums, main obligations
of the parties and their involvement in the agreement,
and reinsurance provisions.
3. Law Number 22400 regulates the brokerage industry
regarding the placement of insurance contracts. It contains
requirements for brokers' licensing and control, as well as
applicable sanctions.
There also are rules governing the on-going development of
this industry that are focused on usual requirements and resolutions
issued by the Insurance Department, such as Resolution
Number 21523/92, as amended, that regulates Law Number
20091; Resolution Number 35615/11 that regulates the reinsurance
business, and Resolution 24828/96 that regulates Law
Number 22400 of brokerage.
§ 1:2 Market structure
The structure of the Argentine insurance market includes prop-
Argentina § 1:2
3
erty, life, public liability, worker's compensation, and surety
insurance. Under Argentine law, health insurance is subject to
control by the Ministry of Health, outside the scope of the
Ministry of Economy and the Insurance Department.
Finally, reinsurance contracts can be included within the insurance
framework. Under such contracts, insurance carriers
transfer the primary liability assumed under insurance contracts
whereby their business is carried out.
II. PRINCIPLES OF INSURANCE LAW
§ 1:3 Meaning of insurance
Although there is no unanimous agreement among legal writers
on how to dene the insurance contract, under section 1 of
Law Number 17,418 (the “Insurance Law”), “Insurance is a
contract whereby the insurer agrees, upon a premium or
consideration, to compensate damage or comply with an agreed
obligation if the anticipated event occurs”.
§ 1:4 Elements of contract
Parties
There are generally two parties to an insurance contract, the
insurer and the insured. Occasionally, there may also be a
policyholder and a beneciary. The insurer is the party who assumes
the risk and, upon the occurrence thereof, is under a duty
to pay the agreed consideration for that event under specic
conditions. Therefore, the main obligation thereof is to indemnify
the insured. Under domestic rules, the status of insurance carriers
can only be awarded to stock companies, cooperative or
mutual companies, branches or representatives of foreign
companies, and ocial or semi-public bodies. Furthermore, they
must be expressly approved by the Insurance Department.
The insured is the party on whom the risk lies and who is the
owner of the insurable interest. The obligations are to pay for the
premium, keep the status of the risk, report the occurrence of a
loss, report any damage sustained, prevent the loss, avoid and
minimize damage, and refrain from making any changes in any
damaged items. The policyholder is the party who contracts the
insurance and who is under a duty to pay for the premium. On
certain occasions, such as in case of an insurance taken in the
name of a third party, a policyholder may be a person other than
the insured but, in most cases, it is the same person.
Finally, the beneciary is the person that has the status of
creditor of the insurer's liability. Usually, the beneciary is the
§ 1:2 International Insurance Law & Regulation
4
insured but, on certain occasions, such as in the case of life insurance,
the beneciary is a third party who is not a party to the insurance
contract.
Insurable Interest
Under section 2 of the Insurance Law, the subject matter of an
insurance contract may be any kind of risk, provided that there
is an insurable interest, unless otherwise expressly forbidden by
law. Furthermore, under section 60, which is related to property
insurance, a risk may be insured provided that there is a lawful
economic interest in the non-occurrence of the loss.
Hence, the insurable interest is a pecuniary relationship between
a person and a thing or to a right of such a nature that
there is a concern in the non-occurrence of the risk that would
lead to a reduction of its value or to a pecuniary loss for the
holder of such interest. Thus, the insurable interest scope is
threefold. i.e., property, lawful juridical relationship thereto, and
exposure thereof to a certain risk.
The insurable interest is of material importance to the insurance
contract because it is the subject-matter thereof. It should
exist as from the start date of coverage (although it may be
future, if the existence thereof is anticipated) and, most importantly,
when the loss occurs. Furthermore, it should be accurately
ascertained and mentioned in the policy pursuant to section 11 of
the Insurance Law. Under the Insurance Law, such interest
should be lawful, i.e., not contrary to law or good customs.
Furthermore, the value of the insurable interest determines the
maximum amount of the indemnity that the insurer may pay for.
Formation
An insurance contract arises by mutual consent, i.e., for the existence
thereof a simple concurrence of wills is sucient. Under
section 4 of the Insurance Law, the mutual rights and obligations
of the insurer and the insured come into eect as from the date of
execution of the agreement, even before the policy has been
issued. Furthermore, payment of premium is not a condition for
existence of the contract.
The insurance proposal, which is technically presented by the
insured, must be in writing, as required by the Insurance Department,
and it is not binding on the parties until it has been accepted
by the other party. Acceptance of the agreement requires
a positive representation of the insurer's will, i.e., its silence does
not purport to be an acceptance but a refusal to the insurance
proposal.
Section 1152 of the Civil Code should also be noted. An amend-
Argentina § 1:4
5
ment to the oer made upon acceptance must purport to be a proposal
for a new contract. Furthermore, if the insurer issues an
amended policy instead of presenting a counter-oer, the insured
may contest it within one month. If it does not do so within such
term, the amendment will be deemed to have been accepted by
the insured (provided that the insurer has advised the insured of
this right through a prominent clause inserted on the reverse
side of the policy, as provided by section 12 of the Insurance
Law). If the insured contests the amendment, the validity of the
remaining clauses of the contract is not aected, although the
insured also may rescind the contract at that time.
§ 1:5 Void and voidable contracts
Under Argentine law, the nullity of legal acts is governed by
the Civil Code. Hence, the insurance contract, being a legal act,
is included in the provisions thereof, aside from the special
characteristics provided in its specic rules.
Under the Civil Code, a legal act executed by persons who are
absolutely incapable (section 1041) or relatively incapable as to
the act (section 1042), or by a person who is forbidden to exercise
the act (section 1043) is null and void. Furthermore, a legal act is
null and void when a party has proceeded with false pretenses or
fraud as presumed by law or where the act's principal purpose is
prohibited or it does not meet the formalities prescribed by law
(section 1044).
Furthermore, a legal act is voidable when the parties thereto
have acted while under an accidental incapacity or while deprived
of their reason due to any cause, when their incapacity under law
was not known at the time of execution of the act, when the prohibition
of the act's purpose was not known owing to the need for
an investigation of fact, or when any vices of error, violence,
fraud, or pretense are present (section 1045).
Under the Insurance Law, an insurance contract may be void
under certain circumstances; one of these situations arises when,
at the date of execution of the contract, the loss has already occurred
or the likelihood of its occurrence has disappeared, i.e.,
upon the inexistence of the risk, the insurance contract is void.
Another case is non-disclosure (see below), i.e., under section 5
of the Insurance Law, a contract is void when the insured entered
into the contract upon a misrepresentation or concealment of
known circumstances even if it was made in good faith and, in
the judgment of an expert witness, had the insurer known the
status of the actual risk, it would have not entered into the agreement
or would have amended its conditions. If non-disclosure is
§ 1:4 International Insurance Law & Regulation
6
not fraudulent and it is claimed before it becomes time-barred,
the insurer may void the contract by returning the collected
premium less costs.
The Insurance Law also provides for voidance of any contract
that is executed with an aim at unfair enrichment. Section 62
provides that this solution is applicable when the insured amount
is substantially higher than the actual market value of the
insured interest, and the insured or policyholder knowingly fails
to ask for a reduction thereof, and thus seeks to enrich unjustly
out of the insured surplus. One other scenario is provided in section
68, whereby group insurance contracts are void when the
insured enters into them for the purpose mentioned above, as the
insured should not seek to secure aggregate indemnity that
exceeds the sustained damage.
§ 1:6 Premiums
A premium is the insurance price and the insurer's compensation
for the assumed liabilities. In technical terms, a premium
should be the cost of the risk's guarantee, whose economic consequences
are assumed by insurer. Determination is generally
based on three factors:
(1) Assumed risk;
(2) Period of time that such risk is assumed; and
(3) Amount of the insured value.
All of these elements make up the so-called net, pure or technical
premium, which also varies on the basis of the interest rate,
as accrued from the investment of the funds collected by the
insurer, and the administrative expenses and the prot, as
calculated by the insurer. All of these elements lead to the gross
or written premium, which is the one paid by the insured.1 Fixed
rates must be approved by the Insurance Department.
Premiums can be distinguished according to their payment
terms and frequency, such as a one-o or a periodic payment or a
yearly, multi-year, or installment basis. A premium is characterized
by its entirety and invariability. The former characteristic
implies that it is due as from the inception of the contract and is
earned for the whole period, no matter what the payment terms
are. The latter characteristic arises from its continuity over time.
Nevertheless, a premium can vary upon ination-adjustment
clauses, changes in the risk or the insured interest, or a provision
issued by the controlling authority.
[Section 1:6]
1Halperín, Insurance Lessons (1987), p. 5.
Argentina § 1:6
7
§ 1:7 Disclosure and misrepresentation
An essential obligation of the insured is to state and disclose
the risk that will become the subject matter of the insurance
contract. Hence, this pre-contractual obligation (as should be
performed before the mutual agreement) allows the insurer to accurately
dene and ascertain the insured risk.
The obligation is closely related to a specic concept of insurance
that is called non-disclosure, regulated in article II, chapter
I (sections 5-10) of the Insurance Law. Pursuant to section 158 of
the Insurance Law, sections 5, 8, and 9 may not be amended by
the parties, while sections 6 and 7 may be amended only to the
benet of the insured.
As mentioned above, the concept of non-disclosure is provided
in section 5 of the Insurance Law, and it is dened as any misrepresentation
or concealment of known circumstances even if
made in good faith which, in the judgment of an expert witness,
if the insurer had been warned of the status of the actual risk, it
would have not entered into the agreement or would have
amended its conditions. This situation is punished with voidance
of the contract, and the insurer must contest it no later than
three months after learning about the misrepresentation or
falsehood. If the loss occurs within such term, the insurer is
under no duty to make any payment (section 9).
When non-disclosure is not fraudulent and it is claimed within
the term of one year, the insurer may void the contract by returning
the collected premium, less costs, or, if the insured accepts,
readjust it to the actual status of the risk. In life insurance
contracts, readjustment may be imposed on the insurer when
nullity would be detrimental to the insured if, in the judgment of
an expert witness, the contract may be adjusted (section 6).
When non-disclosure is fraudulent or willful, the insurer is
entitled to the premiums earned for the elapsed periods and for
the period during which non-disclosure or misrepresentation has
been claimed (section 8). If the agreement is executed by an
insurer's representative, non-disclosure will be judged upon an
analysis of the knowledge and the conduct of both the principal
and the agent, unless the latter acts simultaneously for the
insured and insurer. The same criterion will be applied to insurance
taken in the name of third parties regarding the policyholder
and the insured third party (section 10).
§ 1:8 Conditions and warranties
In insurance contract law, it is usual to refer to broad-form
§ 1:7 International Insurance Law & Regulation
8
conditions, as they are typically adhesion contracts. Due to the
fact that the parties are not in equal conditions, several rules
and court judgments have been issued to avoid abuses.
Under section 158 of the Insurance Law, a policy provision that
is in violation of revocable legal rules may not be part of the
broad-form conditions, except for those cases where the law
establishes that it may be revoked by an “otherwise” clause.
Furthermore, policies must be led with and approved by the Insurance
Department pursuant to sections 23-25 of Law Number
20,091. In Argentina, these issues have resulted in high standardization
of each type of insurance contract; the broad-form conditions
of some policies contain a verbatim transcription of some
sections of the Insurance Law.
There also are specic conditions, i.e., provisions applied to
each case in particular. Section 11 of the Insurance Law provides
that each policy should contain the names and addresses of the
parties, the interest of the insured person, the assumed risks, the
moment at which such risks are assumed, the term of validity,
the premium or consideration, and the insured amount. Other
specic conditions may be included.
§ 1:9 Cancellation
Under section 18 of the Insurance Law, without prejudice to
the term of validity provided in the insurance contract, except for
life insurance, it may be stipulated that the parties are entitled
to terminate the contract without the need to express a cause. If
the insurer exercises the right to rescind the contract, a prior notice
of not less than fteen days should be given and the premium
should be reimbursed pro-rata the non-elapsed period of time. If
the insured decides to rescind the contract, the insurer is entitled
to the accrued premium for the time elapsed on the basis of shortterm
rates.
When the contract has an undened term of validity, pursuant
to section 19, the parties may terminate it under the same
conditions. Such section also provides that a waiver of the right
to terminate the contract for a certain period is lawful, provided
it is not longer than ve years. Voluntary winding-up of an insurance
company and a portfolio assignment approved by the controlling
authority does not provide grounds for termination of the
contract.
The Insurance Law establishes other situations that may lead
to contract rescission or cancellation. For example, under section
31, when a policy is delivered before collection of the premium,
the insurer may repudiate the contract no later than one month
Argentina § 1:9
9
after the date of report thereof, although the contract may not be
terminated if the premium is paid before the expiration of the
reporting period. The insurer may not be responsible for a loss
occurring within the reporting period once two days have elapsed
after service of notice to exercise termination.
Another situation is provided in section 37; thereunder, an
increase in the assumed risk leads to a special event for termination
of the contract if such situation had existed at the time of execution
of the contract and, in the judgment of an expert witness,
it would have prevented the contract or amended its conditions.
Finally, termination for partial loss is possible. When a loss
results in only partial damage, either party may terminate the
contract before the payment date of indemnity. If the insurer
decides to terminate the contract, its liability expires 15 days after
notice has been given to the insured, and the premium should
be reimbursed for the remainder of the current period proportionally
to the dierence of the insured sum. If the insured decides to
terminate the contract, the insurer will be entitled to the
premium for the current period and shall reimburse all premiums
collected for future periods.
§ 1:10 Subrogation
Under section 80 of the Insurance Law, the rights of the
insured against a third party arising from a loss are transferred
to the insurer up to the amount of paid indemnity, i.e., the insurer
is not entitled to assert a right against a third party that is
responsible for a loss but it succeeds to the insured's right because
its obligation to pay the insurer arises from the contract, not
from the event caused by a third party.
A third party may enforce against the insurer the same claims
that it is entitled to enforce against the insured. Furthermore,
the insurer may not waive subrogation if, as a result thereof, the
insurer would collect double indemnity because it would lead to
unfair enrichment. Under the same section, the insured is
responsible for any action that may be detrimental to the insurer;
for example, consenting that the third party may be discharged
from liability in whole or in part.
Subrogation does not operate when it is detrimental to the
insured; for example, the insured is, under civil law, responsible
for the third party who has caused the damage, such as a relative
or dependent person. Subrogation does not operate either in (life
and casualty) personal insurance because the insured or beneci-
§ 1:9 International Insurance Law & Regulation
10
ary's right does not come to an end upon collection of insurance,
which is not of a remedial nature.1
The requirements for subrogation to take place are the existence
of a valid contract and of a valid payment thereunder. In a
case against a third party, the insurer is only required to give evidence
thereof to show a valid instrument for collection. Finally,
subrogation expenses are always borne by the insurer because
they arise out of its own interest.
§ 1:11 Interpretation of insurance contracts
In insurance law, apart from the general rules applied to interpretation
of contracts, there are some specic rules. To understand
these special characteristics of an insurance contract, it
should be noted that this is a contract that is executed using a
standardized format, i.e., it contains broad-form conditions that
are not discussed with the insured. Even though such conditions
should be approved by the Insurance Department, which intends
that they be as equitable as possible, the exercise of this obligation
is not satisfactory. The insured is many times unaware of
such conditions, and is not capable of understanding their actual
scope.1
One of these characteristics is the principle of good faith of the
parties, which is inuenced by the unpredictable nature of the
contract. Thereunder, the insurer, in general, relies on the
insured's information regarding the status of risk; and conversely,
regarding protection of the insured, the insured is at the mercy of
the monopolized action of the insurer.
The extent of risk and granted benets should be literally
construed. Nevertheless, any ambiguous or obscure clause should
be interpreted in favor of the insured, because it was drafted by
the insurer and, section 11 of the Insurance Law provides that
the insurer should deliver a clearly written policy to the
policyholder. Any restriction to the free activity of the insured
should be expressly provided and the same guideline applies to a
restriction to generally assumed liabilities, which should be
included in the special conditions of the contract.
Furthermore, a clause that establishes a cancellation of an
insured's right should be restrictively interpreted as to its scope
[Section 1:10]
1Halperín, Insurance Lessons (1987), at p. 72.
[Section 1:11]
1Halperín, Insurance Lessons (1987), at p. 40.
Argentina § 1:11
11
and the facts that may give rise to its legal basis; the wording
thereof should be clear. Any charge imposed on the insured
should be reasonable. Finally, handwritten clauses prevail over
printed clauses because they are regarded as particular or special
conditions of the contract.
§ 1:12 Punitive damages
Punitive damages are not a typical legal concept in Argentine
law, but it is in common law. Nevertheless, some years ago, it
was somehow incorporated to the Consumer Protection Law (Law
Number 24,240). Section 52 bis of the Consumer Protection Law
provides as follows:
“Punitive Damages. When a supplier does not comply with its
legal or contractual obligations to the consumer, at the request of
the aggrieved party, the judge may impose a civil penalty in
favor of the consumer, to be graded on the basis of the seriousness
of the fact and other circumstances of the case, regardless of
whether there is another applicable compensation. When more
than one supplier is responsible for non-compliance, they will be
held severally liable to the consumer, regardless of any other
recovery action that they may be entitled to. The civil penalty to
be imposed may not exceed the maximum amount of the penalty
provided in section 47b) hereof.”1
The application of the above-mentioned section requires the existence
of a consumer relationship, as that is the eld of application
of the Consumer Protection Law. It is usual for companies
engaged in the provision of goods or services to consumers to
take coverage against punitive damages under a public liability
insurance contract. Punitive damages are not provided in the Insurance
Law, the Commercial Code or the Civil Code.
III. SPECIAL TYPES OF INSURANCE
§ 1:13 Fire insurance
Fire insurance is regulated by the Insurance Law. Section 85
denes the damage that may be subject to indemnity and provides
that the insurer must indemnify for damage caused by the direct
or indirect action of re. It also provides that indemnity should
cover any insured property that was lost during the re.
Damage caused by explosion or lightning is equal to that caused
[Section 1:12]
1Currently, the maximum amount of the penalty established in section
47b) is Ps. 5,000,000.
§ 1:11 International Insurance Law & Regulation
12
by re, but the insurer is not under a duty to cover damage if the
re or explosion was caused by an earthquake. Section 87
prescribes the manner in which indemnity amounts should be
determined:
1. For buildings, based on the value thereof at the time of loss,
except when reconstruction is agreed upon;
2. For goods manufactured by the insured himself, based on
the manufacturing cost and, for other goods, based on the
purchase price;
3. For animals, based on the value they had at the time of the
loss;
4. For raw materials, harvested fruits and other nature
products, based on the average prices thereof on the day of
occurrence of loss; and
5. For furniture and household goods and other utensils, tools
and machinery, based on their value at the time of the loss.
The parties may agree that the indemnity be based on their
replacement value. When a re insurance contract includes
compensation for loss of prots, the value thereof may not be
agreed upon. When it has been agreed that the damaged property
should be rebuilt or replaced, the insurer is entitled to
demand that compensation be actually used for that purpose and
request a guarantee. In these circumstances, a mortgagee or
pledgee may not object to payment except in the case of arrears
in payment of the debt by the debtor.
§ 1:14 Debt insurance
In general, in the insurance system, debts may be generically
and globally insured through credit insurance (also known as
“insolvency” insurance), whereby a creditor is covered regarding
his insurable interest upon the insurer assuming the risk of
default in all business credits granted. In specic terms, coverage
takes the form of a bond insurance, whose purpose is to cover
damages deriving from the simple failure to comply with an
obligation undertaken by the debtor, under the insurance
purchased.
Apart from the above-mentioned dierence regarding the
insured peril, these two types of insurance contracts dier as,
under a credit insurance contract, the policyholder and the
insured are the same person while, under a bond insurance
contract, they are dierent persons, as the policyholder is the
obligation's debtor. Another dierence lies in the manner of
contracting because, under credit insurance, the creditor seeks to
cover all of its business volume while, under bond insurance,
Argentina § 1:14
13
certain transactions are insured, i.e., separate individual policies
are purchased.
Credit insurance is customarily used to insure business and
nancial transactions. In the case of business transactions, the
insurer agrees to indemnify the insured for a loss sustained upon
default in the nancing granted to purchasers of his manufactured
or sold products. In the case of nancial transactions, insurance
is customarily used to insure loan agreements that are
entered into between bank entities and their clients to assist
such clients in the acquisition of goods.
Furthermore, bond insurance has been designed to guarantee
that a creditor of a non-pecuniary liability will be indemnied for
a damage arisen by default therein. Therefore, it is of the utmost
importance to provide a detailed denition of default at the inception
of the contract.
Argentine case law tends to make the insurer responsible for
the consequences of a decient denition of the assumed risk
under a contract because it not only should have the required
technical know-how but also it is the party who is usually in
charge of drafting all contractual conditions. In this regard, it is
understood that, under a bond insurance contract, loss arises
simply upon the non-compliance with the contract by the debtor
of the underlying obligation, regardless of the extent of such failure
or the debtor's fault or innocence, except for the excluded
perils.
§ 1:15 Liability of motor vehicles
Motor vehicle insurance is sold through combined coverage,
which varies according to the case: public liability insurance to
third parties (passengers and non-occupants of the vehicle), insurance
against robbery (and theft) and insurance for damage to
vehicle and re.
Regarding coverage for material damage, the insurer should
pay an indemnity when loss arises out of damage caused by other
vehicles, third parties, animals, or any other external agent that
is beyond the vehicle, either while it is moving, being towed away,
or parked. Damage arising out of re, lightning, explosion,
overturning, tumbling, and sinking is also covered.
Typically, apart from willful misconduct and gross negligence,
coverage specically excludes acts of war, civil commotion, and
elements such as tornadoes, meteorites, or hurricane (hail is usually
insured), seizure by public authorities, terrorism, strikes,
and speed tests. Another specic exclusion is failure to have a
driving license.
§ 1:14 International Insurance Law & Regulation
14
Vehicle load is also important and it can become an exclusion
factor if it has had an inuence in the accident; for example, in
the case of bad stowage, excessive, explosive or inammable
cargo. The insurer will neither pay indemnity if a vehicle is towing
another away, unless otherwise provided for, or if the towing
service is occasional or being provided out of an emergency.
Purchase of coverage for total loss or robbery is usual and, on
some occasions, partial coverage is added. Total damage takes
place when the repair cost is equal to or higher than 80 per cent
of the value assigned to the vehicle under the insurance. The
insured may opt to collect such percentage and retain the vehicle
or collect 100 per cent and transfer title to the insured vehicle to
the insurer. Purchase of public liability insurance for damage to
third parties is compulsory (under section 68 of the Trac and
Road Safety Law Number 24,449).
§ 1:16 Private liability insurance
The Insurance Law provides for private liability insurance,
whereby the insurer agrees to hold the insured harmless for a
debt owed to a third party that arises from liability provided in
the contract as a result of an event occurring within the agreed
term.
The insurer's guarantee includes payment of expenses as well
as court and out-of-court costs to answer a third-party's relief in
a civil case and payment of the costs arising out of a defense in a
criminal procedure when it accepts such defense. The insurer
may deposit and pay for the insured amount and the expenses
and costs that may have accrued up to that date and thus, the
insured has exclusive management of the case; in such a case the
insurer is no longer liable for any further subsequent expenses or
costs that may accrue thereafter.
Any such expenses and costs are payable insofar as they were
necessary and are payable even when the third party's relief has
been denied. The Insurance Law establishes a proportional rule
whereby, if the insured must bear part of the damages, the
insurer must reimburse expenses and costs in the same proportion,
unless such expenses have accrued out of an overtly unfair
decision taken by the insurer who, in such case, must pay them
in full. The insured is not entitled to indemnity if the event has
arisen out of the insured's willful misconduct or gross negligence.
Furthermore, the insured is obliged to report the event giving
rise to the insured's potential liability no later than three days
after occurrence thereof, if the insured is aware or should have
been aware of such event, or as from the date of the claim led
Argentina § 1:16
15
by the third party if the insured was unaware thereof. Once judgment
has been rendered, the insurer should comply with its
obligation within the specied term therefor. The insured may
not acknowledge its liability or enter into a transaction, unless it
has been consented by the insurer. The Insurance Law establishes
that the insurer may review the proceedings by examining the
administrative or judicial les arising from or related to the
investigation of the loss and by appearing as a civil party in a
criminal proceeding.
Section 118 of the Insurance Law provides that the aggrieved
party has a lien on the insured amount and its accessories, with
a priority over the insured and any of its creditors, even in the
case of bankruptcy or civil restructuring. The aggrieved party
may summon the insurer as a guarantor until the case is set for
discovery (in such an event, the complaint should be led before
the judge sitting in the place where the event occurred or at the
insurer's domicile). The insured also may so summon the insurer
within the same term and with the same eects. Finally, judgment
rendered will become res judicata in respect of the insurer
and will be enforceable against it to the extent of the insurance.
In that proceeding or upon the enforcement of judgment, the
insurer may not le a defense that has arisen after the loss.
§ 1:17 Professional liability insurance
In practice, professional liability insurance is similar to public
liability insurance, but the former seeks to address a personal,
material and consequential damage that professionals may involuntarily,
out of their errors or omissions, have caused to their
clients in the course of their practice as well as any damages that
could derive therefrom.
The insurer assumes the economic consequences of the events
that have occurred and are covered by the contract by curing the
damage caused by the insured to a third party up to the limit
provided in the insurance policy. This type of insurance is not
only a guarantee and coverage for professionals but also for third
parties who hire their services because, otherwise, their own assets
could be taken to satisfy that liability only when nal judgment
for professional negligence has been rendered by a judge.
§ 1:18 Pollution liability insurance
Under section 22 of the General Environmental Law (Law
Number 25,675), a person, whether natural or articial, public or
private, who carries out an activity that is hazardous to the
environment, eco-systems and their constituent elements must
§ 1:16 International Insurance Law & Regulation
16
take sucient insurance to ensure that remediation of a damage
caused is properly covered.
The “environmentally hazardous activities” are listed in Resolution
Number 177/2007 of the Secretariat of Environment and
Sustainable Development. The list includes extraction of oil, gas,
coal and minerals, exploitation of mines, food and beverage
manufacturing, and manufacturing of chemical products and
plastics.
The “Minimum Sucient Insurable Amount” should be noted,
as calculation thereof is used to determine whether the guarantee
established under section 22 of Law Number 25,675 is sucient
to aord remediation of the environmental damage. The purpose
of this rule is to quantify the costs of a potential restoration of
environmental damage in case of occurrence of a loss. Calculation
is made upon certain criteria, such as basic amount, vulnerability
factors, factors arising from handling hazardous elements and
elements subject to scheduled disposal, and probable impact on
restorable resources, such as water, soil, subsoil and coastal
areas.
The insured amount may not be lower than the Minimum Suf-
cient Insurable Amount. Hence, as it is a minimum amount, the
owner of the activity may purchase a policy in excess of such
coverage based on special characteristics inherent to the activity
or for specic contractual reasons as agreed upon with the
insurer; and it also may increase such coverage by purchasing insurance
against third parties, property, labor, or special
guarantees, provided that the required minimum is not aected.
§ 1:19 Life insurance
Life insurance is governed by the Insurance Law, sections 128-
148, which provide that life insurance may be purchased to cover
the life of the purchaser himself or herself or that of a third
party. If it covers death, written consent of the third party (or his
legal representative in case of an incapable person) is required.
Life insurance may not be taken to cover the death of an incapacitated
person or a minor less than 14 years old.
Regarding information to be submitted by the insured, after
three years from the date of inception of the contract, the insurer
may not rely on non-disclosure, unless it involves willful
misconduct. Nevertheless, when age has been misstated, the
insurer may terminate the contract when the true age is in excess
of the limitations established in its commercial practice to assume
the risk. If such limitation is not exceeded and the age is
higher than the reported one, the insured capital will be reduced;
Argentina § 1:19
17
if it is lower, the insurer must return the surplus of the paid
premium and readjust all subsequent premiums.
An increase in risk should be reported only if it arises out of
reasons that are specically provided in the contract. Changes in
the insured's profession or activity give rise to termination if the
risk is increased in such a way that, had it existed at the time of
inception of the contract, the insurer would not have entered into
it. The insured may repudiate the contract without any limitation
once the rst term of the insurance has ended.
Three years after the inception date of the contract and
provided that he is not in arrears in the payment of premiums,
he may at any time opt to convert the insurance into a paid-up
one for a reduced amount or a shorter term, or surrender, i.e.
terminate, it, and thus he becomes entitled to receive a share of
the cash reserves accumulated by the insurer (guaranteed surrender
value).
On the other hand, when the insurer is discharged for any
cause after three years, it is no longer liable to the insured for
any payment, except for the above mentioned guaranteed surrender
value. The insurer may be discharged when the person
whose life is insured commits suicide, unless the contract has
been continuously eective for three years. It also is discharged if
the person whose life is insured dies during a criminal activity.
In insurance to cover the life of a third party, the insurer is
discharged if the death has been intentionally caused by an illegal
action of the purchaser. Furthermore, a beneciary who
intentionally causes the death of the insured through an illegal
action is deprived of any right.
Under a life insurance contract, it can be agreed that the
capital or annuity payable in case of death be paid to a surviving
third party who is determined or to be determined at the moment
of the event. Appointment thereof should be made in writing, and
the purchaser can freely revoke the appointment, unless it is
made for consideration. The appointed third party acquires a
right of his own at the time of occurrence of the event and, when
his appointment is made for consideration, it can be earlier xed.
If the purchaser does not appoint a beneciary or, for any reason,
such appointment is ineective or nugatory, it is understood
that his heirs have been appointed. Under Executive Order
Number 1567/74, whereby a compulsory collective life insurance
was established to cover the death of employees on the payroll,
the cost of such insurance is borne by the employer, who will be
directly liable to pay for the above mentioned benet in case it
failed to take the pertaining insurance.
§ 1:19 International Insurance Law & Regulation
18
§ 1:20 Social insurance
Social insurance is not customary in Argentina because the socalled
unemployment insurance or retirement and surviving
spouse benets, as well as health insurance are, as noted below,
payments granted under the welfare programs established by the
Government.
Until 2008, the Managing Companies of Pension and Surviving
Spouse Benets Funds (AFJP, by its Spanish acronym) had been
in existence. They were private for-prot companies engaged in
the management of funds deriving from the pension contributions
paid by workers who opted to be included in such regime.
They did not operate as insurance carriers (although some AFJPs
were owned by insurance carriers) and, in 2008, the system was
repealed upon the enactment of a law and a fully state-run regime
was established.
§ 1:21 Medical insurance
Medical coverage in Argentina is provided by health insurance
companies and prepaid health care companies, and it is governed
by Law Number 23,661 (National System of Health Insurance)
and Law Number 23,660 (Health Care Companies). Therefore, it
is not customary to take medical insurance except in the case of a
trip, as noted below.
§ 1:22 Travelers' insurance
In Argentina, there is not a specic rule for travelers' insurance
and no specic insurance contract exists; however, there is a
set of combined insurance contracts. Traveler's insurance may
consist of only a casualty insurance contract or it may include a
variety of options, such as public liability, life or health, and even
loss of baggage, all of them purchased out of a range of coverage.
§ 1:23 Marine insurance
Marine insurance contracts are governed by the Maritime Law
(Law Number 20,094), sections 408-467, and, in case of silence,
by the Insurance Law. The Maritime Law establishes that the
general provisions are applicable to all regulated marine insurance
contracts, including the provision that, if a trip involves
combined routes by sea and land or air and it is not otherwise
agreed upon, the rules governing marine insurance are applicable.
It contains a list of insurable interests (which extend to “vessels
under construction”) against perils of navigation; it excludes
risks arising from an intentional act of the owner or holder of the
Argentina § 1:23
19
insured interest; it establishes that the contract is void when the
insured had prior awareness of the occurrence or inexistence of
the risk; it provides comparative negligence, with a fair liability
apportionment system, when there is more than one insurer for
the same interest or risk and annulment of the insurance for voluntary
changes in the course of the voyage.
After these broad provisions, the Law regulates the insurance
of interests especially related to the vessel itself and the insurance
of interests related to the carried goods. It contains regulations
for “other insurances”, such as insurance for the earning of
freight, gross and net freight, ticket pricing and loss of prots,
and public liability for damage to third parties. Sections 583 and
584 of the Law regulate the action for provisional and prompt
payment of the indemnity arising from an insurance contract.
When an insured exercises an action for general average or of
abandonment, the insurer may contest the right of the insured.
However, the insured is entitled to demand prompt provisional
payment of indemnity by means of ancillary proceedings within
the same lawsuit by submitting evidence of his right and oering
a satisfactory guarantee.
§ 1:24 Aviation insurance
Aviation insurance is regulated by the Aviation Code, sections
191-196. Airspace operators are under a duty to insure their permanent
and temporary personnel that perform tasks on board
against any accident that may occur in the course of their service
in accordance with all labor rules applicable to the business.
Furthermore, they are under a duty to take insurance for eventual
damage to passengers, baggage or goods, against third parties
on the grounds and for out-of-charge carriage. It may be
replaced by a cash deposit or a bank guarantee. A foreign aircraft
that does not provide evidence of coverage against possible damage
to carried persons or goods or to third parties on the ground
is banned from Argentine airspace.
IV. INSURANCE MARKET
§ 1:25 Establishment of insurance company, branch, or
subsidiary
Licenses to carry out insurance activities are granted to stock
companies, cooperatives and mutual insurance carriers, branches
§ 1:23 International Insurance Law & Regulation
20
or representatives of foreign companies, and ocial or semi-public
agencies and bodies, federal, provincial or municipal1.
In all cases, such entities must be exclusively engaged in insurance
activities. To operate as an insurance carrier, authorization
is required from the Insurance Department.2
Additional requirements exist for various types of insurance,
such as retirement insurance3 and reinsurance.4 A foreign insurance
carrier may seek establishment in Argentina and carry out
insurance activities on condition that it complies with the requirements
mentioned below and secures authorization from the Insurance
Department, provided that evidence of reciprocal treatment
in the country of origin is submitted.5 A foreign company
may set up a subsidiary in which it will own a majority interest6
and, in such a case, it will be granted the status of a domestic
company. Alternatively, a foreign company may set up a branch.
In both cases, the entity must be registered with the Inspection
Board of Legal Entities and be granted a specic license by the
Insurance Department.
§ 1:26 Foreign insurance carrier establishing a head
oce
Requirements
A foreign company may set up a subsidiary, i.e., a local
company where it is the majority shareholder. The foreign
company must have been registered with the Public Registry of
Commerce to secure its capacity to participate as a shareholder
in the domestic company.1 Once it has been given the status of a
domestic company, the same requirements that are applicable to
a domestic company composed of domestic shareholders are
applied.2 The main requirements include:
[Section 1:25]
1Law Number 20,091, section 2.
2Law Number 20,091, section 2.
3Resolution Number 19106.
4Resolution Number 24805.
5Law Number 20,091, section 5.
6Law Number 19550 governs corporations, and there must be at least two
shareholders.
[Section 1:26]
1Law Number 19950, section 123.
2Resolution Number 21523, section 2.3.1.
Argentina § 1:26
21
1. Filing of corporate articles or by-laws with the Inspection
Board of Legal Entities for registration;
2. Having fully paid-up minimum capital stock;3
3. Having the necessary term of existence, according to the
nature of the type or types of insurance to be engaged in;
and
4. Providing and receiving approval of insurance plans by the
Insurance Department.
An insurance plan includes a statement of the scale of
premiums to be applied and the technical grounds therefor, according
to the type or types of insurance in which the company
intends to be engaged, the text of the policies to be issued, the
text of the list of questions and the insurance proposal, and the
calculation bases for technical reserves when no applicable general
rules are in force.
The entity must be appropriate for the insurance market (“market
convenience”). The convenience decision lies exclusively with
the Insurance Department. Resolution Number 21,523/92, which
regulates Law Number 20091, and provides other requirements
that should be observed, such as those relating to the qualication
of directors and management.
Procedure
The procedure requires involvement of both the Inspection
Board of Legal Entities and the Insurance Department. The
Inspection Board of Legal Entities has original jurisdiction for
registration of a foreign company that is exclusively seeking to
participate as a shareholder of the subsidiary that will be engaged
in the insurance business. Once the parent company has been set
up, the subsidiary may be created upon the drafting of the bylaws
and an application to the Inspection Board of Legal Entities
for registration.
The Inspection Board of Legal Entities will, based on the
regulations in the insurance industry and the exclusive jurisdiction
of control vested in the Insurance Department, refer the records
to the Insurance Department so that it may issue its
opinion on the requirements inherent in the establishment and
the license for the entity.
§ 1:27 Foreign insurance carrier seeking to directly
establish a branch
Requirements
Agencies and branches of foreign-based insurance entities,
3Law Number 20,091, section 7C.
§ 1:26 International Insurance Law & Regulation
22
regardless of the type of company or the original incorporation
nature, are subject to the following specic requirements:
1. Comply with the conditions as provided for corporations
incorporated within Argentina;1
2. Come from a country that oers reciprocity for insurance
bodies incorporated within Argentina;2
3. Have representation in Argentina, with sucient powers to
carry out a and all juridical acts inherent to the purpose of
the entity before controlling authorities and third parties
and appear before a court of law;3 and
4. Have fully paid-up minimum capital stock.4
To set up an agency or branch, a foreign-based body should
submit the balance sheets of its parent company for the last ve
scal years.5 The indirect consequence of this requirement is to
ensure that the entity has been in the insurance industry for not
less than ve years. According to the type or types of insurance
to be engaged in, the minimum term of existence is variable. Insurance
plans must be approved by the Insurance Department.6
The insurance plan must include a statement of the scale of
premiums to be applied and the technical grounds therefor, according
to the type or types of insurance that the company
intends to be engaged in, the text of the policies to be issued, the
text of the list of questions and the insurance proposal, and the
calculation bases for technical reserves when no applicable general
rules are in force. The entity must be appropriate for the insurance
market. Notice of the following events must be given to
the Insurance Department, no later than 30 consecutive days after
occurrence thereof:
1. A change of the appointed agent or an amendment to the
power of attorney;
2. A change the entity may sustain regarding the background
information attached to the registration le;
3. As of the date of approval, an amendment to the corporate
bylaws, together with a true notarized copy of the documents
giving evidence of such amendment; and
[Section 1:27]
1Law Number 20,091, section 5.
2Law Number 20,091, section 5.
3Law Number 20,091, section 5.
4Law Number 20,091, section 7C.
5Law Number 20,091, section 7D.
6Law Number 20,091, section 24.
Argentina § 1:27
23
4. As of the date of application, a penalty that may have been
imposed in the country of origin by the competent authority.
Resolution Number 21,523/92, which regulates Law Number
20091, provides other requirements that should be observed by
branches.
Procedure
All the explanations noted above regarding the incorporation of
a subsidiary company apply to the establishment of a branch.
The dierence lies in the fact that, in this case, the company that
will apply for registration with the Inspection Board of Legal
Entities will be the parent company whose branch is seeking to
fully operate in Argentina.7
Supervision of actions that may occur overseas, which must be
evidenced by means of true and original documents authenticated
by the Hague Apostille, if applicable, will be more materially
important. In the case of a person subject to anti-moneylaundering
and counter-terrorist nancing prevention and
supervision measures in its country of origin, a certication issued
by the pertaining authority stating that such entity has not
been imposed a penalty regarding non-compliance with antilaundering
and anti-terrorism principles, standards, and rules as
disseminated by the Financial Action Task Force (FATF) should
be submitted.
§ 1:28 Crossborder market
Foreign Insurance Carriers Supplying Crossborder Services
Crossborder insurance is not possible in Argentina because, as
noted above, as per Law Number 20,091, section 2b), only
branches or agencies of foreign companies may carry out insurance
activities, i.e., a foreign insurance carrier that does not have
a local branch or agency cannot operate in Argentina.
Under section 6 of the Law, insurance carriers approved by the
Insurance Department may set up or close branches in Argentina
as well as branches or agencies overseas; however, they may not
carry out their business or own a branch if they are not
incorporated in the country. Furthermore, crossborder activity is
not possible because the Law requires that branches or agencies
of foreign companies hold and manage funds in Argentina, and
such funds should be equal to the minimum capital requirements
as demanded from insurance carriers incorporated in Argentina.
Domestic Insurance Carriers Supplying Services Abroad
The possibility of domestic insurance carriers rendering ser-
7Law Number 19550, section 118.
§ 1:27 International Insurance Law & Regulation
24
vices overseas will depend on the domestic rules of the foreign
country, except for the provisions in section 2 of Law Number
12,988 whereby insurance carriers are forbidden from insuring
an overseas person, property or any other interest that is not
within the national jurisdiction.
V. COMPETITION LAW
§ 1:29 Concerted practices among insurance, coinsurance,
or reinsurance, vertical and horizontal
structures
Regulation
As noted above, the insurance business is subject to specic
supervision by the Argentine Insurance Department.1 Intense
supervisory activities are in place to avoid abusive practices
caused by agreements among insurance carriers, reinsurance
companies, or brokers in the course of their marketing activities.
This control by the Insurance Department complements the generic
control that seeks to preserve the normal competition in the
market, as regulated by Law Number 25156 (the “Defense of
Competition Law”). Under the Defense of Competition Law, sanctions
are imposed on any action or practice that seeks to limit,
curtail, deceive, or distort competition or access to markets or
that purports to be an abuse of a dominant market position and
that may be detrimental for the general economic interest. This
rule provides a description of punishable practices as well as
practices and agreements that, due to economic size or market
importance, require prior approval. Jurisdiction for the application
of the rule lies with the National Bureau of Competition,
which reports to the Ministry of Economy.
Cooperation Agreements, Operation of Insurance Pools
Cooperation among insurance carriers takes place when it is
mutually agreed to distribute the same risk among them because,
based on its importance, it becomes convenient to distribute such
risk. Generally, insurance is taken on a unit basis, i.e., one
contract for each risk. Nevertheless, due to several reasons, it is
likely that the insured will seek to insure the same risk with several
companies or that this situation arises because the contracts
taken are not properly reviewed. Furthermore, it is likely that
dierent stages of the risk or loss are successively insured or that
it is sought to insure the insolvency of the original insurer.
[Section 1:29]
1Law Number 20,091.
Argentina § 1:29
25
Co-insurance refers to the anticipated orderly coverage of the
same interest and the same risk with dierent insurers, whereby
each of them assumes a portion of the total risk. It is usual that
one of the dierent insurers (in general, the one bearing the
highest risk) is in charge of collecting the aggregate premium
and, if applicable, settling the loss. In the Argentine market, this
insurer is called a “pilot”; however, they are not joint and severally
liable unless it is specically provided for.
With regard to the policyholder and the pilot company, only
one policy is issued as insurance taken in the form of coinsurance.
It provides the portion of liability to be assumed by
each of the participating insurers regarding the pertaining possible
loss. A copy of this contract is signed by each and every
participating insurer. It is likely that, for the sake of order, each
insurer may issue a policy reecting only its portion in the
contract. It may not be disclosed but it may be kept internally on
le as mere evidence for its accounting system.
Any communication, notice, or demand that the insured or
policyholder should serve on the insurers will be eectively served
on the pilot insurer; the policy should provide that representation
for these purposes lies on the pilot insurer. Regarding marine insurance,
section 413 of the Navigation Law establishes the provisions
for legal and judicial, representation. Law Number 17,418
does not include a provision for co-insurance. Another format of
insurance pool that is aimed at the assumption of risks is
reinsurance.
Claims Covered by Several Insurance Contracts
One of the formats of plural insurance arises spontaneously
because the insured has not reviewed the contracts he takes. In
such a case, the same interest and the same risk are insured
with dierent insurers. This situation may not necessarily lead to
the event of “double insurance”, where the aggregate insured
sum exceeds the insurable value because the aggregate amount
of the dierent insurance contracts taken may be lower than the
insurable interest.
In the event of plurality of insurance (which has not been taken
as co-insurance), upon learning about the situation, the insured
should give notice to the insurers so as to put the situation in order
under penalty of forfeiture of his rights. The notice to each
insurer should mention the other insurance contracts taken, the
names of the insurers and the insured amount. In case of loss,
each insurer will contribute pro rata the amount of its contract to
comply with the payable indemnity.
If an insurer pays an amount higher than that for which it is
§ 1:29 International Insurance Law & Regulation
26
liable, it can bring an action against the insured and all the other
insurers. Plurality of insurance generally arises over time. If the
repeated insurance contracts properly cover the insured's interest,
he will seek to recover the surplus of the paid premium
because, in case of loss, he will never collect more than one
indemnity. In such an event, he is entitled to ask for a reduction
of the most recent insurance contract or a reduction of the insured
amount to the amount that is not covered by the rst insurance,
together with a proportional reduction of the premium, under
section 69 of the Insurance Law.
Under the Insurance Law, double insurance is void when the
aggregate insured amounts in the cumulative plural insurance is
higher than the insurable value and such insurance was taken
with an aim at unfair enrichment. In such cases, the Insurance
Law provides that all insurance contracts taken for that purpose
are void, without prejudice to the insurers' right to collect the accrued
premium for the period during with they were unaware of
such intention, if they had not learnt about it at the inception of
the contract.
§ 1:30 Insurance mergers
The Company Law (Law Number 19550), sections 82-87,
provides the procedure to be followed by a corporate subject to effect
a merger. The procedure requires several prior commitments
between the parties, publication of notices, and participation of
third-party creditors to challenge the agreement. The Defense of
Competition Law provides that prior approval is required according
to guidelines regarding the economic importance of the
transaction.
Under section 46)1 of the Insurance Law, specic approval by
the Insurance Department is required, after an analysis of the
economic consequences of the transfer of contractual rights and
obligations arising from the merger. Obviously, the merger should
give rise to an entity qualifying as an approved insurance carrier.
Notice of the procedure must be published so that creditors or the
insured may issue a statement in that regard. Argentine legislation
also allows for partial or total assignment of an insurance
portfolio. A portfolio assignment requires the creation or maintenance
of legal reserves by the purchaser.
§ 1:31 Consumer protection
An insurance contract may be regarded as a consumer relationship
whereby the insurer agrees, upon the payment of a premium
or consideration, to provide a service consisting of the assump-
Argentina § 1:31
27
tion of risks by means of insurance coverage. Furthermore, it can
be stated that the protection and defense of insurance consumers
is provided in the Consumer Protection Law Number and such
rule applies to both the policyholder and the insured and is
extended to the beneciary third-party and the aggrieved party.
In the Argentine insurance regime, an insured is regarded as a
consumer, i.e., fully protected by the Consumer Protection Law.
Hence, the insured is entitled to several rights, such as the right
to choose the insurance carrier and broker, to be aware of the
regulations and contractual documents, to have the possibility to
secure more benecial clauses, to be aware of the broad conditions
of public order, and to have a transparent proceeding and a
clear procedure for collection. Consumers can rely on the protection
of the public oces created to that eect as well as the protection
of the administrative controlling authority, the Insurance
Department, which oers guidance to users and covers all the issues
that an insurance consumer should know.
Consumer protection has constitutional rank. The set of rules
protecting users and consumer

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