Insurance & Reinsurance

Last verified on Tuesday 16th October 2018

Peru

Enrique Ferrando and Gabriel Loli
Osterling Abogados

    Regulation

  1. 1.

    What are the sources of insurance and reinsurance law?

  2. The Insurance Contract Act (Law No. 29946, hthe Peruvian Insurance Act), which came into force on 27 May 2013, governs all types of insurance contracts, except those with explicit regulations. The General Banking and Insurance Act (Law No. 26702, the General Law) regulates the incorporation, operation and supervision of insurance companies. In addition, the Superintendency of Banking, Insurance and Private Pension Funds (the SBS) have issued additional regulations on insurance and reinsurance.

  3. 2.

    How and by whom is the insurance and reinsurance market regulated?

  4. The SBS is the body responsible for regulating the insurance sector in Peru. It is also responsible for the supervision of all activities in connection with insurance and reinsurance practice.

  5. 3.

    Is a fronting company required by a foreign insurer in order to write insurance?

  6. Yes. In Peru, a company must be authorised by the SBS to carry on a regulated activity such as write insurance. Specifically, Peruvian regulation establishes that for writing insurance, intermediate or other connected activities, it is mandatory to have the authorisation of the SBS. Thus, to write insurance locally, a Peruvian fronting company is required. However, according to article 10 of the General Law, Peruvian residents may take out insurance policies from foreign companies if they do so abroad.

  7. 4.

    Must reinsurance be written through a locally incorporated entity? Is it a requirement that reinsurance is written through a locally incorporated reinsurer?

  8. Peruvian reinsurers may write reinsurance in Peru and abroad. Foreign reinsurers seeking to reinsure risks taken out by Peruvian Insurers must have a BBB SandP or similar rating (Moody's: Baa2, Fitch Ratings: BBB, A. M. Best: B+). In every reinsurance operation, therefore, Peruvian insurers have to prove such ranking before the SBS.

    On the other hand, foreign reinsurers have the option of registering with the SBS to avoid the need to prove their ranking in every reinsurance transaction.     

    There are domestic and foreign reinsurance companies operating in Peru.

    Classification of terms

  9. 5.

    Are conditions, conditions precedent or warranties in insurance and reinsurance contracts recognised and what are the remedies for their breach?

  10. We do not have a special definition of conditions, condition precedents or warranties. However, the Peruvian Insurance Act – without a definition – uses categories such as burdens (such as the insured’s duty or responsibility), conditions or warranties in general terms.

    For example, the Peruvian Insurance Act provides that the parties may agree on the consequences of a breach of a burden or warranty, such as loss of indemnification, only if such breach was caused by fault or gross negligence.

    In addition, the Peruvian Insurance Act defines as “forbidden provisions” those clauses that provide for the loss of indemnification for breach of a burden that is not consistent with or proportionate to the claim for which indemnification is requested or that establish burdens that are extremely difficult or impossible to execute. In other words, to deny coverage of a loss based on breach of a burden, such breach must have a direct bearing on the loss.

    Therefore, although in our jurisdiction conditions, conditions precedent or warranties are not recognised as in common law, in insurance and reinsurance contracts the parties may agree on the consequences of a breach of a policy burden, condition or warranty. However, whenever a breach occurs, the causation principle must be considered in determining whether the breach caused the loss in any way.

    Duty of good faith, non-disclosure and misrepresentation

  11. 6.

    Is the legal concept of the ‘duty of utmost good faith’ recognised and what obligations is an insurer under prior to placement of the insurance?

  12. The Peruvian Insurance Contract Act is based on the duty of utmost good faith. Therefore, the insured is obliged to disclose all the information relating to the risk that the insurer is willing to undertake. Likewise, the insurer is obliged to provide the potential insured with sufficient convenient, clear and precise information that allows him or her to know the rights, duties and costs involved in concluding an insurance contract and the benefits, risks and conditions of the insurance offered.

    The relation between the parties to the insurance contract should be based on the duty of utmost good faith with regard to the disclosure of information at the time of the conclusion of the insurance contract and at any time that it is necessary owing to the modification of the risk.    

    It should also be noted that the insurer is bound by what is stated in the policy’s advertisement. Therefore, if there is any contradiction between what the advertisement states and the policy, the most favourable condition for the insured will prevail.

  13. 7.

    What are the remedies for breach of this duty by either party?

  14. If the insurer breaches the duty of utmost good faith, eg, if in the policy there are clauses in which its wording contradicts the offer, the provision will be void, and, in that scenario, the interpretation will be in favour of the insured.

    If the breach if made by the insured (ie, when due disclosure is not made or a false statement is made, by virtue of wilful default or gross negligence of the insured), the insurer has 30 days to declare the policy null and void after acknowledging such conduct. In this case, the burden of proving misrepresentation or non-disclosure lies with the insurer.

    If due disclosure is not made, or a false statement is made, but not by virtue of wilful default or gloss negligence of the insured, and the insurer becomes aware of it prior to the occurrence of any loss, the insurer has to propose a new policy to the insured with new terms in accordance with the actual risk insured (premium, coverage, limits, deductibles, etc). If the insured accepts the terms of the new policy, the premium has to be paid accordingly. If the insured does not accept the new policy or does not do so within 10 days, the insurer has the right to terminate the insurance contract. If the insurer becomes aware of the misrepresentation or the non-disclosure after a loss has occurred, the indemnity will be reduced proportionally, considering the difference between the premium convened and the one that would have been convened if the real risk status had been known.

    However, in such cases, the termination, revision or nullity and voidance of the policy will not proceed when: 

    • the insurer knew or should have known the real status of the risk when the policy was issued;
    • the circumstances of the misrepresentation or non-disclosure ceased before the occurrence of the loss; or when the misrepresentation or the non-disclosure, which are not by virtue of wilful default, had no influence on the occurrence of the loss or in the measurement of the indemnity;
    • the omitted circumstances were unanswered in the questionnaire provided by the insurer prior to the issuance of the policy and the insurer proceeds to sign the policy anyway; and
    • when the omitted or falsely declared circumstances reduce the risk.
  15. 8.

    Does this duty continue to exist following the purchase of insurance (during the operation of the policy)?

  16. Yes. The duty of utmost good faith will continue throughout the entire contractual relationship between the insurer and the insured.

    Reinsurance issues

  17. 9.

    Does local law recognise the following clauses in reinsurance contracts?

    • Follow-the-settlement and follow-the-fortunes clauses.
    • Claims control and claim cooperation clauses.
    • Aggregation clauses.
  18. In Peru there are only a few provisions relating to reinsurance policies. Therefore, it is fair to say that our regulation in this matter is pending for development. Therefore, some aspects of a reinsurance relationship will be governed by the common contractual provisions, contained in the Peruvian Civil Code.

    Although concepts such as claims control cooperation clauses, follow-the-settlements and follow-the-fortunes clauses and the incorporation of insurance terms into reinsurance are not specifically recognised in Peru, they are not forbidden either. That is why we consider that a tribunal or a court should apply a clearly drafted clause.

    Aggregation clauses have no legal treatment, but are usually agreed in insurance and reinsurance contracts.

    Notwithstanding the above, the SBS has recently allowed insurance companies to incorporate into the insurance and reinsurance contract a clause that allows the insurer to pay the loss when the reinsurer pays it (such as “pay when paid” provisions). This clause, however, could only be agreed in fronting operations when the insurer transfers the 100 per cent of the risk.

    Claim process

  19. 10.

    Who has the burden of proof when a claim is made and does the burden switch from one party to another?

  20. According to article 77 of the Insurance Contract Act, the insurer must prove the occurrence and monetary impact of the loss and the insurer must prove the circumstances that exempt it from the obligation to indemnify.

  21. 11.

    What is the time limit for providing notice to the insurer of an insurance claim under a policy?

  22. SBS Resolution No. 3202/2013 (regulation for the management and payment of claims) provides that the notice of the loss must be submitted to the insurer “in the shortest possible time”. Nevertheless, in the event of a property loss, the notification must be made within a maximum of three days and seven days in the case of personal insurance, unless the policy provides for a longer time limit.

    Non-compliance with these terms only allows the insurer to refuse coverage if said non-compliance is due to wilful default of the insured. In the event of gross negligence of the insured, the insurer may only reject the claim if the failure to comply with the term affects the assessment of the loss and the insurer was not otherwise aware of the circumstances of the loss.

    In the event of non-compliance with the terms, and if it is not due to wilful default or gross negligence of the insured, the insurer may reduce the indemnity, taking into account the damage caused to the insurer as a consequence of such failure. However, if the insured proves that failure to comply with the time limit is due to unforeseeable circumstances, force majeure or factual impossibility, the insurer may not reduce the amount of the indemnity.

  23. 12.

    Does the same time limit that applies to the insured apply to the intermediary (eg, the broker)?

  24. According to Peruvian law, the insurance broker is a representative of the insured. Therefore, he acts on behalf of the insured before the insurance company and the time limit applies also to them.

  25. 13.

    Is there a time limit within which the insurer must:

    • Confirm cover; or
    • Pay the claim or deny coverage?
  26. Article 74 of the Insurance Contract Act provides that a claim should be paid to the insured or its beneficiaries within 30 days following the acceptance of the claim by the insurer. The criteria that must be followed to accept a claim will depend on whether the claim is subject to a loss adjustment process or not.

    When the claim is subject to a loss adjustment process, the appointment of the adjuster must be made by the insured from a shortlist of three adjusters registered with the SBS, granted by the insurer. Once the adjuster receives the complete documentation required by the policy, he or she has 20 days to draft a report to recommend approval or rejecting coverage and to determine the amount to be paid for the loss. If the adjuster requires further and reasonable documentation, he or she must ask for it within this time frame. This action suspends the aforementioned time period, which will begin to run again once the required documentation is submitted.

    In the event that the adjuster needs more time to draft an adjustment report, he or she may request the SBS to grant him a longer time to complete the adjustment report.

    If the adjuster fails to determine whether or not the loss should be covered within the 20-day term, the loss will be considered covered if the insurer does not challenge or reject the claim within 30 days of the adjuster’s receipt of all information required from the insured. That is to say, with or without the adjustment report, the time limit to confirm or reject the claim for the insurer is 30 days once all the information required by the adjuster from the insured party has been completed.

    Once the adjuster drafts a final adjustment report and the insured agrees on the amount determined, both the adjuster and the inured can sign this adjustment, call by the law as “Adjustment Agreement”. Once the Adjustment Agreement is delivered to the insurer, the insurer has 10 days to approve or reject it. If the insurer fails to do so, the loss will be considered consented to and the insurer will have to pay the claim within the next 30 days.

    On the other hand, both parties, the insured and insurer, have the right to disagree with the final adjustment. In such a case, they must file an objection within 10 days from the day of receipt and may require a new adjustment to be completed within 30 days. Following this process, the insured or insurer may accept or reject the new adjustment, determine a new amount, or propose an arbitration or court proceeding to resolve differences between them.

    When the claim is not subject to a loss adjustment process, the insurer has 30 days from the date of delivery of the complete documentation required under the policy for the payment of the claim to accept or reject coverage for the loss. If the insurer requires any further documentation, he must request it within the first 20 days of the time frame. This action suspends the term, which will begin to run again once the required documentation is submitted.

    If the insurer needs more time to carry out further investigations or to obtain sufficient evidence of the origin of the claim or to determine its amount properly, the insurer has to request the SBS for such extension.

    In either scenario, therefore, it is important that an insurer deals with and responds promptly to a policy claim.

  27. 14.

    If so, what are the consequences of a breach of these time limits?

  28. If an insurer fails to meet the time limit for confirming or rejecting the coverage, the loss will be considered as consented. There is no definition in the Insurance Contract Act of what it means that a loss is considered consented. However, if we consider that a consented loss means that the insurer must pay the full amount claimed by the insured (even if such amount is not covered under the terms of the policy) there could be a potential violation of the prohibition contained in the Bank and Insurance General Act, which forbids insurance companies from paying indemnification in excess of the conditions of the policy.

    As we mentioned before, a claim should be paid within 30 days once the coverage has been confirmed or once the loss is considered consented.

    In the event of non-payment, the insurer must pay the insured an annual default interest of 1.5 times the average rate for loan operations in Peru for the currency expressed in the insurance contract. This interest shall be paid during the entire period of delay.

  29. 15.

    What are the answers to questions 11 to 14 in a reinsurance context?

  30. The terms set forth in questions 11 to 14 are not applicable to reinsurance contracts since the Insurance Contract Law does not apply to reinsurance contracts.

  31. 16.

    Do subrogation rights exist and when do they arise?

  32. As in most civil jurisdictions, subrogation rights are recognised in Peruvian law and insurers automatically have rights of subrogation against a third party once a claim has been paid. The rights are exercised on behalf of the insurer, not the insured, who must prove that the claim has been paid. Subrogation rights are mostly exercised by insurers; however, reinsurers also have the right to initiate proceedings on their own behalf once they have paid a claim.

    Any recovery by subrogation is shared proportionally between insurers and reinsurers on the basis of their share in the payment of the loss, unless otherwise agreed.

    Law and jurisdiction and dispute resolution

  33. 17.

    Do the parties have freedom of contract as to the choice of applicable law and jurisdiction in an insurance contact?

  34. The wording of the policies must contain details of the rights and obligations of the insured in the event of a dispute and it is mandatory that insurance policies be subject to Peruvian jurisdiction and law.

    Arbitration can only be agreed once the loss has occurred. However, the law allows the parties to agree the arbitration if the amount claimed in respect of said loss exceeds approximately £19,000 (20 UIT) approved by the SBS.    

    These rules have been interpreted in two ways; none of them is uniform. The first is that arbitration can only be agreed upon after the loss has occurred, provided that the amount claimed for that loss exceeds 20 UIT, and the second is that arbitration can be freely agreed upon by both parties, even before the loss occurs, if the amount (once loss has occurred) exceeds 20 UIT. We believe that the second interpretation is the correct one.

  35. 18.

    Are arbitration clauses enforceable in an insurance contract?

  36. No. As previously mentioned, arbitration clauses are not permitted in insurance policies. The parties can agree to solve any dispute through an arbitral procedure only once the loss has occurred and if the value of the claim exceeds £19,000 approximately. The Insurance Contract Law provides that any provision binding the policy to arbitration is void. The Arbitration Act of 2008 (Legislative Decree 1071) is based on the UNCITRAL Model Law of 2006 and reflects the changes introduced therein.

  37. 19.

    Do the parties have freedom of contract as to the choice of applicable law and jurisdiction in a reinsurance contact?

  38. Yes. In reinsurance contracts the parties have freedom of contract as to the choice of applicable law and jurisdiction.

  39. 20.

    Are arbitration clauses enforceable in a reinsurance contract?

  40. Yes.

  41. 21.

    Is mediation compulsory?

  42. Peruvian law recognises alternative dispute resolution methods, such as mediation and conciliation.

    Although the law regulates mediation, its use is uncommon in Peru: there are no qualified mediators or reliable mediation institutions. In lieu of mediation, disputing parties often try to settle their differences privately before entering into a legal proceeding. If the parties reach an agreement, they may execute an out-of-court settlement (transacción extrajudicial), which the law treats as if it was a final ruling from a judge or arbitration court (res judicata).

    Alternately, the parties may initiate a conciliation proceeding before a conciliator registered with the Ministry of Justice. The proceeding begins with the future claimant’s request for conciliation, in which the claim and the reasons for the dispute must be addressed. This request is notified to the future respondent with an invitation to both parties to attend the conciliation hearing and try to resolve their differences. The conciliator may not propose conciliatory schemes, so if the parties do not settle in the hearing, an attendance note is drafted stating that no settlement was reached and each party retains a copy of said note.

    The conciliation proceeding is a mandatory prerequisite before filing a claim with the judiciary (but not in arbitration). Therefore, it is common to enter into conciliation just to satisfy procedural requirements before initiating a court action. As such, conciliation has become a procedural technical matter and conciliators are not fully prepared to conduct a proper mediation process.

    However, the settlement which the parties may reach in a Conciliation Centre has the force of res judicata. Conciliation is therefore used – mostly – to grant an unchallengeable status to the agreement between the parties.

  43. 22.

    What is the court structure and what are the relevant time frames for a decision at first instance and each appeal level?

  44. The Commercial Courts of Lima are competent for insurance disputes, if the defendant’s domicile is in Lima. If the defendant’s domicile is not in Lima, then the claim may be filed with civil courts or small claim courts, depending on the amount of the claim.

    Under Peruvian law it is not possible to undergo a jury trial.

    The length of a commercial case depends on the undergoing proceeding. On a regular basis, a first instance commercial judge will issue a decision within 12 to 24 months.

    However, if either party decides to challenge the judge’s decision, it will take longer to reach a final decision. Appeal proceedings usually last from six to 12 months. Finally, if the case is taken to the Supreme Court, this may also take another six to 12 months.

  45. 23.

    Is the judiciary specialised in hearing insurance and reinsurance disputes?

  46. No. Unfortunately specialisation in insurance in the Peruvian courts is very limited and, therefore, the results of the proceeding are unpredictable.

  47. 24.

    How common is arbitration in insurance and reinsurance disputes in your jurisdiction?

  48. For complex and sophisticated claims, it is commonplace to settle large disputes via arbitration, as is very unlikely that this level of sophistication will be found in Peruvian courts.

    Reservation of rights / without prejudice rule

  49. 25.

    Is the concept of a ‘reservation of rights’ valid?

  50. Although not specifically regulated, it is common for an insurer or reinsurer to reserve its rights as soon as it becomes aware of any possible breach of the policy or breach of the duty of good faith on the part of the insured or reinsured, respectively. The purpose of the reservation of rights is to avoid any interpretation that might lead a court to consider that the insurer has waived a provision of the policy during the investigation of a claim and to avoid the application of estoppel.

  51. 26.

    Is the concept of ‘without prejudice’ communications recognised?

  52. ‘Without prejudice’ communications are not an expressly recognised concept in Peruvian law. However, it is not prohibited to expressly state in a communication that no rights of the party sending the communication shall be deemed to have been waived or lost.

    Cost, interest, monetary correction, moral and punitive damages

  53. 27.

    Does the loser of a legal action pay the costs of the successful party?

  54. The general rule is that the losing party will bear the costs of the dispute. However, the parties may agree to apportion the costs in an alternative manner and the court has the power to award costs at its discretion. In exercising their discretion, judges have to support their decision. Reimbursement of the costs and expenses of the process does not have to be required by either party and these are borne by the losing party. The parties must agree on the costs and expenses when the process concludes in conciliation.

    The same applies to the purposes of arbitration, but the parties may agree, prior to the commencement of the process, that the loser of the arbitration will pay all costs incurred in that process.

  55. 28.

    How is interest typically calculated on an insurance claim?

  56. Under Peruvian law, interest rates can be agreed upon by the parties as long as the agreed rate does not exceed the maximum interest rate fixed by the Central Reserve Bank. However, the Insurance Contract Law provides that if a claim is payable and the insurer does not pay within 30 days of consenting the claim, default interest will be due. In the case of a default in payment, the insurer must pay the insured an annual default interest of 1.5 times the average rate for lending operations in Peru for the currency expressed in the insurance contract.

  57. 29.

    Is monetary correction applied and, if so, how is it calculated?

  58. Monetary correction is not applicable in Peru.

  59. 30.

    Are punitive damages available?

  60. Punitive damages are not available and are, in fact, forbidden in Peru.

  61. 31.

    Are moral damages available?

  62. Moral damages (pain and suffering) are recognised under the Peruvian Civil Code and are very common in litigation or arbitration regarding liability or torts. Nevertheless, most liability policies exclude such damages from coverage.

    Intermediaries

  63. 32.

    What is the role and function of an intermediary in an insurance and reinsurance context?

  64. While brokers may act in the market indistinctly by producing or placing brokers, Peruvian law does not differentiate between them. Under Peruvian law, the duties of the reinsurance broker are to recommend to the reinsured the policy that he should contract and to act as an intermediary and assist and advise his clients. The broker’s fees and commission must be clearly established in the insurance policy.

    In the case of reinsurance brokers, for the issuance of the policy, the reinsured usually requests the full consent of the broker to the placement through a cover note. However, it is not mandatory to use a reinsurance broker to obtain a reinsurance policy.

    The role and functions of brokers are regulated in the General Act and its regulations, as well as in the provisions of the Insurance Contract Act.

  65. 33.

    On whose behalf do intermediaries act for the purpose of arranging insurance or collecting a claim?

  66. Once the policy is issued, the insurance or reinsurance broker owes its duties to its principal, the insured or reinsured. Among these duties, the broker must keep the insured or reinsured informed of relevant changes and tendencies in the (re)insurance market and guide them in filing claims. Thus, to guarantee the proper performance of its duties, the broker must have a professional liability policy of at least US$5 million.

    Therefore, the broker is the agent of the insured or reinsured and must act on his or her behalf.

  67. 34.

    Does the doctrine of ‘imputed knowledge’ exist? 

  68. Such a doctrine does not exist in Peru. However, the contract requires standard diligence for any party; therefore, it is possible to come to a conclusion similar to the doctrine of ‘imputed knowledge’ if we analyse a party’s diligence with respect to its control over related individuals (as an agent of the party).

    Limitation

  69. 35.

    When does a claim under an insurance contract become time-barred and from what point does time run for the purposes of calculating the time bar?

  70. Article 78 of the Insurance Contract Law establishes that the general time period for filing a claim under a policy is 10 years from the occurrence of a claim.

  71. 36.

    When does a claim under a reinsurance contract become time-barred and at what point does time run from for the purposes of calculating this time bar?

  72. There is no specific provision for a time bar regarding reinsurance claims. Therefore, the applicable time bar is also 10 years, as set forth in the Civil Code.

  73. 37.

    In an insurance and reinsurance context, can the limitation period be interrupted or suspended? If so, how?

  74. The limitation period can be interrupted by recognition of liability, when the insurer or reinsurer falls into arrears (ie, once the insurer has notified the reinsurer that it is in arrears, the limitation is interrupted) or notification of the claim.

    Other requirements

  75. 38.

    Is there a standard wording or are there mandatory clauses that must be included in insurance or reinsurance contracts?

  76. Yes, according to article 26 of the Insurance Contract Law, along with the general and special conditions, the following clauses are mandatory:

    • name, business name and domicile of the insurer and the co-insurers, if applicable;
    • name or business name and domicile of the insured and the beneficiaries, if applicable;
    • person, object or commitment insured;
    • covered risks and exclusions;
    • drafting date and period of validity;
    • prime amount, recharges and applicable taxes; along with its payment method, expiration dates and, when applicable, the criteria and procedures for the premium adjustment, along with an estimated price evolution;
    • declared value, insured amount or coverage provided and, when applicable, the criteria for the adjustment of the insured amount, along with an estimated evolution of it;
    • franchises and deductibles convened;
    • when applicable, official registration number of the broker and his commission; as well as the commission of the sale through insurance-banking, commerce or others;
    • if the premium is to be divided into instalments, a chronogram of the instalments including the applicable interest rate so it reflects the financial cost to the insured;
    • in life insurance and personal accidents insurance with decease or accidental death coverage, and statement that the policy is part of the National Information Registry of Life Insurance and Accident with Decease or Accidental Death Coverage Registry;
    • in momentary losses insurance, a statement that the existence of two or more policies covering the same risk implies the application of article 90 and thus the insured is obliged to act in said way;
    • any particular condition of the policy, including its annexes; and
    • any other determined by the SBS.
  77. 39.

    Are there any proposals for new insurance or reinsurance law and, if so, when is it anticipated that they will be enacted?

  78. Yes. The SBS is currently pre-publishing a possible new reinsurance regulation related to the accountability of insurance companies (harmonisation of NIIF principles) and to the disability and survival premiums.

Interested in contributing to Latin Lawyer Reference?


Questions

    Regulation

  1. 1.

    What are the sources of insurance and reinsurance law?


  2. 2.

    How and by whom is the insurance and reinsurance market regulated?


  3. 3.

    Is a fronting company required by a foreign insurer in order to write insurance?


  4. 4.

    Must reinsurance be written through a locally incorporated entity? Is it a requirement that reinsurance is written through a locally incorporated reinsurer?


  5. Classification of terms

  6. 5.

    Are conditions, conditions precedent or warranties in insurance and reinsurance contracts recognised and what are the remedies for their breach?


  7. Duty of good faith, non-disclosure and misrepresentation

  8. 6.

    Is the legal concept of the ‘duty of utmost good faith’ recognised and what obligations is an insurer under prior to placement of the insurance?


  9. 7.

    What are the remedies for breach of this duty by either party?


  10. 8.

    Does this duty continue to exist following the purchase of insurance (during the operation of the policy)?


  11. Reinsurance issues

  12. 9.

    Does local law recognise the following clauses in reinsurance contracts?

    • Follow-the-settlement and follow-the-fortunes clauses.
    • Claims control and claim cooperation clauses.
    • Aggregation clauses.

  13. Claim process

  14. 10.

    Who has the burden of proof when a claim is made and does the burden switch from one party to another?


  15. 11.

    What is the time limit for providing notice to the insurer of an insurance claim under a policy?


  16. 12.

    Does the same time limit that applies to the insured apply to the intermediary (eg, the broker)?


  17. 13.

    Is there a time limit within which the insurer must:

    • Confirm cover; or
    • Pay the claim or deny coverage?

  18. 14.

    If so, what are the consequences of a breach of these time limits?


  19. 15.

    What are the answers to questions 11 to 14 in a reinsurance context?


  20. 16.

    Do subrogation rights exist and when do they arise?


  21. Law and jurisdiction and dispute resolution

  22. 17.

    Do the parties have freedom of contract as to the choice of applicable law and jurisdiction in an insurance contact?


  23. 18.

    Are arbitration clauses enforceable in an insurance contract?


  24. 19.

    Do the parties have freedom of contract as to the choice of applicable law and jurisdiction in a reinsurance contact?


  25. 20.

    Are arbitration clauses enforceable in a reinsurance contract?


  26. 21.

    Is mediation compulsory?


  27. 22.

    What is the court structure and what are the relevant time frames for a decision at first instance and each appeal level?


  28. 23.

    Is the judiciary specialised in hearing insurance and reinsurance disputes?


  29. 24.

    How common is arbitration in insurance and reinsurance disputes in your jurisdiction?


  30. Reservation of rights / without prejudice rule

  31. 25.

    Is the concept of a ‘reservation of rights’ valid?


  32. 26.

    Is the concept of ‘without prejudice’ communications recognised?


  33. Cost, interest, monetary correction, moral and punitive damages

  34. 27.

    Does the loser of a legal action pay the costs of the successful party?


  35. 28.

    How is interest typically calculated on an insurance claim?


  36. 29.

    Is monetary correction applied and, if so, how is it calculated?


  37. 30.

    Are punitive damages available?


  38. 31.

    Are moral damages available?


  39. Intermediaries

  40. 32.

    What is the role and function of an intermediary in an insurance and reinsurance context?


  41. 33.

    On whose behalf do intermediaries act for the purpose of arranging insurance or collecting a claim?


  42. 34.

    Does the doctrine of ‘imputed knowledge’ exist? 


  43. Limitation

  44. 35.

    When does a claim under an insurance contract become time-barred and from what point does time run for the purposes of calculating the time bar?


  45. 36.

    When does a claim under a reinsurance contract become time-barred and at what point does time run from for the purposes of calculating this time bar?


  46. 37.

    In an insurance and reinsurance context, can the limitation period be interrupted or suspended? If so, how?


  47. Other requirements

  48. 38.

    Is there a standard wording or are there mandatory clauses that must be included in insurance or reinsurance contracts?


  49. 39.

    Are there any proposals for new insurance or reinsurance law and, if so, when is it anticipated that they will be enacted?


Other chapters in Insurance & Reinsurance