Banking Junta of Ecuador

RESOLUTION No. JB-2015-3334

THE BANKING JUNTA

CONSIDERING:

THAT this appeal is resolved in accordance with the First Transitional Provision of the Organic Code of Monetary and Financial Affairs, published in the Official Registry Second Supplement No. 332, of September 12, 2014, whose text states that resolutions contained in the Codification of Resolutions of the Superintendence of Banks and Insurance and the Banking Junta, and the norms issued by the control bodies, will maintain their validity in all that does not oppose what is established in the Organic Code of Monetary and Financial Affairs, until the Monetary and Financial Policy and Regulation Board resolves what corresponds, according to the case; and, with the second paragraph of the Third Transitional Provision, which states that the Banking Junta will continue to act until it resolves all complaints, appeals, and other administrative procedures that it was hearing on the date of validity of the same, within a period of one hundred and eighty days, extendable at the discretion of the Monetary and Financial Policy and Regulation Board;

THAT on September 12, 2013, Mr. Hugo Gerardo Murillo Alcívar contracted with Seguros del Pichincha S.A. Compañía de Seguros y Reaseguros, the group life insurance policy Multiriesgo Personal PRONTOMED signed with No. 0000002465, valid from September 12, 2013, until the last day of the paid period, which was contracted to insure coverage for serious illnesses, medical expenses due to illness or accident, including maternity, for the insured, his wife, and children,

THAT on November 15, 2013, Mr. Hugo Gerardo Murillo Alcívar, through a "Reimbursement Request" issued by CONFIAMED, presented to the insurance company on the same day, month, and year, requested a reimbursement of USD $430.00, for the care of his son Jeremy Murillo Velásquez, who suffered from "Pediatric Seizure Crisis," according to the reason for the consultation, specified in the request presented, attaching the respective documentation to formalize the claim;

THAT through a letter sent to the insured on November 22, 2013, Seguros del Pichincha S.A. Compañía de Seguros y Reaseguros, through the company Medicina del Futuro Ecuador Medicalfe S.A., trade name CONFIAMED, notified the insured of the denial of the reimbursement request, based on the eleventh clause of the group life insurance policy Multiriesgo Personal PRONTOMED No. 0000002465, and on the fact that the affiliate has not exceeded the waiting period established in the insurance contract;

THAT through communication received on December 10, 2013, at the Regional Intendancy of Guayaquil, Mr. Hugo Gerardo Murillo Alcívar, with the professional sponsorship of lawyer José Miguel Medina Alvarado, filed an administrative complaint against Seguros del Pichincha S.A. Compañía de Seguros y Reaseguros, for the non-payment of the reimbursement requested from the insurance company. The User Attention Subdirectorate of the Regional Intendancy

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of Guayaquil, through office No. IRG-DAYEU-SSP-REQ-2013-512, of December 24, 2013, requested the insurance company for explanations and supporting documents for the claim presented;

THAT through office No. SDP-2014-123, of January 17, 2014, entered in the Superintendence of Banks and Insurance on the 24th of the same month and year, the economist Diego Jorge Mendizábal, Executive President of Seguros del Pichincha S.A., delivered the justifications for which the company denied the reimbursement request;

THAT through resolution No. SBS-IRG-DAYEU-SSP-2014-068, of April 7, 2013, the Regional Intendancy of Guayaquil, accepted the claim presented by Mr. Hugo Gerardo Murillo Alcívar, and resolved:

"(...) ARTICLE FIRST.- ORDER, in accordance with what is provided in the fourth paragraph of article 42 of the Codification of the General Insurance Law, that SEGUROS DEL PICHINCHA S.A. COMPAÑÍA DE SEGUROS Y REASEGUROS pay in favor of Mr. Hugo Gerardo Murillo Alcívar, the sum of USD 430.00 (FOUR HUNDRED THIRTY 00/100 DOLLARS OF THE UNITED STATES OF AMERICA), as compensation for the medical expenses of the minor Jeremy Jeral Murillo Velásquez, together with the interests calculated at the maximum conventional rate fixed according to the Law, from January 2, 2014, the date on which the 45-day period fixed in article 42 of the aforementioned law expired, for the insurer to pay the compensation or formulate duly founded objections.

ARTICLE SECOND.- ORDER that SEGUROS DEL PICHINCHA S.A. COMPAÑÍA DE SEGUROS Y REASEGUROS, comply with what is established in the previous article within a period of 15 days, counted from the date it is notified with this Resolution.

(...)." (sic);

THAT through office No. SIN-2014-564, of April 21, 2014, entered in the Superintendence of Banks and Insurance on the 28th of the same month and year, the economist Diego Jorge Mendizábal, Executive President of Seguros del Pichincha S.A. Compañía de Seguros y Reaseguros, with the sponsorship of doctor Alex Paz y Miño, filed an appeal against resolution No. SBS-IRG-DAYEU-SSP-2014-068, of April 7, 2013, under the provisions of article 70 of the General Insurance Law;

THAT the appellant based his appeal on the following arguments:

• That the request for reimbursement of medical expenses is made directly to the company Medicina del Futuro Ecuador Medicalfe S.A. CONFIAMED, since this is in charge of the management and coverage corresponding to health services and prepaid medicine, so that CONFIAMED is the one within the 45 days, issues the denial of coverage, based on the fact that the medical care given to the insured's son does not exceed the waiting period for diseases

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considered as preexisting, according to the terms of the contract signed by the parties;

• That according to what is stipulated in article 42 of the General Insurance Law, an administrative complaint can be filed against the insurer when he has formulated objections, in this case, neither the coverage claim was presented to the insurer, nor the letter of denial was issued by the insurance company, therefore, there is an evident error of law on the part of the Regional Intendancy of Guayaquil, since it cannot order the payment of a coverage that does not correspond to the insurer, even worse based on a non-existent denial on the part of the insurer; and,

• That the claim for coverage of health services, presented by the insured, was made directly to the company Medicina del Futuro Ecuador Medicalfe S.A. CONFIAMED, which is the entity that provides that service, as a complement to the life insurance policy issued by the insurance company, and that CONFIAMED informed Mr. Hugo Gerardo Murillo Alcívar of the denial in a timely manner, so the administrative complaint against Seguros del Pichincha S.A. Compañía de Seguros y Reaseguros is inappropriate, as well as the impropriety of the appealed resolution.

THAT through resolution No. SBS-IRG-DASSP5-2014-016, of May 16, 2014, the Regional Intendancy of Guayaquil, granted the appeal filed by the economist Diego Jorge Mendizábal, Executive President of Seguros del Pichincha S.A. Compañía de Seguros y Reaseguros; and, ordered the sending of the respective file;

THAT the first four paragraphs of article 42 of the General Insurance Law provide as follows:

"Every insurance company is obligated to pay the contracted insurance or the corresponding part of the loss duly proven, as the case may be, within forty-five days following that on which the insured or beneficiary presents in writing the corresponding claim accompanied by the documents that, according to the policy, are necessary, unless the insurance company formulates founded objections to such claim, which must be immediately brought to the knowledge of the Superintendent of Banks and Insurance.

If the insured or beneficiary agrees to the objections, the insurance entity will immediately pay the agreed compensation.

If in this case or in which the forty-five day period fixed in the first paragraph expires, the insurance company does not make the payment, the insured or beneficiary will bring this fact to the knowledge of the Superintendent of Banks, who, upon verifying this situation, will order the payment within a period not greater than fifteen days, together with the interests calculated from the forty-five days indicated above, at the maximum conventional rate fixed according to the law. If payment is not made within the

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granted period, it will order the forced liquidation of the insurance company.

If the insurance company formulates objections to the claim and no agreement is reached with the insured or beneficiary, the Superintendence of Banks and Insurance will verify the existence of the foundations of said objections and, if there are none, will order the payment, otherwise it will reject it.

(...).";

THAT the legal provision cited in the previous consideration provides that once the forty-five days following that on which the insured or beneficiary presents in writing the corresponding claim accompanied by the documents that according to the policy are necessary have passed, without the insurance company having made the payment of the claimed insurance, or in its defect, formulated objections to such claim, the insured can go to the Superintendence of Banks and Insurance to ask it to order the insurance company to pay the claim, and if there are grounds for the denial of said payment, it will analyze them to determine their foundation;

THAT in concordance with the above, article 22 of Supreme Decree No. 1147, published in the Official Registry No. 123, of December 7, 1963 says the following:

"Art. 22.- It is incumbent on the insured to prove the occurrence of the accident, which is presumed to have been produced by fortuitous case, unless proof to the contrary. Likewise, it is incumbent on the insured to prove the amount of the indemnity due to the insurer. In both cases, it is incumbent on him to demonstrate the facts or circumstances excluding his responsibility";

THAT under the provisions of article 22 transcribed, Mr. Hugo Gerardo Murillo Alcívar, proved the occurrence of the accident by presenting to the company Medicina del Futuro Ecuador Medicalfe S.A. CONFIAMED, the request for reimbursement of medical expenses, accompanied by the bills of expenses incurred in the care of his son Jeremy Jeral Murillo Velásquez, on November 18, 2013;

THAT the company Medicina del Futuro Ecuador Medicalfe S.A. CONFIAMED, through a letter of November 22, 2013, denied the payment of the requested reimbursement of expenses by Mr. Hugo Gerardo Murillo Alcívar, based on clause eleventh, definitions 11.16 of the health declaration, and of the unexceeded waiting period, stating: "(...) that after analysis performed of the documentation presented by the beneficiary(ies) MURILLO VELÁSQUEZ JEREMY JERAL for the diagnosis OTHER CONVULSIONS AND THOSE NOT SPECIFIED, we proceed with THE DENIAL OF YOUR CLAIM.(...)";

THAT within the particular and general conditions, of the group life insurance policy multiriesgo personal PRONTOMED No. 0000002465, the following is determined:

PARTICULAR CONDITIONS:

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"(...) H. Medical attention for medical expenses due to illness or accident may be carried out after the following waiting periods have been exceeded:

Service	Waiting Period
Outpatient	thirty (30) days
Insurance Emergency	twenty-four (24) hours from signing the contract
Hospitalization	six (6) months
Maternity	six (6) months
Serious Illnesses	three (3) months
(*) Preexisting Conditions	six (6) months

(*) Declared preexisting conditions have coverage after the waiting period has been exceeded, provided they are not excluded in article two of the general conditions of this policy".

GENERAL CONDITIONS:

"(...) MEDICAL EXPENSES DUE TO ILLNESS OR ACCIDENT

The Company guarantees the Insured the reimbursement of expenses incurred due to medical procedures, due to illness or accident, within the limits provided in the particular conditions of this Policy. This guarantee may extend to the holder and his family. Such expenses may arise from:

• OUTPATIENT CARE: any health service that according to common medical practice, do not require hospitalization to be attended, considering the conditions stipulated according to the plan chosen by the Policyholder.
• MEDICAL CONSULTATION AND PROFESSIONAL FEES: performed by medical professionals, categorized as doctors legally authorized by the national health authority to practice.
• DIAGNOSTIC EXAMINATIONS: laboratory, imaging, and histopathological studies, as long as they are related to a diagnosis and with the respective doctor's request.

(...).";

THAT from what is exposed, it is determined that known and accepted the stipulations contained in the insurance policy, the parties are obligated to comply with it, unless there are causes that invalidate its content, from which it is inferred from the documentation mentioned in preceding lines, that the insured

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through "REIMBURSEMENT REQUEST", delivered to the insurance company on November 15, 2013, stated that his son Jeremy Jeral Murillo Vásquez, suffered from a "Pediatric Seizure Crisis" (sic), so Mr. Hugo Gerardo Murillo Alcívar, when requesting the reimbursement of the expenses incurred in the treatment of his son, attached the bills of the consumptions made, giving a quantity of USD $430.00. Regarding this, the particular conditions of the group life insurance policy multiriesgo personal PRONTOMED No. 0000002465, granted him a waiting period fixed for emergency medical cases, which is applicable to the claimed accident, after 24 hours of the policy being signed, that is, from September 13, 2013, therefore, the assistance of the medical emergency of the minor Jeremy Murillo Vásquez, dependent of the insured, occurred on November 15, 2013, 63 days after the insurance was contracted, in which case it has coverage;

THAT articles 1561 and 1562 of the Civil Code provide as follows:

"Art. 1561.- Every contract legally celebrated is a law for the contractors, and cannot be invalidated except by their mutual consent or by legal causes."

"Art. 1562.- Contracts must be executed in good faith, and consequently bind, not only to what is expressed in them, but to all things that emanate precisely from the nature of the obligation, or that, by law or custom, belong to it.";

THAT articles 1 and 78, of Supreme Decree No. 1147, published in the Official Registry No. 123, of December 7, 1963, which contains the legislation of the insurance contract, provide as follows:

"Art. 1.- Insurance is a contract by which one of the parties, the insurer, obligates itself, in exchange for the payment of a premium, to indemnify the other party, within the agreed limits, of a loss or damage produced by an uncertain event; or to pay a capital or an annuity, if the eventuality provided for in the contract occurs."

"Art. 78.- In life insurance against the risk of death, only the voluntary or involuntary suicide of the insured occurring during the first two years of the contract's validity may be excluded.";

THAT within the file under study, there is the "CONVENTION FOR THE ADMINISTRATION OF HEALTH INSURANCE POLICY AND MEDICAL ASSISTANCE", celebrated between Medicina del Futuro Ecuador Medicalfe S.A. CONFIAMED, and Seguros del Pichincha S.A. Compañía de Seguros y Reaseguros, in which it is exposed as follows:

"(...) CLAUSE THIRD.- OBLIGATIONS OF THE PARTIES

In order to administer the COVERAGE OF MEDICAL ASSISTANCE that the insurance SU SALUD offers, the parties submit to the following obligations:

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3.2 Are obligations of CONFIAMED

3.2.1 To be in charge of the administration, management, coordination, and operation of the Medical Assistance coverage, in all its aspects, within the parameters established in this convention and the terms provided in the SU SALUD insurance policy. This obligation includes the coordination of benefits and benefits, the settlement and review of claims, approvals, hospital credits, management of agreements with medical providers own to its management or those requested by SEGUROS DEL PICHINCHA, payments to medical providers, renewals, etc.

(...)

3.2.3 To pay the values of the settlements of the claims or medical assistance accidents through credit to the account registered by the affiliate and to pay the providers (clinics, hospitals, doctors, medical centers, etc.) the bills presented for the attention of the insured of SEGUROS DEL PICHINCHA.

(...).";

THAT according to the convention signed between the insurance company and CONFIAMED, it is determined that the parties agreed on the rules for the provision of medical services for the insured of the collective policy, issued by the insurance company, in the health branch, in relation to the administration, management, and handling of medical assistance benefits, so the argument of the insurance company, in which it mentions that the complaint against Seguros del Pichincha C.A. Compañía de Seguros y Reaseguros S.A. is inappropriate, has no legal basis, since the insurer gave CONFIAMED attributions for the administration of the policies subscribed between the insured and the insurance company, in what has to do with the settlement and review of the claims presented for medical assistance;

THAT regarding the payment of interests ordered by the Regional Intendancy of Guayaquil, Mr. Hugo Gerardo Murillo Alcívar, formalized the request for reimbursement of medical expenses, before the insurer on November 15, 2013, and on November 22 of the same year, the company Medicina del Futuro Ecuador Medicalfe S.A. CONFIAMED, issued the denial of payment to the request presented by the insured, in which, under the provisions of article 42 of the General Insurance Law, the denial was given within the forty-five (45) days, provided in the aforementioned article, so the payment of interests ordered by the Intendancy Regional is not applicable; and,

THAT number eight of article eleven of the Constitution of the Republic provides:

"The content of rights will be developed progressively through norms, jurisprudence, and public policies. The State will generate and guarantee the necessary conditions for their full recognition and exercise.

Any action or omission of a regressive nature that unjustifiably diminishes, undermines, or annuls the exercise of rights will be unconstitutional.";

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THAT the National Legal Intendancy, through memorandum INJ-DNJ-SAL-2015-0069 of January 28, 2015, recommended to the Banking Junta to reject the claim contained in the appeal filed;

IN exercise of its legal attributions,

RESOLVES:

ARTICLE 1.- REJECT the claim contained in the appeal filed by the economist Diego Jorge Mendizábal, Executive President and Legal Representative of Seguros del Pichincha S.A. Compañía de Seguros y Reaseguros; and, consequently PARTIALLY CONFIRM resolution No. SBS-IRG-DAYEU-SSP-2014-068, of April 7, 2014, through which the Regional Intendancy of Guayaquil, accepted the administrative complaint filed by Mr. Hugo Gerardo Murillo Alcívar, ordering Seguros del Pichincha C.A. Compañía de Seguros y Reaseguros, the payment of USD $430.00, but with the clarification that it is to be paid without interest, since the denial of payment was issued within the forty-five (45) days provided in article 42 of the General Insurance Law.

ARTICLE 2.- ORDER that the insurance company comply with what is established in the previous article within a period of fifteen days, counted from the date it is notified with this resolution, under legal warnings. If it does not do so, it will incur in what is provided in letter a) of article 55 of the General Insurance Law.

NOTIFY.- Given in the Superintendence of Banks, in Quito, Metropolitan District, on April 1, two thousand fifteen.

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Econ. Rodrigo Landeta Parra GENERAL INTENDANT, S PRESIDENT OF THE BANKING JUNTA, E

I CERTIFY.- Quito, Metropolitan District, on April 1, two thousand fifteen.

Lcdo. Pablo Cobo Luna SECRETARY OF THE BANKING JUNTA