Resolution No. JB-2015-3364 of the Banking Board of Ecuador

Banking Board of Ecuador

RESOLUTION No. JB-2015-3364

THE BANKING BOARD

CONSIDERING:

THAT according to the last paragraph of the Third Transitory Provision of the Organic Monetary and Financial Code, published in the Official Register Second Supplement No. 332, of September 12, 2014, the Banking Board will continue to act until it resolves all appeals it was hearing on the date this Code took effect, for a period of one hundred and eighty days;

THAT the company Jaramilloil Transportation and Services S.A. contracted with Sweaden Compañía de Seguros y Reaseguros S.A. the Machinery and Equipment Policy No. 599, valid from February 18, 2013 to February 18, 2014, to insure the loader machine MOBILE CRANE, brand LINK – BELT, model RTC-8060, year 2004. The insured sum amounts to US $ 280,000.00;

THAT with communication entered into the insurer on September 16, 2013, Mr. Ángel Ramón Jaramillo, General Manager of Jaramilloil Transportation and Services S.A., notified the occurrence of the accident that took place on September 10, 2013, at the Shushufindi Aguarico field No. 09, in which the insured machinery was affected;

THAT the claim was formalized with the insurance company by sending documentation via email by the insured on October 15, 2013, in which the occurrence of the accident was detailed as follows:

"Once the Crane was squared, the truck driver Marco Moreno together with the Crane Rigger Iván Ganchozo proceed to open the fuel tank lid and make contact with the ground and an electric arc is produced with the high voltage cables, which caused the Crane tires to burn and the Saxon men approached the fire site with extinguishers to put out the flames of the crane wheels" (sic);

THAT through Office No. DTN/OF 508/UIO, of October 15, 2013, Engineer Adriana Almeida, National Technical Director of Sweaden Compañía de Seguros y Reaseguros S.A., denied the payment of the claimed indemnity, stating that the insured proceeded to repair the machinery without prior authorization from the insurance company, in virtue of which a cause for loss of the right to indemnification was configured;

THAT through communication entered into the Superintendency on March 11, 2014, Mr. Ángel Ramón Jaramillo, General Manager of Jaramilloil Transportation and Services S.A., filed an administrative complaint in which he requests that the control body order Sweaden Compañía de Seguros y Reaseguros S.A. to pay the corresponding amount for the accident that occurred to the machinery covered under the Equipment and Machinery Policy No. 599;

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THAT through Resolution No. SBS-DNAE-2014-646, of July 30, 2014, Engineer Carolina Pesántez Benítez, National Director of User Attention and Education, in resolving the administrative complaint mentioned in the preceding paragraph, refuted the arguments of the denial of payment and ordered that within a period of fifteen days Sweaden Compañía de Seguros y Reaseguros S.A. pay "in favor of JARAMILLOIL TRANSPORTATION AND SERVICES S.A. the sum of US$ 29,278.40..., less the deductions stipulated in the policy, without interest, in virtue of the fact that the objection of the insurance company was presented within the period of forty-five days provided for in article 42 of the General Insurance Law";

THAT through communication entered into the Superintendency on August 14, 2014, Economist Galo Mancheno Villacreces, Executive President of Sweaden Compañía de Seguros y Reaseguros S.A. with the professional sponsorship of lawyer Edwin Ortíz, filed an appeal against the administrative act contained in Resolution No. SBS-DNAE-2014-646, of July 30, 2014;

THAT the appellant based his appeal on the fact that the insured proceeded to repair the insured machinery without prior authorization from the insurance company, in virtue of which, according to the policy, a cause for loss of the right to indemnification was configured since there was an aggravation of the risk;

THAT said appeal was accepted for processing by the National Intendancy of the Private Insurance System through Resolution No. SBS-INSP-2014-205, of October 2, 2014;

THAT with Offices Nos. JB-2014-2721 and JB-2014-2722, both of October 8, 2014, the Secretary of the Banking Board sent to the parties certified copies of the aforementioned Resolution No. SBS-INSP-2014-205, of October 2 of the current year. Attached to Office No. JB-2014-2722, a photocopy of the filing of the appeal was additionally sent;

THAT the first five paragraphs of article 42 of the General Insurance Law provide:

"ARTICLE 42.- Every insurance company has the obligation to pay the contracted insurance or the corresponding part to the loss duly proven, as the case may be, within forty-five days following the day 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 justified objections to such claim, which must be immediately brought to the knowledge of the Superintendent of Banks.

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

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If in this case or in which the period of forty-five days 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 payment within a period not greater than fifteen days, together with interest calculated from the forty-five days previously indicated, at the maximum conventional rate fixed according to the law. If payment is not made within the 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 Superintendency of Banks will verify the existence of the grounds for such objections and, if there are none, will order payment, otherwise it will reject it.

The insured or beneficiary may resort to summary verbal trial before competent judges or submit to commercial arbitration or mediation, as the case may be.";

THAT the Legislation on the Insurance Contract, issued through Supreme Decree No. 1147, published in Official Register No. 123 of December 7, 1963, which forms part of the Commercial Code, in its article 22, provides:

"Art. 22.- It is incumbent upon the insured to prove the occurrence of the accident, which is presumed to have been produced by fortuitous event, unless proof to the contrary is provided. Likewise, it is incumbent upon the insured to prove the amount of the indemnity owed by the insurer. It is incumbent upon the latter, in both cases, to demonstrate the facts or circumstances excluding its liability";

THAT according to the cited norms, once the forty-five days following the day on which the insured or beneficiary presents in writing the corresponding claim accompanied by the documents that, according to the policy, are necessary to formalize the claim, that is, to demonstrate the occurrence of the accident and quantify it, have passed, without the insurance company having made the payment of the claimed insurance, or in its defect, having formulated justified objections to such claim, the insured may go to the Superintendency of Banks and Insurance to ask it to order the insurance company to pay for the accident, and if there are grounds for the denial of said payment, it will analyze them to determine their pertinence or lack of legal pertinence;

THAT in the present case, the claim was formalized with the insurance company on October 15, 2013 and the objection by the insurer was on the same date; that is, within the period provided for in article 42 of the General Insurance Law;

THAT article 20 "REPAIRS" of the General Conditions of Machinery and Equipment Policy No. 599 stipulates the following:

"If the insured equipment or machinery, after suffering damage, is repaired by the Insured in a provisional manner and continues to function, the

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Company will not be responsible for any damage that it subsequently suffers until the repair is made definitively.

The Company's responsibility will cease, if any definitive repair of an asset, made by the Insured, is not done to the satisfaction of the Company.

If according to the Company, the provisional repair represents an essential aggravation of the risk, it will be empowered to suspend entirely the insurance of the unit effected";

THAT the contractual norm transcribed in the preceding paragraph authorizes Jaramilloil Transportation and Services S.A. to make provisional repairs of the insured machinery upon the occurrence of an accident without prior authorization from Sweaden Compañía de Seguros y Reaseguros S.A., with the purpose of avoiding the spread of the accident;

THAT in the present case, Mr. Ángel Ramón Jaramillo, General Manager of Jaramilloil Transportation and Services S.A., proceeded to request from the company SACHABRATS a tire to level the crane. This is derived both from the certification issued by Mr. Francisco Abad, General Manager of said company, in which he certifies that on September 10, 2013 he provided tires to the insured company in order to stabilize the crane and lift it onto the lowbed to mobilize it to the city of Coca; as well as by Invoice No. 3052 of September 16, 2013 from Vulcanizadora Santo Domingo, for the value of US $ 716.80, in which it details:

"4 Tire Changes 2 ORIN Exit of tire changer";

THAT on this subject, this collegiate body agrees with the eighteenth consideration of Resolution No. SBS-DNAE-2014-646, of July 30, 2014, whose text says:

"THAT..., it corresponds to the insurer to demonstrate the facts or circumstances excluding its liability, which are not limited to declaring the existence of a breach by the insured of the conditions established in the insurance contract but must jointly demonstrate that this obeys to its malice (bad faith) or to its gross negligence, in application of the general rule of Art. 1502 of the Civil Code, which says: "Dolus is not presumed except in the special cases provided for in the Law. In others it must be proven". Therefore, following this principle, since it is presumed that the accident occurred by fortuitous event, it corresponds to the insurer to prove, "the facts or circumstances excluding its liability"...";

THAT in compliance with the aforementioned article 22 of Supreme Decree No. 1147, the insured has proven the occurrence of the accident with the presentation to the insurance company of the following documents:

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1. Copy of the driver's license.
2. Copy of the crane registration.
3. Photographs of the damages.
4. Inspection of the damages.
5. Report from the electric company on the incidents caused on the day of the accident.
6. Legible copy of the appointment of the legal representative of the electric company.
7. Report from the operator who was driving the affected machine.
8. Legible copy of the operator's ID card.
9. Work order of the machinery to operate on the day of the accident;

THAT likewise, the insured company has quantified the accident at US $ 29,278.40, with the presentation of the "QUOTATION OF SERVICES" No. 4040E of LOAD SYSTEM CRANE;

THAT on its side, within the payment objection that the insurer presented in Office No. DTN/OF 508/UIO, of October 15, 2013, it stated the following:

"In the visit of our inspector confirms that the tires have already been changed and that in addition the mechanic had already performed the tests and mechanical checks of operation, leaving pending for the next day a check of the electronic part";

THAT regarding this, within the file formed around the present appeal, the referred "Inspector's Report" of the insurance company is not on record, nor any other document that evidences that the insured company proceeded to make "definitive repairs" subsequent to the occurrence of the accident without the authorization of Sweaden Compañía de Seguros y Reaseguros S.A.;

THAT from the aforementioned documentation only Invoice No. 3052 is derived, which details a tire change, that is, a provisional repair, in order to stabilize the crane and lift it onto the lowbed to mobilize it from the accident site, according to the certification of Mr. Francisco Abad, General Manager of the company SACHABRATS. This value of the tire change is an additional forced expense in which the insured had to incur and which he has not claimed from the insurer, since the value in dispute is the one constant in the proforma presented which amounts to US $ 29,278.40, proforma that quantifies the definitive repair of the insured asset;

THAT therefore, Sweaden Compañía de Seguros y Reaseguros S.A. has not demonstrated the circumstances excluding its liability;

THAT the National Legal Intendancy, through memorandum INJ-DNJ-SAL-2015-0048 of January 22, 2015, recommended to the Banking Board to reject the claim contained in the appeal filed;

IN exercise of its legal powers,

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RESOLVES:

ARTICLE 1.- REJECT the claim contained in the appeal presented by the Executive President of Sweaden Compañía de Seguros y Reaseguros S.A.; and, consequently CONFIRM the administrative act contained in Resolution No. SBS-DNAE-2014-646, of July 30, 2014, through which Engineer Carolina Pesántez Benítez, National Director of User Attention and Education, ordered that within a period of fifteen days Sweaden Compañía de Seguros y Reaseguros S.A. pay "in favor of JARAMILLOIL TRANSPORTATION AND SERVICES S.A. the sum of US$ 29,278.40..., less the deductions stipulated in the policy, without interest, in virtue of the fact that the objection of the insurance company was presented within the period of forty-five days provided for 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, under legal warning. If it does not do so, it will be subject to what is provided for in letter a) of article 55 of the General Insurance Law.

NOTIFY.- Given at the Superintendency of Banks, in Quito, Metropolitan District, on April 15, two thousand fifteen.

(Signature) Econ. Rodrigo Landeta Parra GENERAL INTENDANT, S PRESIDENT OF THE BANKING BOARD, E

I CERTIFY.- Quito, Metropolitan District, on April 15, two thousand fifteen.

(Signature) Lcdo. Pablo Cobo Luna SECRETARY OF THE BANKING BOARD