Banking Board of Ecuador

RESOLUTION No. JB-2015-3319

THE BANKING BOARD

CONSIDERING:

THAT this appeal is resolved in accordance with the First Transitional Provision of the Organic Monetary and Financial Code, published in the Official Register 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 Board, and the norms issued by the control bodies, will remain in effect insofar as they do not oppose what is provided in the Organic Monetary and Financial Code, 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 Board will continue to act until it resolves all claims, appeals, and other administrative procedures that were known as of the date of entry into force 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, which grants this control body competence to hear and resolve the present review appeal;

THAT by means of aircraft hull policy No. 0000161, issued on October 18, 2012, by Latina de Seguros y Reaseguros C.A., valid from October 15, 2012, to October 15, 2013, the Piper PA-22-135 aircraft, year 1958, with registration No. HC-CMX, was insured for an insured value of USD $305,000.00, which includes coverage for personal accidents, crew personal accidents, hull, medical expenses, and crew medical expenses. From the referenced policy, the insured company is Aeroliderman Cía. Ltda.;

THAT on June 13, 2013, at approximately 15:20, the insured aircraft suffered an air accident at the San Marcos airstrip, of the Taisha canton hospital, in the province of Morona Santiago, resulting in the death of the occupants of the aircraft and its destruction. Aeroliderman Cía. Ltda., through letter No. AEROLID-030-2013 of July 11, 2013, proceeded to present before the insurer the claim for the accident that occurred in the Piper PA-22-135 aircraft, and presented the documentation required by the insurance company. Latina de Seguros y Reaseguros S.A., on August 14, 2013, proceeded to deny the claim filed by the insured based on the particular conditions of the contracted policy;

THAT by means of a document entered in the Superintendence of Banks on October 16, 2013, the doctors Antonio López Cobeña and Susana Hernández Clavijo, Legal Attorneys for the gentlemen Tobias Almeida Medina, General Manager of Aeroliderman Cía. Ltda., and the lady Marcia Lorena Bosmediano Navas, filed an administrative complaint against Latina de Seguros y Reaseguros C.A. for the refusal to pay the indemnity under the aircraft hull policy No. 0000161; and requested that the insurance company be ordered to make the payment of the contracted policy insurance effective. The aforementioned request was accepted for processing by the National Directorate of Attention and User Education through letter No. DNAE-SAU-2013-06288 of October 30, 2013;

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THAT by means of letter No. DNAE-SAU-2013-06290 of October 30, 2013, the Subdirector of User Attention, at that time, requested from the insurer the explanations regarding the claim presented by the Judicial Attorneys of the gentlemen Tobias Almeida Medina, General Manager of Aeroliderman Cía. Ltda., and the lady Marcia Lorena Bosmediano Navas, as well as the supporting documentation regarding the claimed accident. In response, through a document dated November 19, 2012, entered in the Superintendence of Banks and Insurance on the 20th of the same month and year, the engineer Susana Margoth Velásquez Galarraga and the lawyer Ana Elena Rueda Guerrero, provided attention to the request of the control body;

THAT by means of resolution No. SBS-DNAE-2013-0041 of January 16, 2014, the National Directorate of Attention and User Education, of this control body, rejected the claim presented by the doctors Antonio López Cobeña and Susana Hernández Clavijo, Legal Attorneys of the gentlemen Tobias Almeida Medina, General Manager of Aeroliderman Cía. Ltda., and the lady Marcia Lorena Bosmediano Navas; and resolved:

"(...)

RESOLVES:

ARTICLE FIRST.- REJECT the claim presented by the doctors Antonio López Cobeña and Susana Hernández Clavijo, Judicial Attorneys of the gentlemen Tobias Almeida Medina, Legal Representative and General Manager of AEROLIDERMAN CÍA. LTDA., as well as judicial attorneys of the lady Marcia Lorena Bosmediano Navas, heir of the gentleman Roberto Andrés Puga Bosmediano.

ARTICLE TWO: ORDER the filing of the administrative claim that motivated this resolution

(...)." (sic);

THAT by means of a document entered in the Superintendence of Banks and Insurance on January 29, 2014, the doctors Antonio López Cobeña and Susana Hernández Clavijo, Judicial Attorneys of the gentlemen Tobias Almeida Medina, General Manager of Aeroliderman Cía. Ltda., and the lady Marcia Lorena Bosmediano Navas, filed before the Banking Board an appeal against resolution No. SBS-DNAE-2014-0041 of January 16, 2014, under the provisions of article 70 of the General Insurance Law;

THAT by means of letter No. INSP-DA1-2014-457 of February 12, 2014, the National Intendant of the Private Insurance System, at that time, requested from the doctors Antonio López Cobeña and Susana Hernández Clavijo, to documentarily justify the judicial representation referred to in the appeal document presented. In response, the doctors Antonio López Cobeña and Susana Hernández Clavijo, attended to the request made by the National Intendancy of the Private Insurance System;

THAT the arguments of the appellant go back to the following:

• That the pilot of Aeroliderman Cía. Ltda. Roberto Puga Bosmediano received approximately 18 hours of instruction prior to his qualification in the aircraft,

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routes and runways to be used within the company's operation, for which the flight instructor captain, Mr. Javier Jaramillo Revelo, certified the aforementioned in the flight logbook of captain Roberto Puga Bosmediano; consequently, Captain Bosmediano possessed vast experience that exceeded triple and almost double the flight hours of the insured pilots respectively in the policy contracted by the aforementioned company;

• That Aeroliderman Cía. Ltda., paid the full premium of the insurance and requested the insurer to issue the aircraft hull policy, to which the insurer attempted to place in the particular conditions of the contracted policy, in the pilots clause, the requirement of 100 flight hours in make and model for each of the insured pilots, including in the OPEN PILOT GUARANTEE, a condition that Aeroliderman Cía. Ltda., did not accept by virtue of the fact that the aircraft object of the policy was the only one in the country, and that no Ecuadorian pilot could credibly state that amount of flight hours, to which Latina de Seguros y Reaseguros S.A., accepted that the insured pilots and those of the open pilot guarantee credibly state the previously required experience in an aircraft of similar characteristics, so a comparative study was carried out between the PIPER PA 22-135 and the CESSNA 172, demonstrating in this way the similar characteristics both in performance, seat capacity, wing type, landing gear type, engine capacity and total weight of the aircraft.

• That the acceptance of this validation in the CESSNA 172, served for the insurer to proceed to issue the policy, otherwise it would not have issued it, because no Ecuadorian pilot currently credibly states the experience in the make and model of the insured aircraft, it is sufficient to review the flight logs of the pilots insured in the contracted policy, which proves the assertion made;

• That the referenced policy, in accordance with what was related, maintains serious inconsistencies that not only violate the General Insurance Law, but also the General Norms for the Application of the General Insurance Law, there is even something more serious, as constitutional rights have been violated, since the particular conditions previously singled out modify coverages, so these have become special conditions of the policy;

• That it is necessary to mention that the control body must ratify that the legal representative of Aeroliderman Cía. Ltda., signed the particular conditions of the contracted policy, since in the absence of the signature of the same by the insured, they are refuted as unwritten, according to what is provided in the General Norms for the application of the General Insurance Law.

THAT by means of resolution No. SBS-INSP-2014-040 of February 17, 2014, the National Intendant of the Private Insurance System, at that time, granted the appeal filed by the doctors Antonio López Cobeña and Susana Hernández Clavijo, Legal Attorneys of the gentlemen Tobias Almeida Medina, General Manager of

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Aeroliderman Cía. Ltda., and the lady Marcia Lorena Bosmediano Navas, and ordered the sending of the respective file;

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

"Any insurance company has the obligation to pay the contracted insurance or the corresponding part to the duly proven loss, as the case may be, within forty-five days following that in which the insured or beneficiary presents in writing the corresponding claim attached with 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 and Insurance.

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

If in this case or in the case where the forty-five day period established in the first paragraph expires, the insurance company does not make the payment, the insured or beneficiary will bring the fact to the knowledge of the Superintendent of Banks and Insurance, who, upon verifying this situation, will order the payment within a period not greater than fifteen days, along 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 Superintendence of Banks and Insurance will verify the existence of the grounds for said objections and, if there are none, will order the 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 once the forty-five days following that in which the insured or beneficiary presents in writing the corresponding claim attached with 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 accident, and if there are grounds for the refusal of said payment, it will analyze them to determine their foundation;

THAT the accident that occurred on June 13, 2013, consisting of the air accident, in which the four occupants of the Piper PA-22-135 aircraft died, was

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formalized on July 12, 2013, through letter No. AEROLID-030-2013; and, on August 14, 2013, Latina de Seguros y Reaseguros C.A., denied the payment of the claim, consequently the refusal issued by the insurer, was made within the forty-five days provided for in article 42 of the General Insurance Law;

THAT Latina de Seguros y Reaseguros C.A., issued the refusal to pay, based on what is stated in the Particular Conditions of the contracted policy which say:

"(...)

USES:
Private and Community Services

PILOTS:
Almeida Medina Liderman Tobias, pilot with a declared experience of 300 total flight hours including 200 hours in make and model.
Orozco Molina Marco Antonio, pilot with a declared experience of 1,900 total flight hours including 1,010 hours in make and model Andrade Valdivieso Miguel Mauricio, pilot with a declared experience of 150 total flight hours including 150 hours in make and model Andrade Mestanza Deibth Geovany, pilot with a declared experience of 350 total flight hours including 210 hours in make and model.

Open Pilot Guarantee:
Any pilot authorized by the Original Insured with a minimum experience of 500 total hours including 100 hours in make and model as pilot in command. Subject to not having accidents in the last 5 years

(...)";

THAT articles 1561 and 1562 of the Civil Code, and article 1 of Supreme Decree No. 1147, published in the Official Register No. 123 of December 7, 1963, provide as follows:

Civil Code:

"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

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precisely from the nature of the obligation, or that, by law or custom, belong to it."

Supreme Decree:

"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, for 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.";

THAT from the analysis of the legal norms cited that govern insurance contracts, it is evident that, considering the principle of legal security; the principle "pacta sunt servanda", basic of Contractual Theory; the principle of Equity or Equivalence of obligations; and, the clause "Rebus Sic Stantibus", the obligations derived from a contract are valid and bind the parties as long as the initial circumstances on which the contract was based are maintained, and the conditions have been accepted and signed by the contractors;

THAT regarding the argument of the appellant, in the sense that the control body must ratify that the legal representative of Aeroliderman Cía. Ltda., signed the particular conditions of the contracted policy, it is necessary to point out that, from the review of the file, this office has been able to verify that within the constant documentation, there are two copies of the aircraft hull policy No. 0000161, the first is signed only by officials of the insurance company, while the second is signed by both contracting parties, however, on the cover of the policy and in the particular conditions signed by both parties, the National Intendancy observes that there are notable differences between the signature of the insured that appears in said policy, and the signature of the insured that appears in the Special Power and Judicial Representation granted by the gentleman Liderman Tobias Almeida, in his capacity as General Manager of Aeroliderman Cía. Ltda., in the Eleventh Notary of the Canton of Quito;

THAT it is necessary to mention that, the signatures of the officials of the insurance company both on the cover of the contracted policy and in the particular conditions, do not bear any similarity, to which, having the Superintendence of Banks no administrative competence to determine the authenticity of the signatures appearing in the aircraft hull policy No. 0000161, issued on October 18, 2012, by Latina de Seguros y Reaseguros C.A., by virtue of the competencies and powers exercised by the control body as determined by the Constitution of the Republic and the current legal norms, it is recommended not to continue with the processing of the appeal filed by the Judicial Attorneys of Aeroliderman Cía. Ltda.;

THAT the National Legal Intendancy through memorandum INJ-DNJ-SAL-2015-0033 of January 19, 2015, recommended to the Banking Board to leave without effect the appealed resolution; and,

IN exercise of its legal attributions,

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RESOLVES:

SINGLE ARTICLE.- LEAVE WITHOUT EFFECT resolution No. SBS-DNAE-2014-0041 of January 16, 2014, through which the National Directorate of Attention and User Education, of the Superintendence of Banks, rejected the claim presented by the doctors Antonio López Cobeña and Susana Hernández Clavijo, Legal Attorneys of the gentlemen Tobias Almeida Medina, Legal Representative and General Manager of AEROLIDERMAN CÍA. LTDA., as well as Judicial Attorneys of the lady Marcia Lorena Bosmediano Navas, heir of the gentleman Roberto Andrés Puga Bosmediano; leaving intact the right of the parties to proceed in accordance with the fifth paragraph of article 42 of the General Insurance Law.

NOTIFY.- Given in the Superintendence of Banks and Insurance, in Quito, Metropolitan District, on the twenty-fifth of March of two thousand fifteen.

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

I CERTIFY.- Quito, Metropolitan District, on the twenty-fifth of March of two thousand fifteen.

Lcdo. Pablo Cobo Luna
SECRETARY OF THE BANKING BOARD