Banking Board of Ecuador

RESOLUTION No. JB-2015-3333

THE BANKING BOARD

CONSIDERING:

THAT according to the second paragraph of the Third Transitional Provision of the Organic Code of Monetary and Financial, 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 that were under its jurisdiction as of the date of entry into force of this Code, for a period of one hundred and eighty days;

THAT Mr. Milton Medardo Maygua Rodríguez contracted with Latina Seguros y Seguros C.A. the comprehensive vehicle insurance policy No. 0275816, valid from May 3, 2013, to May 3, 2014, to insure the vehicle brand MAZDA, model BT-50 CD STD FL TM 2.18, year 2013, black color, double cab PICKUP type, Chassis 8LFUNYO29DMG10160; Engine F2A10252, License Plate XBA9675, for an insured value of US$23,490.00;

THAT on August 25, 2013, Mr. Milton Medardo Maygua Rodríguez, under circumstances in which he was driving his own vehicle on the Santo Domingo - Quevedo route, before reaching Patricia Pilar at the height of Km 38, collided with the rear of a trailer that was parked almost occupying the entire right lane of the road without the respective signals or lights, which due to the low visibility caused by the fog, was not visible, remaining stuck on said route; upon seeing what happened, said trailer left the scene;

THAT the accident was verified according to Police Report No. 12849 of August 25, 2013, by Police Sergeant Luis Alberto Lozano Ulloa, of the National Police of Ecuador, who elevated the same to the Provincial Chief of Transit and Road Safety of Santo Domingo de los Tsachilas, indicating additionally that Mr. Maygua Rodríguez was transported by Red Cross personnel to the Santiago Clinic for medical evaluation, and that subsequently due to his delicate health state, he had been transferred by his family to the IESS Hospital;

THAT on August 28, 2013, the insured reported the accident that occurred to Latina Seguros y Reaseguros C.A., by presenting the "Claim Report" form No. 1213225 of the insurance company;

THAT Mr. Cristian Núñez Beltrán, Claims Executive of the Santo Domingo branch of the insurer, through communication of September 13, 2013, informed Mr. Milton Medardo Maygua Rodríguez that "...this (sic) declared as Total Loss by Collision," the insured vehicle, for the accident that occurred on August 25, 2013, so that to proceed with the respective procedure, in attached communication of the same date, he requested the sending of several documents;

THAT through an internal email of October 4, 2013, the aforementioned Claims Executive informed Mr. Julio Morales about "...the process accepted by the COMPANY for the settlement of the claim", considering the insured value, which was presented to Mr. Milton Medardo Maygua Rodríguez, for this reason he was indicated to present documentation to proceed with the procedure;

THAT through official letter of October 15, 2013, Mr. Cristian Núñez Beltrán, in order to continue with the corresponding procedure, requested the insured to send missing documentation, relative to the lien certificate issued by the Mercantile Registry and the blocking certificate for change of owner issued by the National Transit Agency;

THAT the formalization of the claim was carried out on October 25, 2013, on which date the insured presented the referred documents requested by the insurer;

THAT Mr. Luis Soto, official of Latina Seguros y Reaseguros C.A., through communication of November 15, 2013, indicates that he objects to the payment and disclaims any responsibility on this claim, based on the clause "Financed Premium Payments (Installments)" of the Particular Conditions of the policy; in article 5. "Payment of Premiums"; and, in article 8 "Obligations of the Insured in case of claim" of the General Conditions, related to the fact that at the date the accident occurred, part of it was unpaid, that is, the insured was in default of the premium payment in installments, which constituted the cause for the insurance company to object to the payment of the claim;

THAT in line with the above, from the "ACT OF NOTIFICATION OF REQUIREMENT" of the Fourth Notary of Quevedo, Province of Los Ríos, a copy of which is in the file, it is understood:

"today, Tuesday, December ten, two thousand thirteen, at 16h15'; (...) I went to the home of Mr. Milton Medardo Maygua Rodríguez, (...) with the purpose of notifying him, the denial of payment on the claim for Collision / Total Loss, (...) and the delivery of the check (...) for return of the premium; at said home no person was found; (...) so we went to the offices of the NRV Insurance Producer Advisor, interviewing Mr. Nick Roger Montaño Quiñónez, official of the company Latina Seguros y Reaseguros C.A. and Mr. Milton Medardo Maygua Rodríguez, after the explanations (...) the Insured Mr. Milton Medardo Maygua Rodríguez, refused to receive said notification (...)” (sic);

THAT through communication entered in the Superintendence on January 20, 2014, Mr. Milton Medardo Maygua Rodríguez, filed an administrative complaint against Latina Seguros y Reaseguros C.A., aimed at the insurer recognizing the payment of the indemnification for the accident that occurred to his vehicle, a complaint that prior to the report contained in the internal memorandum No. DNAE-SAU-2014-00095 of March 19, 2014, was resolved by the National Director of User Attention and Education with resolution No. SBS-DNAE-2014-285 of April 1, 2014, in the following terms:

"(...)ARTICLE 2.- ORDER the Company Latina Seguros y Reaseguros C.A. to pay in favor of Mr. Milton Medardo Maygua Rodríguez the sum of US$23,490.00 (...) less the (sic) deductions stipulated in the policy, with interest, from December 10, 2013,

the day following that in which the forty-five days provided for in article 42 of the General Insurance Law expired since the objection of the insurance company is outside the referred period." (sic);

THAT through writing entered in the Superintendence on April 23, 2014, Mr. Antonio José Arosemena Merino, General Manager, Legal Representative of Latina Seguros y Reaseguros C.A., with the professional sponsorship of lawyer Ana Elena Rueda Guerrero, filed an appeal before the Banking Board against the administrative act contained in resolution No. SBS-DNAE-2014-00285 of April 1, 2014, arguing in principal the following: that the appealed resolution orders payment considering that the objection of the insurer was made outside the 45-day period established in article 42 of the General Insurance Law, taking as the date of delivery of the last document October 25, 2013. "However, the last documents delivered: vehicle registration and lien certificate were delivered on OCTOBER 28, 2013, therefore the notarial verification of non-receipt of communication from the insurance company carried out by Dr. Felix Lara Castillo Fourth Notary of the Canton of Quevedo on December 10, 2013 was carried out within the period of 45 days established in the previously cited norm." (sic); and, that the Banking Board must consider that there is an express norm on the obligation to pay the premium according to Supreme Decree 1147, as well as that it cannot disregard what was determined regarding this in the General Conditions of the Comprehensive Insurance approved by resolution of the Superintendence of Banks and Insurance No. SBS-INSP-2005-125 of April 11, 2005;

THAT through communication No. LAT-L-01-170-13 of April 29, 2014, received in the control body on May 5, 2014, the General Manager of Latina Seguros y Reaseguros C.A. ratifies what was done by lawyer Ana Elena Rueda Guerrero;

THAT the appeal was granted by the National Intendant of the Private Insurance System with resolution No. SBS-INSP-2014-126 of June 10, 2014, who ordered the sending of the file to the Banking Board;

THAT with official letters Nos. JB-2014-1539 and JB-2014-1540, both of June 16, 2014, the Secretary of the Banking Board, sent to Mr. Antonio José Arosemena Merino, General Manager of the insurer and to Mr. Milton Medardo Maygua Rodríguez, certified copies of resolution No. SBS-INSP-2014-126 of June 10, 2014, attached to official letter No. JB-2014-1540 was sent, additionally, a photocopy of the writing of filing of the appeal;

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

"Art. 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 that in 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 and Insurance.

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

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 put this fact in 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, together with the interests calculated from the forty-five days previously indicated, at the maximum conventional rate fixed according to the law. If not paid within the granted period, he 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 according to the cited norm, once the forty-five days following that in 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 pertinence or lack of legal pertinence;

THAT numeral 14.2 of article 14 of Resolution No. JB-2013-2489 of May 28, 2013, containing the "Manual of Procedure for the Processing of Administrative Claims Filed Under the Support of Article 42 of the General Insurance Law", in force at the date of issuance of the appealed resolution, provides:

"Art. 14.- Without prejudice to the legal analysis carried out in each case, within administrative claims the payment of the claim is ordered when:

14.2 The insurance company formulates objections, justified or not, out of time, that is, outside the period of forty-five (45) days indicated by law for this effect;";

THAT the appealed resolution refers, that from the legal provision transcribed "...the present claim was formalized on October 25, 2013, that is, on that date the insured has presented the documents required in the policy to present his claim; and, the objection of the insurer has been presented on December 10, 2013 through a visit to the office of the NRV Insurance Producer Advisor, in said meeting the insurance company would notify of the denial of payment of the claim and return the payment of the premium to the insured, since being in default, the policy was cancelled. Mr. Milton Medardo Maygua Rodríguez did not accept the denial nor the return of the premium."(sic), therefore it established "...that the objection was presented outside the period of forty-five days provided for in article 42 of the General Insurance Law, within which the insurance company had to pay or object to the payment of the claimed claim.";

THAT regarding this, the argument of the insurance company that the objection to the payment of the claim was issued within the period established in article 42 of the General Insurance Law lacks support, in reason that the last documents relative to the vehicle registration and lien certificate were delivered by the insured on October 28, 2013 and not on October 25, 2013 as the appealed resolution specifies; since according to what is evidenced in the documentation in the file, Latina Seguros y Reaseguros C.A. through communication of September 13, 2013, among varied documentation, requested from Mr. Milton Medardo Maygua Rodríguez the aforementioned registration, and subsequently in order to continue with the corresponding procedure, with communication of October 15, 2013, he requested the sending of the missing documents at that date consisting of the lien certificate issued by the Mercantile Registry and the blocking certificate for change of owner issued by the National Transit Agency of the canton of Quevedo, documents that were delivered by the insured to the company on October 25, 2013, as evidenced by the receipt certificate, in which the signature of the person who received them is stamped; the # of Citizenship ID: "120620164-0"; and, the date of receipt "25-10-2013"; and, that according to the aforementioned "ACT OF NOTIFICATION OF REQUIREMENT" the insurer notified the insured of the objection to the payment of the claim and the return of the value of the premium, with the argument that being in default, the policy was cancelled, on December 10, 2013, a day after December 9, 2013, on which the legal period of forty-five days established in the aforementioned article 42 of the Law ibidem expired;

THAT article 22 of Supreme Decree No. 1147, published in Official Register No. 123 of December 7, 1963, which contains the Legislation on the insurance contract, establishes:

"Art. 22.- It is incumbent on the insured to prove the occurrence of the claim, which is presumed to have occurred by fortuitous event, unless proof to the contrary. Likewise, it is incumbent on the insured to prove the amount of the indemnification due to the insurer. It is incumbent on the latter, in both cases, to demonstrate the facts or circumstances excluding his responsibility.";

THAT in the case at hand, Mr. Milton Medardo Maygua Rodríguez has proven the occurrence of the claim through the presentation of Police Report No. 12849 mentioned above and of the invoices for the expenses of prescribed medications and ambulance service paid by him; as well as he has proven the amount of the indemnification, since in the case of total loss by collision, as indicated to the insured with communication of September 13, 2013 by the Claims Executive of the Santo Domingo branch of the insurer, and from the indemnification detail in the internal email of October 4, 2012, referenced in the considerations preceding, the amount of the indemnification corresponds to the insured value in policy No. 0275816;

THAT regarding the argument that the Banking Board must consider that there is an express norm on the obligation to pay the premium according to Supreme Decree 1147, as well as that it cannot disregard what was determined in the General Conditions of the Comprehensive Insurance approved by this Superintendence through resolution No. SBS-INSP-2005-125 of April 11, 2005, it reiterates in textual form the pertinent fragments expressed regarding this in resolution No. SBS-DNAE-2014-285 of April 1, 2013, object of the present appeal:

"(...)

THAT through communication of September 13, 2013, Mr. Cristian Núñez Beltrán, Claims Executive of the Santo Domingo branch of the insurance company, indicates that Mr. Milton Medardo Maygua Rodríguez, that the insured vehicle has been declared as total loss by collision;

THAT in the internal email of October 4, 2013, Cristian Fernando Núñez (sic) Beltrán directs to Julio Morales, the settlement of the claim, that is, the insurance company accepted in principle the payment of the claim, as well as within the settlement the installments 4 and 5 are already discounted, the same (sic) that later are causes for the objection of the payment of the indemnification for claim. That is, in a first instance Latina Seguros y Reaseguros S.A. (sic) assumes its responsibility regarding the claim inobservance of its own stipulations subscribed within the vehicle insurance policy. Said email was presented to the insured, for this reason he was indicated to present documentation to proceed with the procedure;";

THAT based on the case file and with a view to resolution No. SBS-DNAE-2014-285, of April 1, 2014, issued by the National Directorate of User Attention and Education, this office ratifies the criterion of said administrative unit in the sense that the objection by Latina Seguros y Reaseguros C.A. was presented outside the legal period of forty-five days provided for in article 42 of the General Insurance Law, since the formalization of the claim was carried out on October 25, 2013, on which date the insured presented the documents required by the insurer, and the referred objection was made on December 10, 2013, so it corresponds that this control body order the payment plus the interests described in article 42 of the law ibidem;

THAT the National Legal Intendancy, through memorandum INJ-DNJ-SAL-2015-0064 of January 27, 2015, recommended to the Banking Board to reject the claim contained in the appeal filed;

AND, IN exercise of its legal attributes,

RESOLVES:

ARTICLE 1.- REJECT the claim contained in the appeal filed by Mr. Antonio José Arosemena Merino, General Manager of Latina Seguros y Seguros C.A.; and, consequently, CONFIRM the resolution issued by the National Director of User Attention and Education No. SBS-DNAE-2014-285 of April 1, 2014, through which it ordered the insurance company to pay to "...Mr. Milton Medardo Maygua Rodríguez, the sum of US$ 23,490.00, (...) less the deductions stipulated in the policy, with interest, from December 10, 2013, the day following that in which the forty-five days provided for in article 42 of the General Insurance Law expired since the objection of the insurance company is outside the referred period." (sic).

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 in which it is notified with this resolution, under legal warnings. If it does not do so, it will incur in what is provided for in letter a) of article 55 of the General Insurance Law.

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

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

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

Lcdo. Pablo Cobo Luna
SECRETARY OF THE BANKING BOARD