Banking Board of Ecuador

RESOLUTION No. JB-2015-3422

THE BANKING BOARD

CONSIDERING:

THAT the second paragraph of the Third Transitional Provision of the Organic Monetary and Financial Code determines that the Banking Board will continue to act until it resolves all claims, appeals, and other administrative procedures it was handling on the date of entry into force of said code, within a period of one hundred and eighty days, extendable at the discretion of the Monetary and Financial Policy and Regulation Board;

THAT with insurance policy No. 238760, issued by Bolívar Compañía de Seguros del Ecuador S.A., in liquidation, valid from March 30, 2013, to March 30, 2014, the vehicle brand TOYOTA, year 2011, model YARIS, license plate PBS2127, engine 1ZRO742372, insured value: US$24,015.00, was insured. From the aforementioned policy, it is recorded that the insured is Mr. Marco Raúl Mantilla Andrade;

THAT through the form "Auto Insurance – Vehicle Claim for Loss," Mr. Marco Raúl Mantilla Andrade informed Bolívar Compañía de Seguros del Ecuador S.A., in liquidation, of the accident that occurred on February 24, 2014, due to a collision of the insured vehicle, in the sector of the Vía Oriental, in the city of Quito;

THAT on March 17, 2014, the Executive President of Bolívar Compañía de Seguros del Ecuador S.A., in liquidation, through letter No. DRQ-1026-2014, denied the claim filed by the insured based on Article 8.- Excluded Risks, numeral 20, of the General Conditions of Vehicle Insurance Policy No. 238760;

THAT through a document entered into the control agency on April 14, 2014, Mr. Marco Raúl Mantilla Andrade filed an administrative complaint against Bolívar Compañía de Seguros del Ecuador S.A., in liquidation, for the denial of payment of the indemnity under the vehicle insurance policy contracted; and requested that the insurance company be ordered to make the payment of US$ 18,000.00 in accordance with the proforma invoices presented in the claim;

THAT with letter No. DNAE-SAU-2014-02514 of April 23, 2014, the Subdirector of User Attention (E), requested from Bolívar Compañía de Seguros del Ecuador S.A., in liquidation, the pertinent explanations and supporting documents for the denial of the claim filed by Mr. Marco Raúl Mantilla Andrade;

THAT through communication entered into the Superintendence of Banks on May 8, 2014, the insurer provided attention to the request of the control agency;

THAT with resolution No. SBS-DNAE-2014-644 of July 29, 2014, the National Director of User Attention and Education, ordered:

"(...)"

RESOLVES:

SINGLE ARTICLE.- REJECT the administrative claim filed by Mr. Marco Raúl Mantilla Andrade against BOLÍVAR COMPAÑÍA DE SEGUROS DEL ECUADOR S.A.

---

Banking Board of Ecuador

Resolution No. JB-2015-3422

Page 2

"(...)";

THAT through a document presented to the control agency on August 12, 2014, Mr. Marco Raúl Mantilla Andrade, with the professional sponsorship of Dr. Diego Logroño Astudillo, filed an appeal against the resolution No. SBS-DNAE-2014-644 of July 29, 2014, before the Banking Board, under the provisions of Article 70 of the General Insurance Law;

THAT with resolution No. SB-INSP-2014-212 of October 27, 2014, the National Superintendent of the Private Insurance System granted the appeal filed by Mr. Marco Raúl Mantilla Andrade, and ordered the sending of the respective file; all this prior to the delivery of the appeal request made through letter No. INSP-DA1-2014-3311 of September 23, 2014;

THAT the appellant based his appeal on the following:

"(...)

I must indicate that although it is true I stated that I was going sixty kilometers per hour, it was because at that moment I was nervous and surprised by the accident, moreover at no time did I look at the speedometer; I must emphasize that at 9:00 AM when the accident occurred is rush hour, and in the sector of the cloverleaf from south to north one cannot drive faster than forty kilometers per hour due to vehicle congestion, despite the speed limit being fifty kilometers per hour. It is for this reason more than sufficient to assert my rights before the Superior.

(...)" (sic);

THAT the first five paragraphs of Article 42 of the General Insurance Law, in force on the date of this resolution, provide as follows:

"Every insurance company has the obligation to pay the contracted insurance or the corresponding part of 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 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 this fact to the knowledge of the Superintendent of Banks, who, upon verifying this situation, will order payment within a period not exceeding fifteen days, together with interest calculated from the aforementioned forty-five days, at the maximum conventional rate fixed according to law. If payment is not made within the granted period, it will order the forced liquidation of the insurance company."

---

Banking Board of Ecuador

Resolution No. JB-2015-3422

Page 3

If the insurance company formulates objections to the claim and no agreement is reached with the insured or beneficiary, the Superintendence 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 according to the cited norm, 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, 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 may go to the Superintendence of Banks to ask it to order the insurance company to pay for the loss, and if there are grounds for the denial of said payment, it will analyze them to determine their justification. Therefore, according to this legal provision, it is established that the Superintendence of Banks is competent to hear and resolve the present administrative claim; additionally, from the documentation reviewed in the file, it is determined that the insurer presented its objection to the payment of the claimed loss within the legal deadline;

THAT the insurer through letter No. DRQ-1026-2014 of March 17, 2014, denied the payment of the indemnity claimed for the accident that occurred, in the following terms:

"(...)"

GENERAL CONDITIONS OF THE POLICY:

ARTICLE 8.- EXCLUDED RISKS

The Company is not responsible and is exempt from all obligation in the following cases:

Numeral 20.- "When the driver disregards regulatory traffic signals, does not obey the red signal of traffic lights, drives at a speed exceeding the permitted speed, or commits infractions of the public traffic law" (current ORGANIC LAW OF LAND TRANSPORT, TRAFFIC AND ROAD SAFETY).

In the case in reference, according to the version in the LOSS CLAIM FORM, the Insured states the following:

"... What was the speed of the vehicle immediately before the accident, 60 KM / HOUR."

As can be observed in the Loss Claim Form, an infraction of the ORGANIC LAW OF LAND TRANSPORT, TRAFFIC AND ROAD SAFETY would have occurred, for which reason this loss lacks coverage and leaves this Company exempt from all obligation and

---

Banking Board of Ecuador

Resolution No. JB-2015-3422

Page 4

responsibility.

"(...)" (sic);

THAT Article 22 of Supreme Decree No. 1147, published in the Official Register No. 123 of December 7, 1963, states as follows:

"Art. 22.- It is incumbent upon the insured to prove the occurrence of the loss, 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 due from the insurer. It is incumbent upon the latter, in both cases, to demonstrate the facts or circumstances excluding its responsibility";

THAT in the present case, the insurer has based its objection to the payment of the corresponding indemnity on the fact that the insured exceeded the legally permitted speed limit at the time of the accident, in an urban zone, since in the corresponding accident claim form, the insured states that the speed at the time of the accident was 60 Km/hour;

THAT regarding the speed at which the insured was traveling at the time of the accident that produced the loss subject of this resolution, there is no police report, report from a vehicle speed radar, legally rendered testimonies, or other suitable element of proof regarding the commission of an infraction to the Organic Law of Land Transport, Traffic and Road Safety;

THAT in the file formed around the appeal, there are two documents signed by the appellant, Mr. Marco Raúl Mantilla Andrade, with different versions of the speed at which he was driving, thus, in the claim form presented to the insurance company, it states that he was doing so at sixty kilometers per hour, a private instrument in which the insured affirms that he has not filled out and that he signed it due to nerves caused by the loss; and in the sworn declaration granted through public deed of March 17, 2014, before Notary Number Thirty-Three of Quito, Dr. Fernando Castro, he affirms that he was driving at no more than fifty kilometers per hour; an act recorded in a public instrument with oath, under the responsibility of the grantor; without other suitable elements being present in the record to prove such circumstance, such as police report, technical reports of vehicle speed control, legally rendered testimonies, or others, so that said sworn declaration is presumed to have been made in good faith, unless the contrary is proven, as established in Art. 722 of the Civil Code;

THAT according to what is established in Article 1562 of the Civil Code, 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 the insured has proven the existence of the loss, which is presumed to have been produced by fortuitous event, unless proof to the contrary is provided, as well as the amount of the indemnity due from the insurance company, as required by Article 22 of Supreme Decree 1147, while this has not managed to demonstrate the facts or circumstances excluding its responsibility;

---

Banking Board of Ecuador

Resolution No. JB-2015-3422

Page 5

THAT Article 82 of the Constitution of the Republic establishes that the right to legal security is based on respect for the Constitution and on the existence of prior, clear, public norms and applied by competent authorities;

THAT number five of Article 11 of the Constitution of the Republic determines:

"5. In matters of constitutional rights and guarantees, public servants, administrative or judicial, must apply the norm and interpretation that most favor its effective implementation."; and,

IN exercise of its legal attributes,

RESOLVES:

ARTICLE 1.- ACCEPT the claim contained in the appeal filed by Mr. Marco Raúl Mantilla Andrade; and, consequently, REVOKE resolution No. SBS-DNAE-2014-644 of July 29, 2014, with which the National Director of User Attention and Education resolved to reject the administrative claim filed by Mr. Marco Raúl Mantilla Andrade against Bolívar Compañía de Seguros del Ecuador S.A., currently in liquidation; and in its place order that the aforementioned insurance company pay in favor of the insured the value agreed in the contracted insurance policy, minus the deductions established in it, without interest, since the insurer's objection was issued within the period determined by Art. 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 warnings. If it does not do so, it will be subject to what is provided in letter a) of Article 55 of the General Insurance Law.

NOTIFY. Given at the Superintendence of Banks and Insurance, in Quito, Metropolitan District, on May 20, 2015.

---

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

I CERTIFY.- Quito, Metropolitan District, on May 20, 2015.

Lcdo. Pablo Cobo Luna
SECRETARY OF THE BANKING BOARD

---

Banking Board of Ecuador