Technical Standards for Transparency and Disclosure of Information by Insurance Companies

CNBCR-15/2018
NCM-03
TECHNICAL STANDARDS FOR TRANSPARENCY AND DISCLOSURE OF INFORMATION BY INSURANCE COMPANIES Approval: 12/20/2018 Effective Date: 01/07/2019 Alameda Juan Pablo II, between 15 and 17 North Avenue, San Salvador, El Salvador. Tel. (503) 2281-8000 www.bcr.gob.sv

The COMMITTEE OF THE CENTRAL RESERVE BANK OF EL SALVADOR,

CONSIDERING:
I. That Article 2 of the Law on Supervision and Regulation of the Financial System establishes that the Financial Supervision and Regulation System aims to ensure the efficiency and transparency of the financial system, as well as the adoption of the highest standards of conduct in the development of their business.

II. That Article 99 of the Law on Supervision and Regulation of the Financial System, in subsection a), establishes that it is the responsibility of the Committee of the Central Reserve Bank to approve technical norms and provisions that must be issued in accordance with the laws regulating supervised entities, especially those related to information transparency requirements.
III. That Article 99 of the Law on Supervision and Regulation of the Financial System, in subsection b), establishes that it is the responsibility of the Committee of the Central Reserve Bank to approve technical norms that provide the public with sufficient and timely information about the products and services offered by members of the financial system.
IV. That Article 52 of the Insurance Companies Law establishes that insurance companies and intermediaries must supply users of the services they provide with the necessary information to achieve maximum transparency in the operations they carry out and allow the user to choose the best options in the market.
V. That Article 86 of the Insurance Companies Law establishes that insurance companies must send any information requested by the Central Reserve Bank of El Salvador for the fulfillment of its functions.
VI. That the transparency of information regarding services offered by insurance companies seeks to improve access to such information, so that the general public can make decisions with adequate information regarding the insurance they wish to acquire or contract.
VII. That it is necessary to establish minimum conditions to foster a framework of transparency for the benefit of the general public.

THEREFORE, in virtue of the regulatory powers conferred upon it by Article 99 of the Law on Supervision and Regulation of the Financial System,

AGREES to issue the following:

TECHNICAL STANDARDS FOR TRANSPARENCY AND DISCLOSURE OF INFORMATION BY INSURANCE COMPANIES

CHAPTER I
OBJECTIVE, SUBJECTS, AND TERMS

Objective
Art. 1.- These Norms aim to define the minimum transparency measures that the obligated subjects of these Norms must comply with, as a mechanism for users to make informed decisions responsibly regarding the insurance they wish to contract.

Subjects
Art. 2.- The subjects obligated to comply with the provisions established in these Norms are:
a) Insurance companies constituted in the country; b) Branches of foreign insurers established and authorized in the country; and c) Cooperative associations providing insurance services.

Terms
Art. 3.- For the purposes of these Norms, the terms indicated below have the following meaning:
a) Insured: A natural or legal person who is exposed themselves or their assets to insurable risk and, under such condition, depending on the type of insurance and its contracting method, is the holder of rights and obligations derived from the insurance contract; b) Central Bank: Central Reserve Bank of El Salvador; c) Beneficiary: A natural or legal person who may or may not be the insured, but who has been designated by the policyholder or insured, as applicable to the type of insurance, as the holder of the rights to receive the indemnification or payment of the insured sum in the insurance contract; d) Insurance Contract or Policy: It is a contract whereby the Insurance Company undertakes, through the payment of a premium, to cover a specific risk and to indemnify up to the agreed sum, in accordance with what is established with the policyholder or insured; e) Policyholder or Applicant: A natural or legal person who contracts the insurance and undertakes the payment of premiums; f) Complaint or Dissatisfaction: Those presented by insured persons, policyholders, or beneficiaries before the entity due to disagreements occurring after the occurrence of an accident;

g) Disclosure: Publications in newspapers, websites, any other electronic or digital medium, as well as displays on physical or electronic billboards by the subjects obligated to comply with these Norms; h) Entity: Subjects referred to in Article Two of these Norms; i) Administrative Body: A collegiate body that performs the administration function of the entity; for the purposes of these Norms, this refers to the Board of Directors or Administrative Council, as applicable; j) Specialized computer programs or other IT tools: Software or office application that the entity will use to control or manage complaints or dissatisfaction received from insured persons, beneficiaries, policyholders, or applicants; k) Claim: An indemnification request submitted by the insured, policyholder, or beneficiary to the entity; l) Superintendency: Superintendency of the Financial System; and m) User: Any natural or legal person who is in the preliminary agreement phase with the obligated subjects of these Norms, regarding the products or services offered by them.

CHAPTER II
TRANSPARENCY OF INFORMATION

Principle of Information Transparency
Art. 4.- The principle of transparency aims to strengthen relationships between entities and users, insured persons, beneficiaries, or policyholders, in order to generate trust among them, through the disclosure of information about the services provided by the entities. This information must be clear, truthful, timely, complete, and accessible in formats that allow for easy comprehension.

Information to be Provided to the User in Advance Art. 5.- The entity must provide users, through physical delivery or electronic availability, prior information before the celebration of the insurance contract, with the following minimum content:
a) Commercial premium; b) Insured sum; c) Covered risks, as applicable; d) Deductibles and/or co-insurance, as applicable; e) Uncovered risks, as applicable; f) Excluded risks, as applicable; g) Waiting period, as applicable; h) List of provider network, if applicable;

i) Procedure in case of accident; j) Method of indemnification for the accident; k) Validity of the insurance, as applicable; l) Early termination and conditions for partial premium refunds; and m) Explanatory legend regarding possible modification of the offered premium and coverage, depending on the subsequent evaluation performed by the entity.

Entities must take into account the interests of different users when developing and distributing insurance products, which must be promoted clearly, fairly, and without deception. Independent agents, insurance brokers, and mass marketers, as applicable, are obligated prior to the celebration of any insurance contract to comply with what is established in this article when presenting insurance offers to users.

Information on Intermediaries Authorized by the Superintendency Art. 6.- The entity shall make available to the public, through its website, a link directing to the Superintendency's website, where the list of independent agents, insurance brokers authorized to commercialize insurance contracts or policies, and mass marketers is located.

Information to be Provided to the Insured and/or Policyholder Art. 7.- The entity must provide the insured and/or the policyholder or applicant, through physical or electronic delivery, according to their instructions, the following information:
a) Summary of coverage clauses, such as: (3)
i. Premium amount;
ii. Covered risks;
iii. Uncovered risks;
iv. Insurance exclusions;
v. Incontestability;
vi. Waiting periods; and
vii. Claims processing procedure.
b) Policy renewal process upon expiration of its validity; c) Procedure in case of accident and documentation to be presented; d) Information on the procedure to follow in case of discrepancies between the entity and the insured or beneficiary regarding a claim; e) Information on claim progress according to stages thereof (receipt, analysis of validity, authorization of budget or procedure, as applicable, disbursement, etc.); and f) Information on the formal attention service referred to in Article 8 of these Norms.

Independent agents, insurance brokers, and mass marketers are obligated to disclose information in accordance with what is established in this article.

On the Formal Attention Service
Art. 8.- The entity must inform about the formal attention service to handle complaints or dissatisfaction from policyholders, insured persons, or beneficiaries by any means, specifying the hours for public attention and communication media, such as: attention telephone or service booth, email, physical address of the attention office, among others. Likewise, it must inform about the mechanisms and procedures for attention, as well as estimated response times. The entity must reveal on its website the most frequently asked questions, with their respective answers, which must be incorporated as part of the disclosure they perform. Likewise, the entity must inform the policyholder, insured person, or beneficiary that, in case of disagreement with the resolution of the submitted claim, they may go to the entity, the Superintendency, or the Consumer Ombudsman to express their dissatisfaction regarding the matter. (3)

Training for Personnel Related to the Formal Attention Service Art. 9.- The entity must train employees related to the attention of insured persons, beneficiaries, or policyholders and users on the content of the different policies marketed. Entities must include intermediaries and insurance brokers, or personnel of societies registered as mass marketers, in the training they conduct. The training program and the training conducted must be duly documented and available to the Superintendency.

CHAPTER III
OTHER PROVISIONS AND EFFECTIVENESS

Generation of Statistical Information
Art. 10.- The entity must have specialized computer programs or other IT tools for the proper control of complaints or dissatisfaction that insured persons, beneficiaries, policyholders, or applicants present to the entity's formal attention service, which must contain, among others, the number of cases, reason for received complaints or dissatisfaction, cases in process or completed, according to the format described in Annex No. 1 of these Norms. (1) This program or IT tool will generate statistics to determine which lines of business are presenting the most complaints or dissatisfaction, with the objective that the administrative body makes decisions based on relevant and timely information in accordance with what is established in Article 35 subsections d), e), h), and j) of the Law on Supervision and Regulation of the Financial System. Such program will be available to the Superintendency in accordance with Article 32 of the Law on Supervision and Regulation of the Financial System.

Role of Internal Auditor
Art. 11.- The Internal Audit of the obligated subjects must ensure compliance with these Norms.

Public Disclosure on Statistical Summary
Art. 12.- The entity must disclose on its website a link directing to the statistical summary regarding the reason for complaints or dissatisfaction received in the previous quarter, as well as efficiency indicators of resolved cases and maximum times for their resolution. (1) Entities must present the statistical summary taking into consideration what is established in Annex No. 1 of these Norms.

Submission of Statistical Information
Art. 13.- The entity must remit monthly to the Superintendency, the Consumer Ombudsman, and the Central Bank, within five business days following the month in reference, the statistical control established in Annex No. 1 of these Norms. In case of no inquiries or complaints, the entity will remit to the Superintendency, the Consumer Ombudsman, and the Central Bank a note stating such situation. Entities must remit to the Superintendency within the first five business days of March 2020 the first report containing information relative to January and February 2020 in accordance with Annex No. 1 of these Norms. (1) (2)

Technical Details for Submission of Information to the Superintendency Art. 14.- The Superintendency will remit to the entities, with a copy to the Central Bank, within a maximum period of thirty days after the effective date of these Norms, the technical details related to the sending of the information requested in Article 13 of these Norms. The technical details will be limited to the collection of information as regulated in these Norms.

Sanctions
Art. 15.- Non-compliance with the provisions contained in these Norms will be sanctioned in accordance with what is established in the Law on Supervision and Regulation of the Financial System.

Transitory Provisions
Art. 16.- Entities subject to these Norms will have up to six months from the communication of the technical details by the Superintendency to adapt and comply with what is established in Articles 10, 12, and 13 of these Norms.

Unforeseen Aspects
Art. 17.- Aspects not provided for in regulatory matters in these Norms will be resolved by the Central Bank through its Committee of Norms.

Effectiveness
Art. 18.- These Norms will enter into effect starting from the seventh day of January two thousand nineteen.

MODIFICATIONS:
(1) Modifications to Articles 10, 12, 13, and Annexes No. 1 and No. 2, approved by the Central Reserve Bank of El Salvador through its Committee of Norms, in Session No. CN-17/2019, dated October 23, two thousand nineteen, with effectiveness starting from November 14, two thousand nineteen. (2) Modification to Article 13 approved by the Central Reserve Bank of El Salvador through its Committee of Norms, in Session No. CN-02/2020, dated February 4, two thousand twenty, with effectiveness starting from the day of its communication. (3) Modifications in Articles 7 and 8, approved by the Central Reserve Bank of El Salvador through its Committee of Norms, in Session No. CN-05/2026, dated June 30, two thousand twenty-six, with effectiveness starting from July 15, two thousand twenty-six.

Annex No. 1 (1)
CONTROL OF COMPLAINTS OR DISSATISFACTION

N°	Requirement	Description
1	Agency that received the complaint or dissatisfaction	Name of the agency, branch, office, or unit that received the complaint or dissatisfaction.
2	Control Number	Tracking or control number assigned by the entity to reference the complaint or dissatisfaction.
3	Date of complaint or dissatisfaction	Date on which the insured, policyholder, or beneficiary presented the complaint or dissatisfaction to the entity.
4	Name of user or client	Name of the user or client presenting the complaint or dissatisfaction.
5	Nationality of user or client	Nationality of the user or client presenting the complaint or dissatisfaction.
6	Type of person	Whether the person presenting the complaint or dissatisfaction is Natural or Legal.
7	Policy	Insurance policy number.
8	Sex	Sex of the person (provided that this is a natural person).
9	Reason for complaint or dissatisfaction	Code of the reason for the complaint or dissatisfaction according to Annex No. 2.
10	Status of complaint or dissatisfaction	Status in which the complaint or dissatisfaction is found: in process or completed.
11	Resolution Result	Result of the resolution of the complaint or dissatisfaction: favorable, unfavorable, or withdrawn by the client.
12	Resolution Date	Date on which the complaint or dissatisfaction was resolved.
13	Name of Unit	Name of the responsible unit in the entity to attend to the complaint or dissatisfaction.
14	Operational Risk Generating Factors	Operational risk generating factors.

Annex No. 2 (1)
CODE OF REASONS FOR COMPLAINTS OR DISSATISFACTION

Code	Detail of Reasons for Complaints or Dissatisfactions
1	Problems with contract clauses, policies, conditions, agreements
2	Problems referred to claims submitted
3	Lack of information on the contracted insurance
4	Time of payment of indemnification
5	Rejection for uncovered accident
6	Dissatisfaction with the amount of indemnification
7	Dissatisfaction with insurance policy conditions
8	Dissatisfaction with the assignment of benefits
9	Cancellation of the insurance policy
10	Rejection for omissions or false declarations
11	Rejection for accident outside the validity of the insurance
12	Non-delivery of insurance policy
13	Non-delivery of requested endorsement or annex
14	Dissatisfaction with the premium amount
15	Dissatisfaction with the deductible or franchise
16	Did not receive insurance certificate
17	Related to the conduct of the intermediary
18	Mistreatment in the attention to the insured or beneficiary
19	Related to charges
20	Related to provider network
21	Submitted reconsiderations
22	Other reasons

Technical Standards for Transparency and Disclosure of Information by Insurance Companies

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