Norm on Micro Insurance

Resolution No. CD-SIBOIF-892-1-JUN2-2015
Dated June 2, 2015

The Board of Directors of the Superintendence of Banks and Other Financial Institutions.

CONSIDERING

I
That Article 114 of Law No. 733, General Law of Insurance, Reinsurance, and Sureties, published in La Gaceta, Official Diary No. 162, 163, and 164, on August 25, 26, and 27, 2010, empowers the Board of Directors of the Superintendence of Banks and Other Financial Institutions to issue norms of general application to regulate the matter of micro insurance.

II
That Article 106 of the aforementioned Law No. 733 establishes that micro insurance is oriented toward low-income households that are normally not protected by other insurance and/or social security schemes, as well as persons working in the informal economy who do not have access to formal insurance, nor to the social protection benefits provided by employers or by the government through employers.

III
That to facilitate an "inclusive" insurance market that functions effectively for the less favored sectors, and thereby reduces their vulnerability; it is necessary to issue general guidelines to be followed by insurance companies for the commercialization of products under the micro insurance modality.

IV
That in accordance with the considerations set forth above, and based on the powers provided for in Articles 4 and 5, numeral 1) of the aforementioned Law 733; and Article 3, numeral 13) of Law 316; Law of the Superintendence of Banks and Other Financial Institutions, and its reforms.

In exercise of its powers,

HAS ISSUED

The following:
Resolution No. CD-SIBOIF-892-1-JUN2-2015

NORM ON MICRO INSURANCE

CHAPTER I
CONCEPTS, OBJECT, AND SCOPE

Article 1. Concepts. For the purposes of this norm, the concepts indicated in this article, both in uppercase and lowercase, singular or plural, shall have the following meanings:
a) Mass insurance marketer or marketer: Legal persons referred to in the regulations governing the matter of mass insurance commercialization. b) Insurance intermediary: Natural or legal persons referred to in the regulations governing the matter of authorization and operation of insurance intermediaries. c) Superintendence Law: Law No. 316, Law of the Superintendence of Banks and Other Financial Institutions and its reforms. d) General Insurance Law: Law No. 733, General Law of Insurance, Reinsurance, and Sureties, published in La Gaceta, Official Diary No. 162, 163, and 164, on August 25, 26, and 27, 2010. e) Micro insurance: Contract under which protection against specific and limited risks is granted to low-income persons, as well as small entities, in exchange for the payment of low-cost premiums. f) Collective policy: Document that evidences the contracting of insurance, providing coverage through a single contract to multiple insured persons who form a homogeneous community. g) Individual policy: Document that evidences the contracting of insurance, providing coverage to a single insured person. h) Premium: The value of the installment or payment that the policyholder or insured must satisfy to an insurance company as consideration for the coverage of the risk specified in the insurance, reinsurance, or surety contract. i) Insurance companies: Entities authorized by the Superintendence, operating in insurance, reinsurance, sureties, and reinsurances, national or foreign, privately owned, state-owned, or mixed, except for the exceptions expressly contemplated in the General Insurance Law. j) Application-certificate: Document that evidences the contracting of a collective policy. k) Superintendence: Superintendence of Banks and Other Financial Institutions. l) Superintendent: Superintendent of Banks and Other Financial Institutions.

Article 2. Object. This norm aims to establish the general guidelines to be followed by insurance companies for the commercialization of products under the micro insurance modality, regulating, among other aspects, the authorization requirements for policy models and the type of information that insurers must periodically supply to the Superintendence regarding the micro insurance products they commercialize.

Article 3. Scope. These provisions are applicable to insurance companies.

CHAPTER II
MICRO INSURANCE POLICIES

Article 4. Authorization requirements for policy models. In accordance with what is established in Article 109 of the General Insurance Law, insurance companies wishing to commercialize a micro insurance product must request authorization from the Superintendent, attaching the respective policy models, which must meet the following requirements:
a) Contain the minimum information required in Article 5 of this norm. b) Respond to the risk profile and protection needs of a specific insurable group. c) The coverages must be adequate to the characteristics of the sector to whom they are directed and consider their real and immediate protection needs. d) The policy conditions must be drafted precisely, without excessive technical complexity, in simple language, easily understandable, in clearly visible characters, such that the insured can understand what is covered and what is excluded. e) Have minimal and simplified exclusions, without deductibles, co-insurance, or extra premiums. f) The sum insured per individual cannot exceed US$10,000.00, or its equivalent in Córdobas according to the official exchange rate. g) Do not establish prior verifications regarding the persons and insurable assets, unless the nature of the insurance requires establishing them. In case such verifications are necessary, they must be consistent with the coverages granted in the micro insurance. h) The payment of the premium must be made in the manner and timeframe established in the policy. The insured's failure to pay will determine the suspension of coverage or the resolution of the contract, a situation that must be clearly established in the policy itself. i) Coverage begins from the date and time established in the particular conditions and the payment of the premium, and concludes on the date agreed upon by the parties, also established therein. j) Expenses related to the issuance of the policy must be incorporated within the amount of the premium. k) Claims procedures must be simplified and clearly established within the documents delivered to the insured. l) Upon the occurrence of the claim, the claim may be presented directly to the insurance company, or through the marketer or intermediary of the policy, who will process it with the respective insurer. m) The payment of the indemnity must be made within the timeframe established in the General Conditions of the policy, which must refer solely to the proof of the occurrence of the covered claim. n) The payment of the indemnity by the insurance company may be made directly to the insured, the designated beneficiary, or heirs, as applicable.

The Superintendent will resolve the request for authorization of the submitted policy model in accordance with the results of its analysis, within a period not exceeding three (3) months counted from the date of the request. In case of approval, it will notify the insurance company of the corresponding authorization resolution and order its registration in the Registry kept for such effect by the Superintendence. In case the submitted policy model does not meet the requirements established in this article, the Superintendent will communicate this to the requesting insurance company, so that it may remedy the omissions or make the necessary modifications for its authorization.

Article 5. Minimum content of policies. Micro insurance policies must contain the following minimum information:
a) Identification of the insurance company. b) Identification of the policyholder and/or insured. c) Detail of the coverages and exclusions of the policy. d) Procedure and means used by the insurance company to communicate to the insured modifications to the policy conditions. e) Timeframe for the payment of the indemnity. f) Timeframe to give notice of the claim and complete the necessary documentation for the processing of the claim. g) In the case of collective policies, a copy of the application-certificate of the policy must be delivered to the insured, which must contain the general and particular conditions of the policy. h) Grounds for cancellation of the policy.

Article 6. Commercialization. The commercialization of micro insurance will be carried out directly by the insurance company, by the mass insurance marketer, or through insurance intermediaries, based on the regulations applicable to each of these.

CHAPTER III
FINAL PROVISIONS

Article 7. Supply of information to the Superintendence. Insurance companies must remit statistical information quarterly to the Superintendent regarding their micro insurance operations in accordance with the annex of this norm, which is an integral part of it. The Superintendent may request any additional information for its supervisory duties.

Article 8. Modifications to the annex. The Superintendent is authorized to modify the annex of this norm to the extent that its application so requires; in which case, it must inform the Board of Directors of the Superintendence about such modifications.

Article 9. Transitional. Insurance companies currently commercializing micro insurance will have a maximum period of three (3) months counted from the entry into force of this norm to adjust to the requirements established therein. The Superintendent may extend the aforementioned period, upon duly reasoned request, and must inform the Board of Directors of this.

Article 10. Validity. This norm will enter into force from its publication in La Gaceta, Official Diary.

ANNEX

I. VALID MICRO INSURANCE POLICIES
Month and Year:
Name of the Insurance Company:
Currency Córdobas:

SECTORS | PRODUCT NAME | NUMBER OF POLICIES ISSUED | NUMBER OF INSURED | SUM INSURED | PREMIUMS | CLAIM AMOUNT | NUMBER OF CLAIMS

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General Manager Signature

II. VALID MICRO INSURANCE POLICIES
Month and Year:
Name of the Insurance Company:
Currency Dollars:

SECTORS | PRODUCT NAME | NUMBER OF POLICIES ISSUED | NUMBER OF INSURED | SUM INSURED | PREMIUMS | CLAIM AMOUNT | NUMBER OF CLAIMS

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General Manager Signature

III. VALID MICRO INSURANCE POLICIES
Month and Year:
Name of the Insurance Company:
Consolidated:

SECTORS | PRODUCT NAME | NUMBER OF POLICIES ISSUED | NUMBER OF INSURED | SUM INSURED | PREMIUMS | CLAIM AMOUNT | NUMBER OF CLAIMS

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General Manager Signature

(f) Ovidio Reyes R. (f) Marta Díaz O. (f) Gabriel Pasos Lacayo (f) Fausto Reyes B. (f) illegible (Silvio Moisés Casco Marenco) (f) illegible (Freddy José Blandón Argeñal) (f) Uriel Cerna Barquero. Secretary.

URIEL CERNA BARQUERO
Secretary of the Board of Directors SIBOIF