Technical Standards for Transparency and Disclosure of Information of Insurance Companies — SSF — SV

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

The COMMITTEE OF STANDARDS 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 Standards of the Central Reserve Bank to approve technical standards 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 Standards of the Central Reserve Bank to approve technical standards 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 the greatest 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 required by the Central Reserve Bank of El Salvador for the fulfillment of its functions.

VI. That the transparency of information of services offered by insurance companies seeks to improve access to it, so that the general public can make decisions with due information regarding the insurance they wish to acquire or contract.

VII. That it is necessary to establish minimum conditions to promote a framework of transparency for the benefit of the general public.

THEREFORE, by virtue of the regulatory powers conferred 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 OF INSURANCE COMPANIES

CHAPTER I
OBJECT, SUBJECTS, AND TERMS

Object
Art. 1.- These Standards aim to define the minimum transparency measures that the obligated subjects of these Standards 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 Standards are:
a) Insurance companies constituted in the country; b) Branches of foreign insurers established and authorized in the country; and c) Cooperative associations that provide insurance services.

Terms
Art. 3.- For the purposes of these Standards, the terms indicated below have the following meaning:
a) Insured: Natural or legal person who is exposed in themselves or their assets to the insurable risk and in 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: 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 by which the Insurance Company undertakes, through the payment of a premium, to provide coverage for 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: Natural or legal person who contracts the insurance and undertakes the payment of premiums; f) Complaint or Disagreement: Those presented by insured persons, policyholders, or beneficiaries before the entity due to disagreements subsequent to the occurrence of a claim;

g) Disclosure: Publications in newspapers, websites, any other electronic or digital medium, as well as exhibitions in physical or electronic billboards by the subjects obligated to comply with these Standards; h) Entity: Subjects referred to in Article Two of these Standards; i) Administrative Body: Collegiate body that performs the administration function of the entity; for the purposes of these Standards, it refers to the Board of Directors or Administrative Council, as applicable; j) Specialized software programs or other computer tools: Software or office application that the entity will use for the control or administration of complaints or disagreements received from insured persons, beneficiaries, policyholders, or applicants; k) Claim: Request for indemnification presented by the insured, policyholder, or beneficiary before the entity; l) Superintendence: Superintendence of the Financial System; and m) User: Any natural or legal person who is in the preliminary agreement phase with the subjects obligated in these Standards, 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 the relationship 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 to 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) Risks not covered, as applicable; f) Excluded risks, as applicable; g) Waiting period, as applicable; h) List of provider network, if applicable;

i) Procedure in case of claim; j) Form of claim indemnification; k) Insurance validity period, 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 in a clear, fair, and non-misleading manner. 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 Superintendence Art. 6.- The entity will make available to the public, through its website, a link directing to the Superintendence's website, where the list of independent agents, authorized insurance brokers for marketing contracts or insurance policies, and mass marketers is found.

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. Risks not covered;
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 claim 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 its stages (receipt, analysis of validity, authorization of budget or procedure, as applicable, disbursement, etc.); and f) Information on the formal service of attention referred to in Article 8

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

On the formal service of attention
Art. 8.- The entity must inform about the formal service of attention, to handle complaints or disagreements from policyholders, insured persons, or beneficiaries by any means, specifying the schedule 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 carry out. Likewise, the entity must inform the policyholder, insured person, or beneficiary that, in case of disagreeing with the resolution of the presented claim, they may go to the entity, the Superintendence, or the Consumer Ombudsman to express their disagreement regarding it. (3)

Training for personnel related to the formal service of attention Art. 9.- The entity must train employees related to the attention of insured persons, beneficiaries, 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 carry out. The training program and the training carried out must be duly documented and available to the Superintendence.

CHAPTER III
OTHER PROVISIONS AND EFFECTIVE DATE

Generation of statistical information
Art. 10.- The entity must have specialized software programs or other computer tools for the proper control of complaints or disagreements that insured persons, beneficiaries, policyholders, or applicants present to the entity's formal service of attention, which must contain, among others, the number of cases, reason for received complaints or disagreements, cases in process or completed, according to the format described in Annex No. 1 of these Standards. (1) This program or computer tool will generate statistics to know which lines of business are presenting the most complaints or disagreements, 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 Superintendence 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 Standards.

Disclosure to the public on statistical summary Art. 12.- The entity must disclose on its website a link directing to the statistical summary on the reason for complaints or disagreements 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 Standards.

Submission of statistical information
Art. 13.- The entity must remit monthly to the Superintendence, 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 Standards. In case of no inquiries or complaints, the entity will remit to the Superintendence, the Consumer Ombudsman, and the Central Bank a note stating such situation. Entities must remit to the Superintendence 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 Standards. (1) (2)

Technical details for the submission of information to the Superintendence Art. 14.- The Superintendence 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 Standards, the technical details related to the sending of the information requested in Article 13 of these Standards.

The technical details will be limited to the collection of information as regulated in these Standards.

Sanctions
Art. 15.- Non-compliance with the provisions contained in these Standards 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 Standards will have up to six months from the communication of the technical details by the Superintendence to adapt and comply with what is established in Articles 10, 12, and 13 of these Standards.

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

Effective Date
Art. 18.- These Standards will enter into effect as of January seven, 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 Standards, in Session No. CN-17/2019, dated October 23, two thousand nineteen, with effect as of November fourteen, two thousand nineteen. (2) Modification to Article 13 approved by the Central Reserve Bank of El Salvador through its Committee of Standards, in Session No. CN-02/2020, dated February 4, two thousand twenty, with effect as of 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 Standards, in Session No. CN-05/2026, dated June 30, two thousand twenty-six, with effect as of July 15, two thousand twenty-six.

Annex No. 1 (1)
COMPLAINT OR DISAGREEMENT CONTROL

No. Requirement Description
1 Agency that received the complaint or disagreement Name of the agency, branch, office, or unit that received the complaint or disagreement.
2 Control Number
Tracking or control number assigned by the entity to reference the complaint or disagreement.
3 Date of complaint or disagreement
Date on which the insured, policyholder, or beneficiary presented the complaint or disagreement to the entity.
4 Name of user or client
Name of the user or client presenting the complaint or disagreement.
5 Nationality of user or client
Nationality of the user or client presenting the complaint or disagreement.
6 Type of person
Whether the person presenting the complaint or disagreement 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 disagreement
Code of the reason for the complaint or disagreement according to Annex No. 2.
10 Status of complaint or disagreement
Status in which the complaint or disagreement is found: in process or completed.
11 Resolution Result
Result of the resolution of the complaint or disagreement: favorable, unfavorable, or withdrawn by the client.
12 Date of resolution
Date on which the complaint or disagreement was resolved.
13 Name of the unit
Name of the unit responsible in the entity for attending the complaint or disagreement.
14 Operational risk generating factors
Operational risk generating factors.

No. Requirement Description
13 Name of the unit
Name of the unit responsible in the entity for attending the complaint or disagreement.
14 Operational risk generating factors
Operational risk generating factors.

Annex No. 2 (1)

CODE OF REASONS FOR COMPLAINTS OR DISAGREEMENTS

Code Detail of Reasons for Complaints or Disagreements 1 Problems with contract clauses, policies, conditions, agreements 2 Problems referred to claims presented 3 Lack of information about the contracted insurance 4 Time of payment of indemnification 5 Rejection for uncovered claim 6 Disagreement with the amount of indemnification 7 Disagreement with the conditions of the insurance policy 8 Disagreement with the assignment of benefits 9 Cancellation of the insurance policy 10 Rejection for omissions or false declarations 11 Rejection for claim outside the insurance validity period 12 Non-delivery of insurance policy 13 Non-delivery of requested endorsement or annex 14 Disagreement with the premium amount 15 Disagreement 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 18 Related to charges 20 Related to provider network 21 Reconsiderations presented 22 Other reasons

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