On July 4, 2024, the Financial Policy and Regulation Board, through resolution No. JPRF-S-2024-0116, amended the Standard for the Promotion and Contracting of Insurance Policies and Prepaid Comprehensive Health Care Plans through Alternative Distribution Channels. These reforms introduce significant changes to certain obligations of insurance and prepaid medicine companies when marketing their products through Alternative Distribution Channels.
EXTENSION IN THE GLOSSARY OF DEFINITIONS OF THE STANDARD:
It is important to highlight a significant change to the definition given by the standard to the term “Banca Seguros”. This concept refers to financial sector entities that, in addition to their main activity, can participate as Alternative Distribution Channels for insurance and prepaid medicine companies. It was added to the concept, that the commercialization of insurance products and/or prepaid medicine can be carried out through all their physical and digital channels, thus explicitly allowing the implementation of digital marketing models for insurance products or prepaid medicine contracts.
OBLIGATION TO TRAIN THE PERSONNEL OF THE ALTERNATIVE DISTRIBUTION CHANNEL:
The obligation of insurance and prepaid medicine companies to train the personnel of the Alternative Distribution Channels has been modified so that, from the reform onward, it shall be carried out permanently. Furthermore, insurance and prepaid medicine companies are now required to annually report to the Superintendence of Companies, Securities, and Insurance on the training programs conducted to protect users. It is noteworthy that this activity can be delegated to Insurance Producers’ Advisors (brokers) who are part of the contract.
PREPARATION OF GUIDES FOR THE USER – PREPAID MEDICINE COMPANIES:
The resolution of the Financial Policy and Regulation Board incorporated an unnumbered article following article 10 of the regulatory body in question. This article includes the obligation for Alternative Distribution Channels that market prepaid comprehensive health care service contracts to provide a user guide along with the Individual Coverage Certificate. This guide must clearly and briefly explain certain key aspects of the prepaid medicine contract, including covered risks, exclusions, waiting periods, coverage request deadlines, among others.
Additionally, this unnumbered article allows referring to the contract itself in the form of quotes or references if the breadth of the information warrants it. If the Superintendence verifies that sections of the guide modify what is established in the contract, this regulatory body will proceed with its sanctioning powers in accordance with the Organic Law that Regulates Companies Financing Comprehensive Health Care Services and Insurance Companies Offering Medical Assistance Coverage.
GENERAL AND TRANSITIONAL PROVISIONS:
General Provision Five is incorporated, establishing the minimum content that the report of information on Alternative Distribution Channels that market insurance products or prepaid comprehensive health care service plans must include. This includes the Unique Taxpayer Registry (RUC for its Spanish initials) of the Alternative Distribution Channel, its corporate purpose, company name, legal representative or attorney, among others.
In the Sole Transitional Provision, it is established that the Superintendence of Companies, Securities, and Insurance will inform within a maximum period of 6 months the format of the reports, their structure and content, the frequency of delivery, the manner of delivery by the companies, and any important aspect considered by the authority.
It should be noted that these reforms came into effect from the signing of the resolution on July 4, 2024, notwithstanding their publication in Official Register No. 602 on July 17, 2024.
For more information, contact us at the following email address:
Dr. Mariana Villagómez – mvillagomez@bustamantefabara.com