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The Chilean finance ministry will send a bill to congress with the aim of updating the country's insurance contract law as part of the legislative agenda regarding a capital markets reform package known as MKB.
There is a bill on insurance contracts that has been dormant in congress since 1990, the ministry said in a press release. The current law governing insurance contracts has been in place since 1865, a time at which the only recognized insurance coverage was for life, maritime and transportation.
The new bill contains three parts. The first will regulate all general rules applicable to insurance contracts, while the second part refers to damage-related insurance, such as fire, theft, civil liability and credit insurance among others. Finally, the third part refers to policies for individuals, such as life, health, permanent life and survival insurance, among others.
"This initiative will provide the legal backbone to insurance contracts, which in turn gives judicial certitude to the [insurance] market that grows every day," said Pablo Correa, the finance ministry's MKB coordinator.