Insurance watch: new CenAm federation; Mexico complaints soar

Central America insurers launch regional entity

Central America's key insurer associations have agreed to create a joint entity to coordinate and improve client services across the region.

Announced at the recent Pan-American Congress of Insurance Producers in San José, Costa Rica, the new body will be named Federation of Central American Insurance Intermediary Associations.

Founding members are associations from Guatemala, Honduras, El Salvador, Nicaragua and Costa Rica.

Jorge Guillén, president of Salvadoran insurer association ASPROS, said the new alliance – a product of the Central American Cooperation Agreement – would bolster the regional market as well as offering training for agents.

"One of the next steps will be to incorporate representation from Panama," said Guillén. He added that a central benefit to the federation would be to facilitate cross-border service. "For example, if an insurance company in El Salvador has a client in Costa Rica, the association could assist that client. The same applies for the rest of the countries."

Guillén sees such coordination as the first phase (potentially finished in more month month) of the federation's creation.

Mexican insurer complaints soar

Mexican financial consumer watchdog Condusef has issued 260 sanctions to the insurance sector with fines totaling 7.7mn pesos (US$409,000) in 2017.

According to the latest update from the agency's of financial institutions bureau, the number of fines was 69% higher than in 2016, while the total fines set increased 93% year-on-year.

The increase was tied to the introduction of a new financial services consumer law, the Condusef report noted, while the higher amounts for fines related to an more licensed creditors under supervision.

The report showed Seguros BBVA Bancomer went from nine sanctions in 2016 to 34 the following year; GNP Seguros was ordered to pay 26 fines in 2017, but only seven in 2016. Meanwhile, Seguros Banorte went from four sanctions in 2016 to 23 last year.

Condusef said 48% of the sanctions in 2017 applied to six companies: BBVA Bancomer Insurance, GNP Seguros, Banorte Insurance, Metlife Mexico, Argos Insurance and Atlas Insurance.

The bureau stated that last year 42,951 complaints against the industry were filed, 15% more than in 2016.

Of the total claims, 16,984 were caused by the refusal to pay compensation; 7,373 were for untimely payouts; 3,614 for cancellation of contract or policy not immediately attended; and 14,930 related to unspecified reasons.