Hannah Grant
Lloyd’s
As of 15 November 2007, Lloyd’s underwriters are approved to transact international marine, commercial aviation and goods in transit insurance in Chile. Alongside the liberalisation of the Brazilian reinsurance market, this expands opportunities available to Lloyd’s underwriters in South America.
The Autumn 2007 edition of Worldwide Compliance Newsletter reported on international trade talks and suggested that their successful conclusion could bring benefits to Lloyd’s underwriters. This new authorisation is an example of how trade negotiations can improve access to national markets; the Chilean regulation under which the authorisation was granted is a direct consequence of the EU-Chile Association Agreement that came into force in 2003. The reciprocal elimination of barriers to trade agreed by the parties included a commitment by the Chilean Government to improve access to Chilean international marine, aviation and goods in transit insurance.
Subsequently, the Chilean insurance supervisor, Superintendencia de Valores y Seguros (SVS), enacted Regulation No. 197 of 26 May 2006.
Impact upon Lloyd’s trading rights
Before the enactment of Regulation 197, a Chilean citizen or company was free to buy insurance from a foreign insurer. However, foreign insurers and intermediaries were not allowed to sell or intermediate direct business within Chile.
Regulation 197 allows insurers and brokers established in countries that are party to the agreement to offer and sell direct insurance in Chile, covering:
International marine transport
International commercial aviation
Goods in international transit
Insurance contracts covered by this Regulation include hull and liability insurance for aircraft and ships used internationally. Insurance covering civil liability for the transportation of passengers and loan insurance are not included.
Policy requirements
As an ‘approved foreign insurer’ Lloyd’s has been allocated the registration code AS002. This code must be included in the ‘information’ section of a Market Reform Contract for every placement of a Chilean risk that falls under the regulation.
Such insurance contracts may be in English and the parties to the contract are free to choose the law and jurisdiction applicable.
Lloyd’s underwriters can nominate Lloyd’s Attorney-in-Fact, Emilio Sahurie Luer, for service of suit. If they nominate a different individual, they must arrange for Lloyd’s Attorney-in-Fact to lodge a Power of Attorney giving the individual appropriate powers with the SVS.
The classes of business mentioned in Regulation 197 are exempt from the Chilean offshore tax of 22%.
Lloyd’s is not at present required to file any reports relating to this business with the SVS.
Additional information
Lloyd’s Market Intelligence Team has recently produced a new brief on Chile, providing information about its business and insurance environment. This document is available to Lloyd’s managing agents, who can download it from: www.lloyds.com/MarketIntelligence
Contact
Lloyd's International Trading Advice on +44 (0)20 7327 6677 or LITA@lloyds.com for more information.
