The Argentinean authorities recently fined an individual insured 8 times premium and an insurance intermediary 15 times premium for illegally transacting life insurance business with a non-authorized foreign life insurer.
Argentinean law provides that property and persons located in Argentina must be insured through an insurance policy issued in Argentina by an insurance company authorized to carry on insurance business in the country. In the event that these requirements are not met, the authorities may impose a fine up to 25 times premium upon each of the insured and the insurance intermediary and a fine up to $100,000 against the insurance company (directors and officers and other responsible persons may be held jointly liable for these fines), and the insurance policy will be considered null and void and unenforceable under Argentinean law (directors and officers and other responsible persons may also be held jointly liable for any damages due to the nullity).
This most recent fine underscores that foreign companies presented with an opportunity to broke or underwrite a risk located in Argentina (or elsewhere in Latin America) need to first understand and ensure compliance with local regulatory requirements before participating in any such insurance activity.
If you would be interested in learning more about the Argentinean and/or other Latin American (re)insurance markets and/or regulatory environments, please contact Mach Millett at Edwards Angell Palmer & Dodge.
© Copyright 2009 by Edwards Angell Palmer and Dodge LLP. All rights reserved. Reprinted with permission. This blog originally appeared on the
InsureReinsure Blog. The InsureReinsure Blog is one of the Insurance Law Center’s Top 50 Insurance Blogs for 2009. The Top 50 Insurance Blogs may be found
here.