Answers to Common Questions About Colombia’s Insurance Regulations and Rules
In this report, Asinta’s employee benefits consulting Partner in Colombia, Correcol, explains insurance regulations that often raise questions for multinational companies with interests in the country.
Questions and answers pertinent to employee benefits in the report are two-fold.
1. What happens if there is a delay in the payment of insurance premiums?
The terms for premium payment in accordance with Colombian regulations is one month from the policy delivery date or, if applicable, delivery of issued certificates or endorsements based on it (Article 1066 of the Commercial Code).
However, Article 1068 of the Commercial Code establishes that the delay in the payment of the policy premium or of the certificates or endorsements that are issued based on it will produce the automatic termination of the contract and will give the insurer the right to demand the payment of the accrued premium and the expenses caused by the issuance of the contract.
Based on this rule, even when the local insurer has not expressly canceled or revoked the insurance by means of an endorsement or certificate, it is argued that the insurance is legally understood to be terminated, which may mean response problems in the event of a claim.
2.What are the guidelines regarding electronic invoicing of insurance policies?
Recently, the Ministerio de Hacienda (Ministry of Finance) and the tax authority of Colombia issued regulations regarding policy invoicing, which basically establishes that the insurance policy is no longer a document equivalent to an invoice. Instead, the insurers will issue an electronic invoice, which serves as the basis for premium payment. This change unifies the insurance sector’s electronic sales invoice process.
Correcol, Asinta’s employee benefits consulting Partner in Colombia, provided this article about Colombia’s insurance regulations.