Law Of Insurance Of Deposits For Entities And Public Enterprises And Fund For The Protection Of The Insured.

Original Language Title: LEY DE SEGURO DE FIANZAS PARA ENTIDADES Y EMPRESAS PÚBLICAS Y FONDO DE PROTECCIÓN DEL ASEGURADO.

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law no 365

APRIL 23, 2013 LAW

EVO MORALES AYMA

CONSTITUTIONAL PRESIDENT OF THE PLURINATIONAL STATE OF BOLIVIA

For the Plurinational Legislative Assembly, it has Sanctioned the following Act:

THE PLURINATIONAL LEGISLATIVE ASSEMBLY,

D E C R E T A:

TRUST INSURANCE LAW FOR ENTITIES AND COMPANIES

PUBLIC AND FUND OF PROTECTION OF THE INSURED

Article 1. (OBJECT). This Law aims to establish the characteristics of the insurance policies of

bonds, in which the beneficiaries participate as beneficiaries and public companies and companies in which the State has shareholding majority; create the Secured Protection Fund, as well as amend Law No. 1883 of June 25, 1998, Insurance Law, and the Code of Commerce.

Article 2. (SCOPE). The scope of this Law, it reaches the insurance entities

legally established and authorized to operate in general, and in particular to insurance policies of sureties, whether of course or of credit, issued by entities legally established in the Plurinational State of Bolivia, which aim to guarantee the hiring of goods and services made by public entities, public companies and companies in which the State has majority shareholding, henceforth public sector entities.

Article 3. (SECURITIES INSURANCE FOR PUBLIC SECTOR ENTITIES).

I. It is the insurance mode, recognized in the Insurance Act, which includes insurance and credit insurance, applied to

public sector entities, on whose policy you subscribe to an insurance institution authorized to manage insurance general or created with that sole object, it acts as the guarantor of a natural or legal person, which for the effect is called an entrenzado, obliging itself to fulfill the provision stipulated in the contract of insurance in favor of entities of the field public, which constitute the beneficiary, in the event of non-compliance with the an established obligation.

II. The insurance policies for securities for public sector entities are irrevocable, implementing at first requirement,

renewable, unique and uniform texts, prepared and approved by the Authority Fiscalization and Control of

Pensions and Insurance, the terms and conditions of which may not be modified by any of the intervening parties. The insurance entities authorized to operate with this insurance mode must issue the corresponding policies with the support of counter-guarantees following criteria of prudence.

In case of extension of the contract for which it was issued The Policy of Insurance of Fiance as collateral, or other situation that implies the need to extend the period initially agreed, the validity of the Policy of Insurance of the Fianza shall be automatically extended by the insurance institution.

Article 4. (RUNNING).

I. The execution of the insurance policies of bonds in which entities of the public sector participate as beneficiaries, is

a private right of the beneficiary entities that will be exercised with the sole and exclusive presentation of the original copy or legalised copy of the statement of default, issued and signed by the relevant person or the Maximum Executive Authority-MAE, of the beneficiary entity.

II. For the purposes of the In the case of insurance against insurance against the right to invest in advance, the perform

on the part not invested or unduly invested and not resarised by the entrenzado, in this case the beneficiary entity will present additionally to the document indicated in the previous paragraph, the? Report of Saldos to Favor and Against?, prepared by the same beneficiary entity.

III. The insurance entity shall make effective the indemnity of the bail insurance policies in which they participate

public, within the maximum period of fifteen (15) calendar days from the receipt of the document (s) indicated in the preceding paragraphs of this Article. No circumstance, requirement of information or documentation other than that established in this Law, or controversy between the parties involved in a Policy of Insurance of Fianza, in which a beneficiary of the public sector, shall condition or be a cause of delay or suspension of payment of the corresponding compensation.

IV. The determination and documents that support the execution of the insurance policies of sureties, object of this Law,

is the responsibility of the server or the server and the public servants to the guarantor and to the the competent authorities. Acts or acts arising from the inconsistent or incorrect execution of these policies shall be subject to the respective legal responsibilities.

Article 5. (DENIAL OR NON-PAYMENT OF COMPENSATION).

I. Fulfilled the formalities laid down in this Law, for the execution of insurance policies of sureties, the negation or non-payment of compensation by the insurance institution within the prescribed period, shall determine the registration of the operation as? sinister in arrears? and the establishment of special reserves that the Pension and Insurance Control and Control Authority shall establish by regulation, without prejudice to other appropriate measures.

II. The Authority for Taxation and Control Pensions and Insurance, to the complaint of the beneficiary entity or to instance

own, will verify the facts and in its case will initiate the corresponding process of sanctioning for non-compliance in the payment of the compensation. This process will not support deliberation regarding the main contract between the entrench and beneficiary.

Article 6. (TRANSPARENCY OF INFORMATION).

I. The insurance entity to which the execution of a Fianza Insurance Policy is requested to participate as

would benefit a public sector entity, will have unrestricted access to all the information in the process it gave place to the execution request. The public servant who denies this access will be subject to the corresponding sanctioning process, and may be punished with the removal of the charge, without prejudice to the prosecution of the duties.

II. In no case shall the execution of the policies be delayed or conditional upon the delivery of any kind of

information or document other than those specifically named in this Law.

Article 7. (DISPUTES AND ARBITRATION CLAUSE).

I. The insurance company that as a result of the execution of the Insurance Policy of the Fianza indemnifies the entity

would benefit and consider to its judgment that there are controversial aspects of fact or of the right not resolved, it will be able to appeal the dispute settlement process governed by Law No 1770 of 10 March 1997, Arbitration and Conciliation Act, in application of the arbitration clause to be stipulated by the Insurance Policy of Fianza.

II. any dispute, shall not affect or delay at any time or for any circumstance the

payment of compensation to the beneficiary in the time stipulated in this Law.

III. In case the Arbitral Award is favorable to the insurance institution, the insurer has the right to the court.

corresponding for this instance to pursue the respective resarment.

Article 8. (SUBROGATION OF RIGHTS TO THE INSURANCE INSTITUTION). The payment made by the emerging guarantor of the implementation of the Policy Insurance Policy for public sector entities, activates in its favor the subrogation of rights of the beneficiary entity in front of the consolidated as a signed probative document, without prejudice to the actions that it may follow to execute the counter-guarantees constituted in its favor.

Article 9. (INSURANCE FUND OF THE INSURED).

I. Create the Insurance Fund-FPA, as a public legal person, of duration

indefinite, not subject to Law No 1178 of 20 July 1990, in order to support financially transactions for the sale of direct portfolio and for the payment of insurance institutions in the process of intervention for the forced liquidation by the Pension and Insurance Control and Control Authority, as established by Law No 1883 of 25 of June 1998, Insurance Act, and other related regulations.

II. The FPA may support The financial support of the Bank of the European Union is a financial instrument for the financial support of the Bank for the financial year of the financial year of the financial year. does not exceed 30% (30%) of the required investment resources of the insurance institution that is involved, according to the final financial statements of intervention, subrogating the corresponding rights against the insurance undertaking ? in liquidation?.

III. The FPA will be able to financially support direct portfolio disposal operations and to pay for insurance entities

intervened by the Pension and Insurance Control and Control Authority, as of January 1, 2007. 2018.

IV. The resources of the FPA will be constituted by contributions from the insurance entities, legally authorized to operate

in Bolivia. The contributions of the insurance or general insurance insurance institutions shall be effected at the rate of five per thousand (5?) quarterly of the net direct production value of cancellations. The contributions of the insurance insurance entities of persons, shall be effected at the rate of two point five per thousand (2.5?) quarterly, calculated on the value of the net direct production of cancellations.

V. In all cases the contributions will be considered as expenses by the insurance entities.

VI. The contributions shall be paid to an account of the Central Bank of Bolivia-BCB, up to the 15th of each month

following the expired quarter or the business day next, under default for default in case of default.

VII. The FPA will have as its management and decision body a board of three (3) unpaid representatives, designated one by the Ministry of Economy and Public Finance, one by the BCB and one by the Authority of Taxation and Supervision of Pensions and Insurance. In addition, it will have two non-interest-bearing syndicates, one of them designated by the insurance insurance companies general and the other by the insurance insurance entities of persons. They may not be appointed as members of the board or trustees, those disabled by law ministry, to exercise commerce; those who have self-processing or a conviction for the commission of common crimes; debtors in arrears to the financial system which have credit for execution or credit punished; those that have been declared, in accordance with procedures

legal, guilty of economic crimes in public functions, against the financial order or in the administration of financial institutions; those responsible for bankruptcy, by fault or dolo, in societies in general and entities of the system (a) financial aid; those who have been disqualified from holding current accounts; and those who are expressly prohibited by Article 47 of Law No 1670 of 31 October 1995, Law of the Central Bank of Bolivia, with the exception of points (b) and (c). The command of the syndicates will be two (2) years.

VIII. The resources of the FPA will be managed by the BCB, making investments analogous to the ones made

by the Fund for the Requirement of Liquid Assets-RAL Fund. Yields will be capitalized. The management fee will be paid to the BCB from the FPA resources, by automatic debits.

IX. When the contributions made by an insurance institution have reached the sum of twenty per cent (20%) of the total eligible and non-eligible investments recorded in their respective financial statements, the FPA Board may temporarily exempt the insurance institution from the payment of the contributions, considering the conditions prevailing in the sector and the economy in general, provided that the resources of the FPA do not are committed to intervention processes.

ADDITIONAL PROVISIONS

FIRST. Law No. 1883 of 25 June 1998, Insurance Law, is amended in accordance with the following paragraphs:

I. The definition of the Insurance of Caution set out in Article 5 is amended, with the following text:

? SECURE SECURE. This is the one for which the insurer is obliged, in the event of non-compliance by the policyholder (entrenzado) of its legal or contractual obligations to indemnify the beneficiary in respect of compensation or penalty, the property damage suffered within the limits laid down in the Law or in the contract. Any payment made by the insurer must be reimbursed by the policyholder to which the insurer must obtain sufficient counter-guarantees. The Insurance of Caution guarantees contractual obligations characterized by making, performing, constructing, supplying or providing a service. ?

II. The Credit Insurance definition set in Article 5 is modified, with the following text:

? CREDIT INSURANCE. It is the one by which the insurer is obliged to pay the creditor compensation for the final net losses suffered as a result of the debtor's insolvency (entrench), the characteristics of which are defined in Articles 1106 to 1108 of the Code of Commerce. Any payment made by the insurer grants the right of repetition against the debtor. Credit insurance guarantees contractual payment and/or financial obligations in general by the firm.?

III. The following is incorporated into Article 18 as the last paragraph:

?The registration of Foreign Mathematical Actuaria Companies, of recognized international trajectory, is authorized according to regulation.?

IV. Article 24 is amended, with the following text:

Article 24. BAN. Insurance and reinsurance brokers are prohibited from taking risks on their own account or collecting premiums. They may charge premiums only where they are authorised by express provision of the insurer or the reinsurer where appropriate.

V. It is incorporated immediately before the last paragraph of Article 30, the following:

?The Special Technical Reserve is established by risk of technical rate, to be constituted by the insurance entities that administer (a) the provision of pre-viewing insurance, equivalent to eight per cent (8%) of capital invested in housing construction and financed by profits from such investments. This technical reserve shall be invested in securities of public offering, shall be of a permanent nature until the termination of the pension, cumulative and exceptionally may be released in part with the express authorization of the Authority For the purpose of the assessment of the risks by which material deviations are present.?

VI. Is incorporated into Article 34 as the last paragraph, the following:

?The investments referred to in this Chapter, from the solvency margin, technical reserves and retention to the reinsurers, are Non-embargables, unless they are at the request of the Pension and Insurance Control and Control Authority, in application of the provisions of Articles 47, 48, 49, 50 and 51 of this Law.?

VII. Is incorporated following the last paragraph of Article 35, the following:

?Insurance insurance entities are authorized to manage pre-viewing insurance, invest in housing construction not suntuary up to a maximum equivalent to 25% (25%) of the value of its technical reserves constituted for these risks. ?

VIII. Is incorporated into Article 39 as the last paragraph, the following:

?The Pension and Insurance Control and Control Authority will be able to serve as a reconciliation instance, for any disaster whose amount does not exceed the amount of UFV100,000.00.-(One hundred thousand 00/100 Housing Development Units). If there is no agreement on this route, the Pension and Insurance Control and Control Authority, you will be able to know and resolve the controversy by duly motivated administrative resolution

IX. The following points are incorporated into Article 43:

? v) Act as a reconciliation entity in claims not exceeding UFV100,000.00.-(One hundred thousand 00/100 Housing Development Units). and if applicable, resolve the dispute by means of a reasoned administrative decision.

w) By court order and, where appropriate, with the assistance of the public force, take physical possession and seal all the facilities of the natural or legal persons who incur the prohibition of Article 2 of this Law. ?

SECOND. The Trade Code is modified according to the following paragraphs:

I. The text of Article 1018 is replaced, with the following:

? Article 1018. (The premiums in damage insurance). For damage insurance, whether the policy delivery or

interim coverage certificate is performed

without the perception of the premium, the granting of credit with interest on its amount is presumed.

If the payment of the premium is partial, the granting of credit with interest for the balance is presumed.

Otherwise, the default in the payment of the premium plus interest, within the time limits

fixed, suspends the term of the contract.

Suspended the validity of the policy, the insurer is entitled with force executive at premium

corresponding to the run period, calculated to prorrata.?

II. The text of Article 1033 is replaced, with the following:

? Article 1033. (Deadline for opinion). The insurer must rule on the right of the

insured or beneficiary within thirty (30) days of receipt of the information and evidence cited in Article 1031. A written record of the date of receipt of the information and evidence will be left to the effect of the term's computation.

The period of thirty (30) days mentioned, it becomes a phenomenon with the acceptance or rejection of the claim or with the application

of the insurer to the insured that the requirements referred to in Article 1031 are supplemented and does not run again until the insured has met such requirements.

The application for add-ons established in the Article 1031, by the insurer may not

extend by more than two times from the first request for reports and evidence, and must decide within the prescribed period and in a definitive manner on the right of the insured, after the delivery by the insured of the last requirement of information.

The silence of the insurer, expired the term to rule or beat the requests of

complementation, imports the acceptance of the claim.?

FINAL PROVISIONS

FIRST. In any text of Law No. 1883 of June 25, 1998, Insurance Law, where indicates

? Superintendence of Pensions Securities and Insurance?, is modified by? Authority for Taxation and Control of Pensions and Insurance? Similarly, the acronym is modified? SPVS? by? APS?.

SECOND. This Law shall be regulated by the Executive Body or the Pensions and Insurance Control and Control Authority

.

REPEAL PROVISION

ONLY. Article 46 of Law No. 1883 of June 25, 1998, Insurance Act, is repealed.

OPENING disposition

ONLY. All provisions are abrogated and repealed. contrary to this Law.

Remitase to the Executive Body for constitutional purposes.

It is given in the Session Room of the Plurinational Legislative Assembly, at the eighteen days of April of the

year two thousand thirteen.

Fdo. Lilly Gabriela Montano Viana, Betty Asunta Tejada Soruco, Andres Agustín Villca Daza, Claudia Jimena

Torres Chavez, Marcelo William Elio Chavez, Angel David Cortez Villegas.

Therefore, I enact it so that it is as Law of the Plurinational State of Bolivia.

Palace of Government of the city of La Paz, at the twenty-three days of the month of April of the year two thousand thirteen.

FDO. EVO MORALES AYMA, Juan Ramon Quintana Taborga, Luis Alberto Arce Catacora, Ana Teresa

Morales Olivera, Amanda Davila Torres.