Insurance Law.

Original Language Title: LEY DE SEGUROS.

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Law N ° 1883 law of 25 June 1998 HUGO BANZER Suárez President of the Republic because the Honorable National Congress, has sanctioned the following law: the HONORABLE National Congress, D E C R E T A: insurance law of the Republic of BOLIVIA title I provisions General Chapter I field of application article 1.-field of application-the scope of application of this law includes activities take third-party risks and grant coverage insurance generally, prepayment of services similar to insurance, as well as intermediation services and auxiliary activities, by corporations expressly incorporated and authorized for this purpose by the Superintendency of pension, securities and insurance. Also standard the operation and control of them entities that made them activities indicated previously, the protection to them insured, takers and beneficiaries of safe and them powers of the Superintendent. The rules concerning insurance, understand equally applicable to any form of insurance and reinsurance activity. ARTICLE 2.-BAN. No person, natural or legal may the activities indicated in the previous article, without prior authorization of incorporation and operation granted by the Superintendent, with the formalities and requirements established by this Act, its regulations and without prejudice as provided in article 55.
Article 3.-mandatory LA recruitment of insurance and of withholding in BOLIVIA-the natural or legal persons who hire safe, domiciled in Bolivia are obliged to take insurance in the country with insurance companies incorporated and authorized to operate in the territory of the Republic.
Also, the entities insurance, must perform the retention of maximum a fifteen percent (15%) of the margin of solvency by risk individual and of minimum a thirty percent (30%) on the total of raw subscribed. ARTICLE 4.-OBJECTIVES. This Act and its regulations are intended regular activity insurance, reinsurance, intermediates, auxiliary and prepaid entities so that they have sufficient credibility, solvency and transparency, ensuring a competitive market. Also specifies the rights and duties of the insurance entities and establishes the principles of equality and legal certainty for the protection of insured persons, policyholders and beneficiaries of insurance. Article 5.-definitions.-for the purposes of this Act, establish the following definitions with character and not limited to: insurance activity: comprises the provision of coverage and assumption of risks of natural or legal persons, including the own insurance entities and all other service that involves covering risks and the prepayment of services similar to insurance.
ACCIDENT: Act or fact that derives from a violent, sudden, external, involuntary, cause that damage people or things. INSURANCE agent: He is the natural person linked to an insurance company, through a contract, which is dedicated to intermediation and the commercial management of insurance contracts. VENTURE CAPITAL: Is the sum of the amounts secured directly in life, more amounts of reinsurance accepted by this same concept, less the respective mathematical reserves.
Broker: It is the legal entity that performs the business of intermediating in private insurance without maintaining contractual relationship with any insurance company. REINSURANCE Broker: It is the legal person acting as an intermediary in the hiring of reinsurance coverage without maintaining contractual relationship with any insurance or reinsurance entity. INSURANCE company: It is the Corporation's unique twist on insurance administration, authorized by the Superintendency. It includes the direct insurance companies, the reinsurance companies and entities of prepaid. REINSURANCE entity: It is the entity that accepts from another insurance company risks or a set of them, assuming liability to the transferor by the same.
PREPAID entity: It is the entity that agrees to provide a service for people who randomly may require it, against payment of an advance fee.
FACTOR of calculation: is the numerical index from an estimate of the level of risk of the insurance entities, which limits the level of risk for the purpose of economic increases. SOLVENCY margin: It is the heritage of the insurance entity calculated for insurance long term in relation to mathematical reserves and capital at risk and insurance of short-term, in relation to the annual volume of premiums or coverage of claims.
SOLVENCY margin based on reserves math: is the result of multiplying factor for calculating the mathematical reserve total mathematical reserves, by mathematical retention factor. SOLVENCY margin based on risk CAPITAL: It is the result of multiplying factor calculation of risk capital by risk capital, by the retention of venture capital factor.
INSURANCE policy: Document that it implements the insurance contract, which establishes the rules governing the contractual relationship between the insured and insurer, as determined in the code of Commerce in general and particular way.
AVERAGE claims totals: Adds value of losses incurred by direct insurance, more the value of claims incurred by reinsurances accepted the last three (3) years of an insurance company, divided between three (3). REINSURANCE: Instrument technical financial that an insurance company uses to diversify the risks in its portfolio of insured goods, through the transfer of part or all of them to another or other insurance companies or reinsurance, through a contract regulated by the Arts. 1015 and 1016 of the commercial code.
RESOURCES for investment: Are the resources representing technical reserves, solvency and withholding allowances to reinsurers. RESERVE mathematics TOTAL: Is the sum of the mathematical reserves of direct insurance, more mathematical reserves of reinsurances accepted an insurance entity.
TECHNICAL reserves: It is the value of liabilities emerging from the operations of insurance and reinsurance entities are obliged to form and maintain permanently using preset calculation procedures.
SAFE: is the contract by which the insurance is requires to indemnify a damage or to meet the provision agreed, to the produce is the event planned, and the insured or taker to pay it prima. DIRECT insurance: They are the agreed upon by an insurance company with a person, natural or legal entity. ACCIDENT insurance: Is he who protects individuals against risks affecting their physical integrity, emerging from violent, sudden and fortuitous events and fail to understand those from diseases. SURETY insurance: Is that whereby the insurer undertakes in case of default by the policyholder of its legal or contractual obligations (entrenched) to indemnify the insured by way of redress or penalty, the patrimonial damage suffered within the limits laid down in the law or the contract. All payment made by the insurer should be reimbursed by the policyholder to which the insurer must obtain sufficient guarantees.
CREDIT insurance: Is that whereby the insurer undertakes to pay to the creditor compensation for definitive net losses sustained as a result of the insolvency of the debtor (entrenched) whose characteristics are defined in the Arts; 1106 at 1108 of the code of Commerce. All payment made by the insurer should be reimbursed by the policyholder to which the insurer must obtain sufficient guarantees.
SHORT term insurance: Are understood as such to insurance concluded for a specific period of time. For the purposes of this law, are the safe bonds, health insurance and general insurance, personal accident insurance.
LONG-term insurance: For the purposes of this Act, they are life insurance in general. INSURANCE: They are those who are subject to the natural person, becoming dependent on payment of the agreed provision of their existence, their health or their integrity. For the purposes of this law, life insurance, annuities, the accidents and health are understood as such. HEALTH insurance: Are those covering the services of medical, surgical, pharmaceutical and hospitalization in health centres. LIFE insurance: Are those covering the risks affecting the existence of natural persons. General Insurance: Are those covering the risks that indirectly affect directly or assets or the assets of natural or legal persons. It means such, all those who are not people and surety insurance.
COMPULSORY insurance: Are those established by the State through legislation, on a mandatory basis. INSURANCE social security: For the purposes of the present law, means such annuity insurance, insurance of invalidity and death established by law 1732 of 29 November 1996 professional and common risk (Social insurance).

VOLUNTARY insurance: Are those hired by voluntary decision to natural or legal persons. SINISTER: Occurs when happens the eventuality envisaged and covered by the insurance contract and that it leads to compensation, forcing the insurer to meet fully or partially entity, to the insured or beneficiaries, the capital guaranteed in the contract.
SOLVENCY based on premiums: It is the result of multiplying factor calculation of premiums by the total of premiums subscribed for by an insurance company and this result by the retention factor. SOLVENCY based on claims: It is the result of multiplying factor calculation based on claims by an insurance company claims total average, by the retention factor. Superintendent: The Superintendent of pensions, values, and insurance of the Republic of Bolivia. TECHNICAL rate: This is the raw material sufficient to cover expected losses.
TOTAL premiums: Is the sum of the premiums subscribed directly by an insurance or reinsurance entity, more premiums subscribed by reinsurances accepted in the last twelve (12) months article 6.-types of insurance-the insurance arrangements permitted by the present law, are three: people insurance, general insurance and surety insurance. The operation of the insurance of people is exclusive with respect to General insurance and surety. The insurance companies with the modality of general insurance may administer health and accident insurance.
The pension insurance shall be administered exclusively by insurance companies administering insurance. Prepaid entities may only perform the services established by this law for this activity, authorization of the Superintendency. This service will be operated by the insurance of insurance entities or corporations constituted for this exclusive purpose.
Surety insurance may be managed by entities that administer general insurance, or entities created for this sole purpose. Surety insurance will be subject to a special regulation with regard to its operating mechanism.
Deposit insurance are divided into credit insurance and surety insurance. The guarantees demanded by public or private institutions for the fulfillment of the obligations of its operations, may exploit them through deposit insurance. The insurance companies will have as only limitation for the subscription of this type of insurance, having sufficient guarantees and adequate reinsurance backing. Title II of the activity insurance chapter I entities insurance and REINSURANCE article 7-provisions General.-the activity insurance and re-insurance, pursuant to this law, can only be accomplished by corporations constituted and regulated as determined in chapter V, title III, the first book of the commercial code. Insurance and reinsurance entities must have unique and specific social object people insurance or general insurance and comply with the solvency and investment requirements established in this Act and its regulations.
Transformation, merger and liquidation of insurance and reinsurance entities as well as the transfer of portfolio and its acceptance, requires authorization of the Superintendent. Article 8.-requirements for the Constitution of entities insurance and REINSURANCE.-the people legal, national or foreign that wish to constitute an entity insurance or reinsurance, must present to the Superintendency them following requirements minimum: study of feasibility technical economic and financial, or plan of business.
Articles of incorporation of the Corporation and statutes project.
Document of background personal issued by authority public, national or foreign, when appropriate, that certify the solvency tax and Declaration heritage of goods.
Public social Constitution, registration in the trade register or corresponding documents audited balance opening, list of its Board or governing body equivalent of legal persons involved, which must also conform to the provisions of title III, chapter V of the code of Commerce and regulations.
Individual contracts for subscription of shares.
Them companies foreign may constitute entities insurance in the territory national, and must meet the same requirements that them entities national, as well as also it willing in them Articles 413 to the 423 of the code of trade.
The form of presentation of the above requirements will be established by the Superintendent, by express legislation. The Superintendent may approve or reject the Constitution by resolution founded in one period not exceeding ninety (90) days from the date of the submission of all requirements that referred to in this article, and must imperatively publish in a newspaper of national circulation application of Constitution during at least three discontinuous days by giving thirty (30) days to file oppositions if it is that you any. Article 9.-limitations to the participation corporate-may not be partners of insurance or reinsurance companies, entities, natural persons who: are disabled according to the commercial code, to carry out commercial activities.
To have conviction and sentence rendered for the Commission of crimes.
They had been found responsible for failures by negligence or willful misconduct.
Perform as directors or managers of State financial institutions.
They had bonding as shareholders in companies referred to in this law and who have been forcibly settled by the Superintendency of pension, securities and insurance.
Article 10.-requirements to obtain operating license-once issued the resolution of approval of Constitution, to obtain the authorization of operation, the Corporation must comply with the following requirements: subscribe and pay in currency of legal tender one hundred percent (100%) of the minimum capital.
Drawing up documents of Constitution and by-laws before a notary of public faith.
Register the company in the trade register.
Present operating manuals.
Designate appropriate premises.
The Superintendency of pension, securities and insurance, shall issue its decision granting, postponing or refusing authorization of functioning within one period not exceeding sixty (60) days from the date of the filing of the application's operation. If the statement for the postponement, the Superintendence shall prescribe a period so that the observed deficiencies are remedied. Prior pronouncement, the Superintendent may order the inspections it deems relevant and in your case may determine the operating restrictions it deems prudent.
In any case, the Superintendent may order inspections it deems relevant. The operating license will expire automatically if the entity does not start its operations in the term of one hundred twenty (120) days of having been notified with the respective resolution. Article 11.-subject to SOCIAL insurance institutions only and REINSURANCE.-According to this law, insurance and reinsurance entities must have unique social object as one of the following: provide risk coverage exclusively in general insurance.
Granted hedge exclusively in insurance of persons and similar insurance prepaid services.
Granted exclusively prepaid services similar to insurance.
Entities specialized in insurance of persons, may provide services of saving and capitalization according to title VIII of book third of the commercial code.
The insurance entities specialising in general insurance, who so wish, can devote himself exclusively to surety insurance. Article 12.-obligations of the INSURERS and REINSURERS-insurance and reinsurance entities entities must comply with the following obligations, according to the form of insurance that manage: compensate damages and losses or meet the agreed provision when the scheduled event.
Give the prepaid similar insurance services, where appropriate.
Maintain the minimum capital and establish and maintain technical reserves.
Maintain solvency margins established by the present law.
Establish a policy of investment and invest their resources according to the present law.
Register with the Superintendency all service, insurance or insurance plan.
Issue insurance policies, certificates or notes of coverage, clear and easily legible.
Pay the contribution of monitoring for the Superintendency.
Refrain from performing acts that generate conflict of interest or unfair competition.
Submit to the Superintendent informed the same request, all information that is requested by the institution, without restriction of any kind in Bolivia and abroad.
Present States financial monthly and annually. These last with opinion of audit independent; Additionally, the entities specialized in insurance of life must accompany opinion of actuary mathematician independent. Both opinions must be issued by persons registered in the SVS.

Communicate to the Superintendent, within 48 working hours following, any transfer of shares by the shareholders, as well as any other conditions that alter your property, nature or social obligations.
Carry and keep permanently accounts, accounting, capital and assets of each insurance separate accounts, accounting, capital and assets of such other insurance that manage.
Meet other obligations and activities laid down by this law or its regulations.
The insurance entities will be responsible for the contracts made on its behalf by insurance intermediaries with members, decision makers, and beneficiaries of the same.
Article 13.-activities permitted to the entities insurance-the insurance companies may: freely determine their rates, and must comply with its technical bases.
Enforcing payment of premiums in the terms and conditions established by contract.
Require evidence that reasonably can be provided for verification of the occurrence and circumstances of the accident, according to the commercial code.
Freely hire reinsurance in Bolivia or abroad, according to regulations.
Issue mandatory convertible bonds into shares representing the capital of the entity, prior approval of the Superintendent.
Establish or delete branches, agencies or offices in the national territory, prior authorization for the Superintendence, according to regulation.
Establishing subsidiaries or branches abroad.
Make loans to members of voluntary life insurance do not exceed the value of individual reserves rescue.
Register in the register of the securities market and stock market operations, in the terms and conditions established in this law and the law of the stock market.
Contracting entities in the market of securities and banking and non-banking financial sector management allowed investments.
Other activities that are necessary for the compliance of its activity social, whenever is find within its turn social and not are prohibited expressly in the present law.
Article 14-prohibitions to the entities insurance-the insurance companies are prohibited from: advertise and deliver inaccurate or false information on the status of the entity and its products, or the conditions of marketing of the same misleading.
Invest them resources that determine the title III of the present law in entities without purposes of profit, any is its regime legal or in values of debt or capital issued by the same entity insurance.
Establish encumbrances of any kind on resources that determine titles III and IV of this Act.
Issue bonds or deventures other than those authorized by this Act.
Have linking heritage or of administration with the administering of funds of inns to which provide services of safe in the safe Social compulsory.
Perform insurance operations in general with its directors or persons paid by the insurance institution itself.
Invest in other insurance companies who administer the same form of insurance.
Other than its activities.
ARTICLE 15.-ACTIVITIES ALLOWED THE REINSURANCE ENTITIES. The reinsurance entities may: freely determine their rates, and must comply with its technical bases.

Enforcing payment of premiums in the terms and conditions established by contract.
Require evidence that reasonably can be provided for verification of the occurrence and circumstances of the accident, according to the commercial code.
Ensure risks assumed by national or foreign, insurance entities according to regulations.
Issue mandatory convertible bonds into shares representing the capital of the entity, prior approval of the Superintendent.
Establish or delete branches, agencies or offices in the national territory, prior authorization for the Superintendence, according to regulation.
Establishing subsidiaries or branches abroad.
Register in the register of the securities market and stock market operations, in the terms and conditions established in this law and the law of the stock market.
Contracting entities in the market of securities and banking and non-banking financial sector management allowed investments.
Other activities that are necessary for the fulfilment of its business activity, provided that it is within your social twist and not expressly prohibited under this Act.
Article 16.-prohibitions to the entities of REINSURANCE.-the entities reinsurers are prohibited from: advertise and deliver inaccurate or false information on the status of the entity and its products, or the conditions of marketing of the same misleading.
Invest resources determined by title III of this law on nonprofit organizations, whatever their regime legal or values of debt or capital issued by the same insurance company.
Establish encumbrances of any kind on resources that determine titles III and IV of this Act.
Issue bonds or deventures other than those authorized by this Act.
To issue insurance policies and hiring direct insurance.
Invest in other reinsurance entities who administer the same form of reinsurance.
Several of his turning operations.
Have patrimonial relationship direct or indirect or management with managers of pension funds which provide insurance in the compulsory Social insurance services.
Article 17.-audit-the insurance companies and reinsurance companies, through its directory, should hire independent external audit, through natural or juridical persons registered in the Superintendent, under the following minimum conditions: his period of service is not greater than three (3) continuous years, or less than one (1) year management.
The realization of the opinion will be imperative and attached compliance reviews by the insurance company's policy requirements.
The opinion is communicated simultaneously to the Superintendence and to the Board General of shareholders.
Any change or cancellation of the audit services must be communicated to the Superintendent with at least (30) days prior to the effectiveness of such change or termination. The Superintendent may order founded the following: i the removal of any auditor or person involved with the audit, as well as establish the appointment of another person instead of the observed. (ii) the complementation of the scope of the audit, duly justified. Such orders shall be met right by the insurance or reinsurance entity. Article 18.-ACTUARIES-the insurance companies who administer long term life insurance should hire services of an actuary mathematician of the list of natural or legal persons duly registered with the Superintendency.
The Clerk shall be a report on the calculation of mathematical reserves that will accompany each financial statement. The report should pinpoint whether mathematical reserves and premiums received in the future is sufficient for the payment of the benefits committed without reduction and deduction to maturity. The SVS will have direct access at all times to the working papers of the Auditors and actuaries, without any restriction. Chapter II of the intermediaries of the insurance and the REINSURANCE article 19.-intermediaries-are intermediaries exclusively the following natural or legal persons: insurance agents.
The reinsurance brokers brokers. Natural persons or legal stakeholders to operate as insurance intermediaries must be authorized by the Superintendency in only one of the activities provided for in the preceding subparagraphs and comply with the obligations established regulations. Reinsurance brokers must be constituted as corporations different and independent insurance brokers. Runners may alternatively act as insurance advisors. Natural persons to provide these services, except agents, must be construed as proprietorships and declare a separate heritage to these effects.
Article 20.-agents of safe.-can play is as agent of safe, any person natural not impeded to exercise the trade, who will manage usually placements of safe for the entity insurance with who have relationship contractual, has change of a Commission.
The entity insurance will be responsible by the acts of their agents in the frame of them powers granted in them contracts that sign with them. Not may act as agents: the directors, administrators, managers, officers and employees of institutions Bank, entities financial or auxiliary of these.
Those officials public and employees of companies and entities decentralized dependent of the State or its agencies.
The directors, administrators and executives of them entities insurance, as well as those employees to salary of them same that not have quality of agents.
The auxiliary of the safe.
Those foreigners that do not have residence final in the country.

In general, any other person who can exert pressure, influence or coercion on the insured or reinsurer by their position or function.
Insurance agents are prohibited from taking risks on their own or collect insurance premiums, unless express authorization from the insurance company with whom he is contracted. Insurance agents can not sign contract with more than one insurance company. Breach of this prohibition will lead to its definitive disqualification as agents. ARTICLE 21.-INSURANCE BROKERS AND REINSURANCE. REQUIREMENTS for the Constitution and operation-the activity of insurance and reinsurance brokerage, is brokering in the recruitment of insurance and reinsurance, in Exchange for a consideration consisting of a Commission. Persons legal, national or foreign wishing to constitute an entity devoted exclusively to the brokerage of insurance or reinsurance, must be constituted as public limited companies or limited in the case of insurance brokers and exclusively as a sociedad anónima for brokers in reinsurance, and must comply with all the requirements established for the Constitution, functioning and limitation to corporate participation in the insurance companies and reinsurance companies provided for in this Act.
In addition, they must have an insurance policy "errors and omissions" that supports its operations, which must be deposited in the Superintendency of pension, securities and insurance. Article 22.-object only SOCIAL-insurance brokers must have unique social object consisting of intermediation in private insurance without holding a contract of agency or link involving condition with any insurance company.
The brokers may also be insurance advisers, but may not have both qualities in the same operation. Reinsurance brokers must have unique social object consisting of intermediation between the insurance company and the acceptors reinsurers, without holding a contract of agency or link involving condition with no insurance or reinsurance entity.
Article 23.-obligations of the brokers of insurance and REINSURANCE-are obligations of the insurance brokers: report to the insurance company about the conditions in which the risk is and advise the insured or policyholder, for the purposes of contract coverage best suited to their interests.
Inform the insurance company about the suitability of the natural or legal persons who hire through.
Polish to the insured or policyholder of detailed and accurate manner on the clauses of the contract of insurance, its interpretation and its extension, verifying that the policy contains the terms and conditions under which the insurance was contracted.
Notify the insurance company any modification of the risk that would have had knowledge or information, within 24 hours.
To advise the insured during the term of the insurance contract about their rights and obligations, in particular in terms of claims and payment of premiums.
Save the greater book Professional on the negotiations in which intervene, being responsible for civil and in his case, criminally, of them damage that unreasonable.
2. obligations of the broker of reinsurance are: inform the insurance company solvency and ability of reinsurers with whom intermediará reinsurance.
Illustrate to the assignor of way detailed and accurate on them clauses of the contract of reinsurance, its interpretation and its extension, verifying that the note of coverage contains them provisions and conditions low which is hired the reinsurance.
Inform the reinsurance entity any modification of the risk that would have had knowledge or information, within 24 hours.
Communicate to the Superintendent any event which might modify the conditions of its operating license.
Save the greater book Professional on the negotiations in which intervene, being responsible for civil and in his case, criminally, of them damage that unreasonable.
Credited with the Superintendency moral and professional solvency.
Article 24.-Prohibition-insurance and reinsurance brokers are prohibited take risks on their own or collect premiums, unless express authorisation of the insurer or reinsurer, in his case.
Chapter III of the auxiliary of the insurance article 25.-auxiliary of the insurance-to effects of the insurance business, are understood to be by auxiliary insurance the following categories of natural or legal persons, in the latter case constituted like joint-stock companies or limited liability. (a) the adjusters and claims adjusters.
(b) inspectors of faults. (c) the researchers claims. (d) the insurance advisors.
Natural or legal persons to operate as auxiliaries of the insurance, shall be authorized by the Superintendent, in one or more of the activities set out in the preceding subparagraphs and shall comply with the obligations established regulations. Insurance auxiliaries listed in subparagraphs to), b), c) not may act as insurance intermediaries. Insurance advisers may not be insurance brokers.
Article 26.-prohibitions and INCOMPATILIDADES for the auxiliary of the insurance-Los auxiliary insurance are prohibited from: take risks and provide coverage.
Those activities that expressly prohibit them this Act and the regulations.
The auxiliary insurance may not be directors or employees of insurance companies, reinsurers or insurance and reinsurance brokers. Chapter IV of the entities of prepaid article 27.-entities of prepaid-the insurance companies specialized in insurance of persons or any other corporation formed with this sole purpose, may provide similar services to the insurance, charging an advance fee, and must be expressly authorized by the Superintendent for this purpose.
The requirements of establishment and operation, will be established by regulation. Title III of the requirements of SOLVENCY economic financial chapter I of the heritage and margins of SOLVENCY article 28.-provisions General-all insurance, re-insurance entity or prepaid services, shall constitute and maintain the minimum capital that referred to in this law, or of the technical reserves and solvency margins set out in this title, which correspond to the mode of insurance of persons or General manage.
Article 29.-CAPITAL minimum.-all insurance, re-insurance or prepaid services entity should constitute and maintain a minimum share capital subscribed and paid in, at least, equivalent to seven hundred and fifty thousand special drawing rights. (750,000 SDRs), which must be accredited at any time. The only minimum capital may be contributed in cash and in legal tender except for entities of prepaid services of similar insurance, which may also make contributions of real estate and equipment and machinery valued, not taxed, nor granted pledge or for rent and up to a limit set by the regulation and which correspond to the nature of the service provided. Insurance brokers must establish and maintain a minimum capital subscribed and paid in, at least, equivalent to two and a half percent (2.5%) of the minimum share capital for insurance companies. Reinsurance brokers must establish and maintain a minimum capital subscribed and paid in, at least, equivalent to five percent (5%) of the minimum share capital set for reinsurance entities. Article 30.-technical reservations-entities insurance and reinsurance companies must establish and keep permanently, at least, the following reservations: mathematical reserve exclusively for long term life insurance.
The table used for the calculation of the reserve, shall be approved by the Superintendent. The rate of interest technical used for the calculation of such book not may be greater to the interest of market of the values of the treasure national of Bolivia of greater long term, less two points percentage (2%). Reserve for risks in course.

Reserve for claims pending.
Book for raw by charge them reserves mentioned is determined according to the rules and them parameters of calculation will be established by the Superintendency. Them reserves of any policy of insurance of life not can be negative, but when less equivalent to the value of rescue of the coverage of the policy.
The Superintendency may establish, by regulation, the Constitution of reserves for risks catastrophic or extraordinary when the experience claim in determined type of risks so it advise. Article 31.-Fund of warranty.-each entity insurance or reinsurance, should maintain a Fund of guarantee corresponding to the 30% of the margin of solvency, which must be in deposit in an entity financial authorized. This solvency margin may not be less than the minimum capital laid down in article 29 of the present regulatory body. Article 32.-margins of SOLVENCY for insurance of long-term-insurance entities or reinsurance companies that manage insurance of long-term, professional risk and common risk, shall accredit and keep all time, a solvency margin that will be the amount that is greater, between: the sum of the solvency margin based on mathematical reserves and margin of solvency based on risk Capital.

The calculation of mathematical reserves factor will be laid down in the regulation of this law and shall not exceed seven per cent (7%). The mathematical average retention factor, is the result of dividing mathematical reserves retained between total mathematical reserves and may not be less than zero point eighty-five (0.85%) The factor of calculation for venture capital will be of zero comma three percent (0.3%). Retention of capital at risk factor, is the result of dividing the capital detained risk between total risk and no capital may be less than zero point five (0.5%).
The minimum share capital paid established in this Act article 33.-margin of SOLVENCY for the insurance short term-the insurance companies and reinsurance companies which administer short term insurance, must prove and maintained throughout time, a solvency margin which will correspond to the amount among the solvency based on premiums, claims-based solvency and minimum Social Capital.
Factor calculation of premiums to the solvency margin based on premium, will be established by regulation and shall not exceed thirty percent (30%). Factor calculation for claims outstanding shall be established by law and shall not exceed of forty-nine percent (49%). Retention factor is obtained by dividing the value of claims incurred net of reinsurance ceded the last twelve (12) months, between the value of incurred claims totals of the last twelve (12) months and shall not be less than zero point five (0.5).
The insurance companies and reinsurers in insurance of persons who operate with insurance of personal accidents, with health care insurance and supplementary life insurance, whose premiums calculation do not require actuarial calculation, should calculate for these insurance, short-term solvency margin. In this case the solvency margin shall correspond to the sum of the solvency margin for short term and the long term solvency margin. Chapter II of the regime of investment article 34.-provisions General.-the investment them referred to in this chapter, they are those from the totality of the technical reserves, the margin of solvency and withholdings to reinsurers. They must be reversed to seeking a balance between profitability, liquidity and security.
Resources for investment must be invested through stock-exchange mechanisms, in publicly offered securities and other assets permitted by this law. Investments in publicly offered securities are subject to limits by generic type of investment limits by issuer and by categories of risk limits. The totality of them values of offer public invested must be qualified by entities rating of risk, before its acquisition, according to it determined by the law of the market of values. The categories and their equivalents in the international classifications for the qualification of values, will be those set out in the rating of the securities market law regulations. Them transactions in values of offer public corresponding to them resources for investment, must be made in markets stock primary or secondary local or foreigners, authorized by the Superintendence of Inns, values and safe, or the institution supervisor foreign of the market of values corresponding. Keep all the values that make up the resources for investment in entities deposits of national or foreign securities which comply with the provisions in the law of the stock market or in the specific rules of the stock market of the country concerned.
The valuation of financial investments set out in this chapter will take place periodically, according to the provisions of the Superintendency, whereas all of the assets that comprise them at market prices. He percentage of them reserves technical that can be invested in property estate, is limited to estate of income and use own not encumbered or subject to restrictions of any nature and that not can be housing, or destined to housing. The insurance companies may invest in volunteer life insurance policy loans in accordance with the values approved technical plans. Entities of similar insurance prepaid, may also invest in equipment and machinery that apply exclusively to the nature of the service provided. For the acquisition and sale of real estate and equipment and machinery, shall intervene entities specializing in valuation of such property, registered in the SVS.
Article 35.-limits of investment-the investments in publicly offered securities referred to in the preceding article shall be subject to the following limits.
No more than five percent (5%) in securities of issuers associated with insurance company or its parent company.
No more than ten percent (10%) in fixed income of a company or a group of companies linked but not linked with the insurance company or its parent company.
No more than twenty per cent (20%) of investment in a single issuer.
No more than twenty percent (20%) of the heritage of a same issuer the investment in securities issued by the General Treasury of the nation or the Central Bank of Bolivia for short and long term, is not subject to the limits laid down in this law.
The Central Bank of Bolivia shall periodically set the ceiling for investments in securities of issuers incorporated abroad, which may not be more than fifty percent (50%) of resources for investment. It allows investment in not debt securities, according to regulation and authorization of the Superintendency. Maximum levels of investment by generic type of values, within the ranks of investment established by the present law, shall be set by the Superintendent of pensions, values, and insurance.
Investments in real estate may not exceed thirty percent (30%) of the total of investments in entities that administer general insurance and ten per cent (10%) of the total of investments in entities that manage insurance of persons. In addition, such investments can not concentrate on a single asset or groups of assets, according to regulation.
Entities that administer general insurance and insurance of persons must adapt their investments to provisions of the preceding paragraph within one period not exceeding five (5) years from the date of promulgation of the present law.
Investments representing mathematical reserves of pension insurance are unattachable. Reinsurance contracted abroad will not be deducted from reserves in the compulsory Social insurance annuity insurance. Title IV the insurance mandatory chapter one article 36.-insurance compulsory.-compulsory insurance only can be established by law. They must be administered in separate funds, their policies will be uniform and variations in the amounts of the premiums must be expressly authorized by the Superintendency, considering the terms and conditions of the contract that established them. Human capital defense protecting the health of the population, the continuity of their means of subsistence and the rehabilitation of disabled persons, carried out by the State through the establishment of compulsory insurances that comprise social security schemes. Likewise, the guarantee of the social function of the private property, the exploitation of natural resources for the development of the country and the pursuit of the well-being of the Bolivian people takes shape through the establishment of compulsory insurance. The insurance business established in the law 1732 of 29 November 1996 is regulated by this law and its regulations. Article 37.-establishment of the compulsory accident insurance of traffic-is established as binding, that every owner of a motor vehicle in the territory of the Republic, irrespective of their type, have a transit accident insurance. Such insurance will be indisputable, uniform, irreversible benefit and its action will be directly against the insurance company. It secure mandatory has as objective the grant it coverage uniform and only of them expenses medical by accidents and the compensation by death of any person individual, that suffer them events of accident or death originated by vehicles automotive in the territory of the Republic. He capital secured maximum for the eventualities of death, inability total permanent and expenses medical is of two thousand three hundred (2,300) SDRs by person affected by each event and without there is limit of people covered by the same. Them vehicles of all type that circulate in territory national must carry mandatory and permanently the certificate of safe that accredits the validity of this safe. The breach of this provision will be punished according to law. The qualification of the degree of disability, must perform is with the same Manual that them safe collective of the safe Social mandatory. Title V of the protection to the insured persons, policyholders and beneficiaries of insurance chapter one article 38.-provisions General.-the equity in relations between insured persons, policyholders and beneficiaries of insurance and the insurance companies, will be made in the regulation of the insurance contract by the Superintendency, being null and void clauses or provisions that:

Limit or imply renunciation of the exercise of the synallagmatic rights holders and beneficiaries of insurance have recognized by Civil, trade codes, procedural and the laws of the Republic.
To modify unilaterally the price or terms of coverage policies, contracts, or the insurance company insurance plans.
Impose discriminatory conditions or which provoke the defenselessness of the insured, policy holder or beneficiary of the insurance.
The legal protection to policyholders, policyholders and beneficiaries of the insurance, will be made in the following aspects: the offer of products and services shall conform to the nature, conditions, price and modalities that will advertise, either on the premises of the insurance company or through advertisements, prospectuses, circulars or any means of communication.
The scope of the contract of insurance, in the event of discrepancy, ambiguity or doubt will be always interpreted as more favourable for the insured, policy holder or beneficiary.
Clauses which make the effectiveness of payment or service conditional on the acceptance of other benefits or supplemental services for the same or another insurance company, are ineffective.
All insured, policyholder or beneficiary of insurance, has right to clear, truthful information and sufficient envelope products and services offered by the insurance companies. The advertising of the products offered by the insurance entities, may not lead to confusion or deception and will highlight the characteristics of insurance or plan offered in easily understandable way for the public in general. The insurance entities shall promote the development of greater capacity, rationality and transparency in decisions to purchase insurance and insurance products by the public in general, providing the choice established in the price and the quality of the products.
They disseminated knowledge of standards, actions and procedures and institutions of the sector and precautelarán risks from products which would be prejudicial to policyholders, policyholders and beneficiaries of insurance. Insured, life insurance policyholders and their beneficiaries enjoy the character of creditors with privilege and will be paid in preference to other creditors.
Article 39.-Arbitration-disputes in fact regarding the technical characteristics of a certain, will be resolved through the expertise, according to the insurance policy. If in this way not it reached agreement on such disputes, these must be defined by way of arbitration. Them disputes of right raised between them parts on the nature and scope of the contract of safe, reinsurance or plans of safe, will be determined in only e final instance, by the via of the arbitration, according to it planned in the law 1770 (law of conciliation and arbitration). Title VI of the CONTROL and supervision chapter I Superintendent of pensions, values and insurance, article 40.-jurisdiction and DOMICILE-Superintendent of pensions, values, and insurance, is an autonomous institution under public law, of indefinite duration with national jurisdiction and competence privative and non-delegable forming part of the system of financial regulation (SIREFI). Has address main in the city of the peace, and may establish offices or Intendencias in others places of the territory national. It is governed by the provisions of this law and its regulations.
Persons and entities carrying out activities imposed by this law are subject to the jurisdiction of the Superintendence. Article 41.-functions and objectives.-the Superintendence of Inns, values and safe, as organ that monitors and controls them people, entities and activities of the sector of insurance of the Republic, has them following objectives: ensure by it security, solvency and liquidity of them entities insurance, reinsurance, entities of prepaid, intermediaries and auxiliary of the safe.
Report regularly to the public on the activities of the sector and of the own Superintendence.
Protect policyholders, policyholders and beneficiaries of insurance.
Ensure adequate publicity and transparency of the operations in the insurance market.
Comply and enforce this Act and its regulations, ensuring the correct application of its principles, policies and objectives.
Article 42.-Financing of the SUPERINTENDENCY-the activities of the SVS will be financed through a contribution that must be deducted from the total amount of gross premiums produced by the insurance companies or gross income of persons subject to supervision. The annual budget must be approved according to regulation.
The contribution may not exceed two percent (2%) of net premiums for General and one percent (1%). Compulsory insurance, the pension and life, percentages calculated on net premiums produced. Article 43.-powers of the Superintendent of pensions, values and insurance.-the SVS has the following responsibilities: grant, amend and revoke operating authorisations and the registers of persons subject to their jurisdiction, according to this law and its regulations.
Authorize the operation, fusion and modification of statutes of the entities under its jurisdiction.
Supervise, inspect and punish the entities under its jurisdiction.
Supervise activities, insurance policies and contracts in general carried out by entities under its jurisdiction.
Oversee the creation of technical reserves and solvency margins, as well as the application of the rules of investment established by this law.
Order restrictions on the issuance of policies or previous renewal, when it has not fulfilled with increases for solvency margins or the maintenance of the technical reserves.
Establish and update methods of calculation of insurance technical parameters and factors.
Order the periodic reconciliation of accounts of reinsurance.
Set up the register of brokers and reinsurers operating in the domestic market.
Determine accounting rules and establish unique plans for insurance and reinsurance companies for each mode entities and accounts for the insurance intermediary and auxiliary persons.
Order inspections or audits, to entities and persons under their jurisdiction.
If necessary, provide intervention and dissolution of entities under its jurisdiction, and if necessary overseeing voluntary or compulsory liquidation of the same.
Authorize the transfer of voluntary portfolio between insurance and reinsurance companies and place it where it is compulsory.
Develop technical statistics and the biometric and require its publication.
Authorised audit companies enabled the insurance market, as well as set their terms of reference.
Take a risk central, linked with the sector association and the Central of risks of the system banking.
Publish monthly the States financial of the entities under its jurisdiction.
To propose standards to the Executive branch.
Issue operational provisions for the enforcement of this Act and its regulations.
All those functions which are necessary for the performance of their duties.
The sanctions contained in this law.
Article 44.-powers over contracts signed with brokers and REINSURERS foreigners-the Superintendent shall prohibit the acceptance of reinsurance entities in the market, when: the entity reinsurer does not meet a level of minimal risk regulation rating, based on the capacity to pay of sinister, according to international rating by entity, rating agency.
Are not supervised properly by the institution supervisor that corresponds to its jurisdiction, according to criteria of monitoring.
When there is a history of non-compliance of the reinsurance entity.
Article 45.-powers on the brokers of insurance and of REINSURANCE.-the Superintendent shall not authorise the operation of entities insurance and reinsurance brokers when: when any of them has a history of non-compliance or professional misconduct.
When not credited to the Superintendency of pension, securities and insurance, any of the standards required by this Act and an insurance policy of errors and omissions, according to terms, conditions and limits laid down by regulation.
Article 46.-Superintendent of Inns, values and safe-the Superintendence of Inns, values and insurance, will be directed, organized and represented of conformity to the chapter II of the law of property and credit Popular.
The Mayor of safe, must have nationality Bolivian, own title University in provision national and have at least ten (10) years of experience professional, of which must prove at least five (5) years of experience in the field insurance. CHAPTER II REGULARIZATION OF ENTITIES INSURANCE AND REINSURANCE COMPANIES.
PROCEDURES and resources article 47.-measures precautionary and liquidation volunteer-when any insurance or reinsurance entity does not comply with any of the obligations set forth in article 12 of this law, to prevent the aggravation of the economic damage or prejudice suffered, the Superintendency is empowered to determine: the suspension of the issuance and renewal of policies and risk acceptance.

The session's portfolio to another insurance or reinsurance entity as definitive or temporary, understanding the session transfer of all or part of the contract of insurance or reinsurance that the portfolio of the transferor entity. For those purposes, the entity assignee, subrogates automatically all the rights and obligations emerging from existing contracts at the date of the obligation.
Order the directory of the entity, the registry accounting of losses, discipline, forecast and other adjustments against the heritage and reserves, to proceed to the Exchange and resealing of actions according to the residual proportional equity value.
Preventively registering values, real estate and other assets to the relevant authorities.
The voluntary liquidation of the insurance entities will be regulated by article 116 of the law on banks and financial institutions, however replacing the actions envisaged for the Superintendent of banks in the aforementioned law, by the intervention of the Superintendent of pensions, values, and insurance. ARTICLE 48.-CAUSAL INTERVENTION FOR THE COMPULSORY LIQUIDATION. The Superintendent may intervene to liquidate an insurance or reinsurance entity as it incurred in one of the following grounds: insubsanable failure to comply with any of the obligations set out in article 12 and in accordance with provisions in this law art.53 are evident.
Incurred in any of the grounds for presumption of bankruptcy envisaged in article 1489 of the commercial code.
Keep less than the legal minimum capital, do not carry out economic increases for the solvency margin, or technical reserves were insufficient for a period exceeding ninety (90) day calendar, counted from the date the deficiency occurred.
Fails to comply with the rules on investment provided for in this Act and its regulations, according to the provisions of the arts.34 and 35.
Do not lend their services for (ten 10) calendar days continuous, except for reasons of force majeure. Article 49.-intervention, revocation of license and transfer of portfolio-the intervention of an insurance or reinsurance entity will proceed by administrative decision of the Superintendent, duly substantiated. The interposition of resources against the administrative resolution of intervention, will not prevent the measure is executed. During the intervention, the SVS assumes the powers of the General meeting of shareholders and of the Board and appoint auditor powers of Administration for the settlement, which will be specified in its designation. At any time, the Superintendent may revoke the operating license of the insurance company. In this case, the Superintendent will have the session of portfolio of the intervened to another entity or other entities and, where applicable, the suspension of general insurance coverage. The interposition of resources against the administrative decision of revocation of license not suspended this session of portfolio.
At all times, the Superintendency is also available the fulfilment of specific tasks by employees and executives of the insurance entity operated or whose operating license had been revoked. It intervention or revocation of the authorization of operation of it entity not interrupted them obligations and rights collapsed by the entity in it administration of safe and reinsurance and not affects the force of them policies contracted. Article 50.-dissolution-the dissolution of an insurance company or single reinsurer shall prior authorization of the Superintendency, by the grounds laid down in the code of Commerce for corporations. If necessary, the administrative decision of the Superintendent will have the revocation of authorisation of operation and the session of portfolio according to what is established by this law, or the integration of managed portfolios by entities which merge.
Article 51.-measures jurisdictional-is competition of them judges in matter administrative and tax, grant them measures jurisdictional that the Superintendency request for the due application of them rules of the present chapter, including measures preparatory of demand and measures precautionary of all type. The jurisdictional measures requested by the Superintendent do not require tax prerequisite nor equitable. In concordance with the art.48 of this Act, the Superintendent has the authority to take physical possession and seal installations operated entities, with help of the security forces. Criminal actions that the Superintendent is substanciarán to the competent judicial authorities and with involvement of prosecutors in criminal matters. Article 52.-offences and penalties-settle the following types of offences and penalties by the Superintendency: violations minor violations. Correspond to the enmendable or remedied breach of legal standards as a result of negligence or recklessness not attributable to the legal representatives of the entity and that do not cause economic harm or prejudice to the same or to policyholders, insurance policyholders, beneficiaries or other third parties. GRAVE BREACHES. They correspond to the enmendable or remedied breach of legal standards as a result of negligence or willful misconduct imputable to the legal representatives of the entity and cause economic damages to it or to the insured, insurance policyholders, beneficiaries or other third parties.
IRREPARABLE BREACHES. They correspond to the default, not enmendable or remedied legal standards as a result of negligence or fraud attributable to the legal representatives of the body and causing economic damage or prejudice to the same or to policyholders, insurance policyholders, beneficiaries or other third parties. PROSECUTION OF CRIMINAL OFFENCES. They correspond to the criminalized in the Penal Code. SANCTIONS according to the nature of the infringement and to the regulatory provisions, the Superintendency is enabled to apply the following administrative sanctions: ADMONITION. It will be up to the Commission of a minor offence. FINES. They correspond to the Commission of a mild or serious offence. TEMPORARY SUSPENSION OF CERTAIN ACTIVITIES AND OPERATIONS. It will be up to the Commission of a serious offense.
REVOCATION OF THE OPERATING LICENSE. It will be the Committee on infractions flaws. Administrative penalties shall apply in the ranks or lower or higher limits established by regulation.
Article 53.-procedures and resources-the procedures applicable in the insurance sector are those established for the system of financial regulation.
Title VII provisions late and transitional article 54.-tax exemption-life insurance premiums, do not constitute fact generator of tributes. Compensation for life insurance, are exempt from inheritance tax. Article 55.-adaptation to the present law.-the legal persons, entities or groups of persons, regardless of their nature or the standard that any created that they are operating in the activities regulated by this law, in the Bolivian territory, to the promulgation of the same, will have to adapt to the requirements which are set according to the following procedure.
Social conversion of the entities or persons specified, shall be made within a period of one (1) year, from the entry into force of this law, in accordance with statutory, regulatory, or constituent provisions that apply to you. Insurance cooperatives must conform to the requirements established in this law in one period not exceeding three years.
The conversion will not require authorization of the Superintendency Constitution. Once incorporated society, the operating license for the Superintendency, which only will be awarded once the requirements established by this law have been met shall require.
Will be essential to the presentation of a commitment to fitness with an attached schedule within the period of ninety (90) days of the present law.
The financial and technical adequacy will have a maximum period of one (1) year.
If for reasons of number, geographical dispersion or other difficulties in fact, entities or legal persons can meet legal or contractual requirements to agree conversion, its administrators are authorized to carry out a second call to Assembly or meeting, whose decisions will be valid with the number of partners or members that are present. The contractual impediments that may exist to perform the conversion should be amended, using mechanisms that ensure the transparency of the process and the interests of the partners or members.

If by the legal nature of the entities or persons intervention or assistance from authorities or public bodies is required, these shall be on the competition necessary to fulfilling the provisions that apply. While the conversion and up to the issuance of the authorization of operation takes place, the Superintendent will be entitled provisionally authorize the provision of services. Entities or persons specified, that they do not comply with the conversion in due time, or legal requirements for authorization of operation within the time specified by the Superintendent, shall be involved and subject to the measures of dissolution and liquidation provided for in this Act. Article 56.-categories and equivalents-the categories and equivalencies for the qualification of values will be established in the D.S. 24469 of 22 January 1997, while not be issued corresponding to the securities market law regulations.
Categories and equivalences for insurance and reinsurance entities shall be established by law.
Article 57.-Regulation.-the Executive power will regulate this law by Supreme Decree.
Article 58.-modifications, CLARIFICATIONS, appealing and deviating trade.-the following articles of the code of Commerce changed: removed the last paragraph of the article 979 points out: "this title does not apply to Social security schemes".
The text of article 1006 is replaced by the following: "the insurance contract is tested in writing, by the insurance policy. However, allowed more media, whenever there is a beginning of proof in writing. Liza of insurance means the General conditions, the special conditions and annexes. You must write in Spanish in a clear and easily readable form and spread copies the appropriate, and must deliver the original to the insured".
The text of article 1017 of the code of Commerce is replaced by the following: "the premium is due from the moment of conclusion of the contract, but it is not enforceable but with the delivery of the policy or interim certificate of coverage." Subsequent premiums paid is at beginning of each period, except as provided another form of payment, in which case we will charge interest according to their deferral".
The text of the article 1018 of the commercial code is replaced by the following: "in the damage insurance, if the delivery of the policy or interim certificate of coverage if the perception of the premium, presumably lending with interest on the amount."
If the payment of the premium is partial, the granting of credit is presumed by interest on the balance. The non-compliance in the payment of the premium more interests, within the set deadlines, suspended the validity of the contract. "Suspended the validity of the policy, the insurer has right with force Executive to it prima corresponding to the period corrido, calculated to pro rata".
The text of article 1024 of the commercial code shall be amended as follows: "If the termination by the insurer will, this will return pro rata part of the insurance premium for the time not to run, except that during the term of the insurance object of the rescission, you have paid to the insured, claims for a value of when less the eighty-five percent (85%) of the amount of the agreed annual net premium." "If outside by will of the insured, the insurance will have right to the prima by the time run, according to the rate of terms short".
The text of the article 1033 of the commercial code, shall be amended as follows: "the deadline of thirty (30) days, – it concluded with the acceptance or rejection of the claim or the request of the insurer to the insured that will complement the requirements referred to in article 1031 and does not run until the insured complied with such requirements".

The following articles of the law 1732 of 29 December 1996 amending (pensions law): the first paragraph of article 8 of the same Act, is modified with the following lines: "the common risk disability benefit consists of a pension which is paid to affiliate in case of total and permanent disability to perform a reasonably paid job ", not from of risk professional and because of disease".
Following final paragraph is embodied in the same article: "(for common risk disability caused by accident benefits, apply the requirements set out in subparagraphs)(, b) and c) of this article".
In articles 37 and 38 of the designated law 1732, "Superintendent of pensions" is replaced by "Superintendency of pension, securities and insurance,".
Repealing paragraph p) of article 49 of the law of pensions 3. Contracts of insurance listed in title III of D.S. 14379 of 25 February 1977, they are numerativos and do not restrict freedom of contract by policyholders and the production of services by the insurance companies.
4 Appeals Act of September 27, 1904. 5. be abrogating Decree-Law 15516 June 2, 1978. 6 repealing all provisions contrary to this law. Pass to the Executive Branch for constitutional purposes. It is given in the Hall of sessions of the Honorable Congress national, to the twenty-three days of the month of June of thousand nine hundred ninety-eight years.
FDO. Walter Guiteras Denis, Hormando Vaca ten ten cow, Gonzalo Molina Ossio, Edgar loop Loayza, Guido rock Villavicencio, Jhonny silver Chalar. I therefore enacted it is and meets as a law of the Republic. Government Palace of the city of La Paz, twenty-five days of the month of June of thousand nine hundred ninety-eight years. FDO. HUGO BANZER Suárez, Carlos Iturralde Ballivián, Guido Nayar Parada, Edgar thousands Ardaya, Jorge Pacheco Franco, acting Minister of development economic, Tonchy Marinkovic Uzqueda.

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