2020 Miami Latin American Claims (Re)Insurance Forum – Registration is open, come and join us!


Kennedys and QLDG are pleased to announce the 6th edition of the annual Miami Latin American Claims (Re)Insurance Forum, the event of choice for the insurance industry in the region.

For the first time, in addition to the popular involvement of International and local CEOs, executives working in the region will discuss Innovation that makes their operation more efficient. A significant few risk managers will also join the event.

The Forum will be held at the Four Seasons Miami, in the heart of Brickell, downtown Miami’s financial and cultural center, from June 16 (Welcome Cocktail) to June 19 2020.

The Forum will bring together key international and Latin American industry experts who will be analyzing top issues and developments in Latin America and the Caribbean. Topics and case studies are carefully chosen based on current affairs and the feedback received by professionals from the (re)insurance industry.

You can find the program HERE including speakers from over 30 carriers and international reinsurance brokers.

Thank you to our sponsors Advanta, Crawford, Envista Forensics, IRB Brasil Re, McLarens, Rimac, R&G Espinosa and Sedgwick for their support.

This is an exclusive event and attendance is by invitation only, as places are limited.

Registration is now open.

To register, please click HERE and use the code FORUM2020 (case sensitive)

Simultaneous translation in Spanish and English available.

For information, please contact:
Juan E. Lopez-Santini: jlopez@qldg.com
Alex Guillamont: alex.guillamont@kennedyslaw.com
Hilda Welcker: hilda.welcker@kennedyslaw.com

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Important precedent for the (re)insurance market in Colombia

Waving Colombian Flag National Capitol in Bogota, Clolombia

Just a week after the second of our articles relating to fiscal liability proceedings in Colombia, the Comptroller General or Contraloría (CGR) have agreed with our direct revocation request in the Institute for Urban Development (IDU) matter.

The strategy of providing full coverage considerations with the revocation request worked. The CGR let itself be educated on insurance issues and, for the first time, agreed that fiscal proceedings and insurance contracts may be interrelated, but should be approached differently. The CGR admitted that their previous analysis was incomplete, and concluded correctly that the policy in effect when the investigation commenced in 2014 is the only one that should respond in observance of “claims made” underwriting principles.

The CGR expressly recognized that their decisions now being revoked were unduly detrimental to the insurers previously condemned and has ordered the full return of funds.

The CGR decision is final as no appeal is allowed. It remains to be seen whether the CGR will apply the reasoning behind the revocation in similar investigations, whether they involve civil servant or more standard D&O wordings.

Authors: Monica Tocarruncho, Partner in Kennedys Colombia and Alex Guillamont, Head of Latin America and Caribbean at Kennedys.

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Update: Fiscal liability proceedings in Colombia

Waving Colombian Flag National Capitol in Bogota, Clolombia

In our previous article, Fiscal liability proceedings in Colombia, we discussed how the recent decisions of the office of the Comptroller General or Contraloría (CGR), the autonomous governmental agency in charge of monitoring public fund use, have caused great concern among (re)insurers globally due to their departure of long established market principles.

The CGR investigates and issues administrative decisions on publicly-sponsored projects that have gone wrong, and they also hear the first appeal before the matter goes to judicial courts. In this article, we discuss a recent CGR decision which has renewed controversy and concern among (re)insurers.

The CGR investigation commenced on 15 September 2014 and was related to the third extension of the urban public transportation system of Bogotá, known as Transmilenio. The Institute for Urban Development (IDU) was charged with double paying preliminary studies and design models for the work.

The CGR also concluded that several IDU officers got ahead of themselves by approving work to commence before the design had been finalised, and then incurring unnecessary expense in getting the detailed design done, which modified the initial design parameters.

The CGR sought to collect COP 5,567,141,588 (approximately US$ 1,622,69306). On 8 April 2019, the CGR issued the accusation writ (indictment) against three IDU officers and of their D&O (directors and office liability) insurers. On 12 June 2019, the CGR issued the first instance decision against the IDU officers and insurers, ordering the joint and several payments to the State as compensation for the damage caused, i.e. the unnecessary fees paid in consulting and design fees. On 15 August 2019, the Head of the CGR issued the second instance decision confirming liability.

The reasons why this decision has caused so much controversy within the (re)insurance market include those that were advanced in our previous article, but also confuses the application of deductibles. In summary:

  • The CGR disregarded the application of claims made clauses because, they say, claims made clauses are not applicable within fiscal liability proceedings since the civil and commercial rules to trigger the policies differ from the ones applicable to fiscal liability proceedings and the “occurrence” underwriting model should apply.
  • The CGR asserts that multiple and subsequent acts and omissions caused the damage. The CGR does not aggregate the loss as such but considers this is a continuous event, even though all of those acts or omissions are related. Therefore, the loss is not allocated in accordance with the rule of Article 1073 of the Commercial Code – that says that if a loss starts during the policy term and continues after its expiration, the policy in force at the outset responds – but rather concluded that all the policies in effect during the years that the loss ensued, from 2004 to 2011, should contribute to the indemnity to be received by the CGR.
  • The CGR expressly states that Title V of the Colombian Commercial Code, which regulates the insurance contract, is not applicable within fiscal liability proceedings. The CGR read the Constitution and Law 610 of 2000, which regulates fiscal proceedings, as somehow precluding the application of insurance principles. In a dangerous move, the CGR considers that procedural aspects of how a fiscal investigation should be progressed prevail over substantive regulation of the insurance contract.
  • The CGR ignores the applicable deductibles: the CGR states that within the fiscal liability proceeding, insurers would be held liable up to the net value of the damage caused in each particular case. Once again, perhaps unconsciously, the CGR applies the “procedure comes first” approach to state that any petition regarding the application of deductibles shall be raised during enforcement proceedings.

Insurers agreed with us that addressing these excesses required a new approach. Having exhausted the available administrative remedies, Kennedys on behalf of one of the insurers filed a pioneering request for direct revocation of the GCR’s decision before the CGR, allowing the CGR to overturn the decision before starting an administrative Court Proceeding.

We argued that the CGR decision is against the public and social interest of the country and that, if it becomes final, unjustified detriment will be caused to the insurer. Within the request there is a detailed explanation about claims made clauses, what should be considered as a claim, their history, how Public Officers D&O policies are usually drafted, why insurance is a business concerned with the public interest and the possible consequences that decisions like this one would have for the country as (re)insurance capacity may disappear. Furthermore, as the biggest concern of the CGR was that according to the defence arguments no policy would ever respond, we decided to present a different approach than the traditional litigation position, which was to run a coverage analysis of the case in terms of policy period.

Regarding the possible consequence that the CGR decisions might have for the country, it is also of importance to highlight the award dated 27 August 2019 of the International Centre for Settlement of Investments Disputes (ICSID) in the arbitration proceeding between Glencore International A.G. and C.I. Prodeco S.A. v the Republic of Colombia. The arbitration Tribunal ordered the Republic of Colombia to refund to C.I. Prodeco S.A. the amount awarded during fiscal liability proceedings, with interest. The Arbitration Tribunal argued that the determination of the existence and quantum of damages made by the CGR was biased, contrary to basic principles of legal reasoning and financial logic, and incompatible with the standard of conduct that Colombia undertook to provide to protect Swiss investors under the 17 May 2006 Agreement – for the Promotion and Reciprocal Protection of Investment.

The CGR decision is awaited. If the revocation is accepted, it will become precedent for similar proceedings affecting the market.

Finally, the Constitutional Amendment mentioned in our previous article was approved on 11 September 2019. Congress shall enact the laws to implement the preventive controls, to regulate the ex-post judicial controls regarding fiscal liability administrative acts, the General Comptroller’s Office prevalent jurisdiction, the General Comptroller’s judicial policing powers and the regional control exerted by the CGR.

Dialogue between (re)insurers and several government agencies continues.

Authors: Monica Tocarruncho, Partner, Kennedys in Colombia; Catalina Botero, Senior Associate, Kennedys in Colombia and Alex Guillamont, Head of Latin America and Caribbean practice at Kennedys.

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Join us tomorrow for the next Women in (Re)insurance event

Women in reinsurance Nov 13 2019

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Chile: Civil commotion or something else?

Santiago de Chile  Cathedral

The protests that have taken place in Chile, sparked by the rise of subway fares in the capital Santiago, have been well documented in the press. Those protests and riots have been often violent with regrettable loss of human life and instances of damage, sometimes severe, to public and private property. Instances of looting and vandalism were widely reported. Many businesses decided to stop production and send workers some to avoid being the subject of aggression.

A state of emergency was declared by President Piñera which enables the government to restrict freedom of movement and assembly, for 15 renewable days. Under the Constitution, serious alteration of the public order or damage (or threat of) to the Nation´s safety and security are the required triggers. A night curfew was in place as well, lifted very recently.

Although the unrest continues, it appears the worst has now passed, with centre-right Piñera having replaced relevant cabinet members and promised the left-wing protesters a series of measures minimum wage, pensions, and health insurance cover improvements. Interestingly, the President has conceded that “Chile has changed and the government also has to change to deal with these new challenges and times[…]”our government has listened to the clear and strong message sent by Chileans, who demand and deserve a more just and supportive country with more opportunities and less privilege” [1]. We discuss what this means for insurance below.

Many insurers have been considering how to apply these events to specific coverages, or exclusions, that may have application. Whilst the protests in Chile were unexpected, this is nothing new for the market. Lloyd´s for instance has insured riots and civil commotion in Latin American since 1910[2]. There are several variations of strikes, riots, and civil commotion (SRCC) cover. Under the classic LMA 3092 clause[3], property policies respond to physical damage to, or loss of, tangible property caused, amongst others, by civil commotion, malicious damage, riot, sabotage, and strike. Interestingly, whereas Civil Commotion only requires a “common purpose or intent” of a “substantial violent uprising” and Riot adds that the common purpose “threaten the public peace”, neither go into the perpetrator’s underlying motives, which are irrelevant as long as such motives do not infringe with exclusionary language.

In contrast Sabotage and Terrorism policies are sometimes written as stand-alone cover. Here the underlying motives are the cornerstone of the cover the language often referencing political, religious, ideological or similar purposes including the intention to influence or overthrow any government. Governments are often swift to categorise events as terrorist in nature[4] in deflecting attention from the underlying economic conditions which have led to protest but ultimately the issue is one of fact to be determined in every case.

Whilst conceptualising political violence along a spectrum starting with riot, civil commotion, terrorism can sometimes assist the reality is that such clear demarcations are often illusory. Such perils often overlap in certain respects and there is no short cut to an analytical approach.

Property policies may exclude Sabotage and Terrorism, and Terrorism and Political Violence policies tend to cover SRCC, Sabotage and Terrorism but exclude common theft or looting. There are combinations of Political Risk, Political Violence, and Property Terrorism policies out there and as always, what is actually covered is down to the specific wording.

Grey areas will surface around the “number of occurrences” (application of deductibles [possibly the incorporation of 72 -hour clauses] and limits), whether Business Interruption cover has been triggered in instances of wide area damage, whether policies incorporate non damage extensions for denial of access/loss of attraction—loss of revenue due to potential customers staying away from businesses subsequent to the event—and if so whether such extensions (often heavily sub-limited) are nevertheless caught by relevant exclusions.

What is certain, from previous experience, is that as soon as things start to normalise the insurance regulator in Chile will be asking insurers to be proactive in adjusting declared losses, of which there will be many. A swift determination of the facts and how policy language applies to those facts will therefore be the primary objective against the backdrop of the strict regulatory regime which applies to the adjustment process in Chile.

We will continue updating the market as developments unfold.

Authors: Alex Guillamont, Head of Latin America and Caribbean at Kennedys and Mario Diemoz, partner in Kennedys Chile.

[1] https://www.bbc.com/news/world-latin-america-50207883?intlink_from_url=https://www.bbc.com/news/topics/cvenzmgyg45t/chile&link_location=live-reporting-story

[2] https://www.lloyds.com/about-lloyds/history/innovation-and-unusual-risks/pioneers-of-travel

[3] http://www.lmalloyds.com/LMA/Wordings/LMA3092.aspx

[4] https://www.theguardian.com/commentisfree/2019/oct/24/democracy-chile-protesters-pinera-pinochet


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Upcoming Insurance Seminar in Miami: Demystifying the cyber coverages

Computer source code programmer script developer.

The Cyber policy has a unique constellation including both first party loss and third party liability as well as breach response services (pre and post breach).

The Association of British Insurers recently revealed that over 99% of all cyber insurance claims submitted to carriers in the UK were paid, making the claims acceptance rate one of the highest across all commercial lines insurance. Nonetheless, the systemic and complex nature of the cyber risk combined with the large scope of the cyber policy makes it difficult for businesses and individuals to grasp the coverages properly.

How to know when/if the cyber policy is triggered or not and which coverages are activated? How to understand cyber insurance policies and make sure clients have the right cover in place?

This presentation will give you some background on the key concepts of the cyber world and insurance policies and “stress test” coverages while navigating through different scenarios and real cases.

Following Sylvie Verdier’s presentation, Tom Gummer, Kennedys’ Innovation Manager and regional lead for the Americas will provide an introduction to Kennedys’ client focussed approach to innovation, its technologies and their applicability to the Latin American market.

Law firm, Kennedys develops online and offline technology solutions that simplify & streamline various touch points along the claims lifecycle, allowing insurers and reinsurers across the globe to save millions in claims operational spend and legal defence costs. These award winning technology solutions are configurable to different regional claims processes and local languages.

Sylvie Verdier AXIS

Sylvie Verdier is a senior Cyber underwriter at AXIS and brings more than 10 years experience in the insurance industry. She is responsible for the market development and underwriting of Cyber in Latin America and the Caribbean. AXIS is one of the leading carriers in cyber insurance with over 150 years combined cyber underwriting experience. The AXIS Cyber Center of Excellence (CoE) is the specialty insurance industry’s premier global cyber resource, offering a broad range of cyber insurance protection and mitigation solutions for tangible and intangible assets.


Tom gummerAlex Guillamont-square
Tom Gummer
is Innovation Manager at Kennedys. Working together with Kennedys’ Head of R&D, the team’s developers, data scientists and the rest of the business, Tom helps to manage and implement client focussed innovation work globally. He is regionally responsible for Latin America, the Caribbean and supporting the US, working together with Kennedys Head of LatAm Alex Guillamont to serve client needs in the region via our technology capabilities.

Date: October 29th, 2019
5:15 pm Registration
5.30 pm Conference
6:00 pm Informal discussion
6:30 pm Networking

Where: Malbec Room at Novecento 1414 Brickell Ave, MIAMI, FL 33131
Registration deadline: October 28th, 2019 at 1:00 pm. Only 40 tickets available.

To register, please email: hilda.welcker@kennedyslaw.com
Business casual attire.
Cost: Free

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Changes in Cuba: Facts or Fiction?

cuba flag-2526259_1280

On 13 July 2019, the Cuban Parliament approved the new Electoral Law, restricting, for the first time in nearly 60 years, the presidency to a five-year term in office and a maximum of two consecutive terms. This new law also creates the figure of the President, to be elected by the National Assembly and not by direct vote of the people.

This new act constitutes the first legal provision issued after the amendments made on 22 July 2018, when Cuba’s National Assembly unanimously approved the issuing of a new constitution. These amendments are the result of open discussions held during the second half of 2018, where Cuban citizens were given the opportunity to express their opinions and suggest “changes” to the initial proposal. This exercise culminated in a constitutional referendum that took place on 24 February 2019, where 7.8 million (90.15%) exercised their right to vote with 86.85% voting in favor of the amendments.

Although most of the proposed amendments are still in the process of being drafted for later implementation, the new modifications, if implemented, would allow a “free market economy” yet keep the Communist Party in control of the economy and of the state. A division of power at the top of government is also proposed, aimed at guaranteeing the preservation of the socialist system in a post-Castro era.

Although Raul Castro handed power over to Miguel Díaz-Canel, who was instituted Prime Minister in April 2018, Castro will remain head of the Communist Party until 2021, although actually he has indicated his willingness to go after that. As Raul also heads the constitutional reform commission, it is clear that he will have control of the ship at least until then.

The new Constitution also creates the position of Prime Minister and designates the President of the Assembly as head of state, Cuba’s highest executive body. Nevertheless, the President will not be in charge of the Council of Ministers, which would be supervised by the Prime Minister as it has been up to now. As of today, Díaz-Canel is acting as both, President and Prime Minister, until the election of the President be held next October and that of the Primer Minister before the end of this year. The position of the President will be chosen by the National Assembly — it is expected to be Díaz-Canel —, while the Prime Minister will be appointed by the President and ratified later by the National Assembly.

Under the new Constitution free health care and education to all Cuban citizens continue to be guaranteed. However, some services, such as aesthetic procedures, as are excluded in almost all insurance policies worldwide, will not be covered. It would be the first time that Cuban hospitals will charge Cubans for medical services. As it is now the case, tourists will continue to need a mandatory medical insurance policy — which needs to be issued by a foreign insurance company authorized by Cuban entities  — to be allowed entrance to Cuba.

A year since the Trump administration banned all commercial and financial transactions with 180 Cuban companies (mainly linked to the Cuban Armed Forces), the list has grown to 220 companies as of today . Whilst entering a phase of gradual political transition, Cuba will continue to lack access to US reinsurers to protect risks. For more info about reinsurance issues in Cuba, please refer to the following links:




[1] http://www.cuba-hostels.com/health-insurance-policy-for-traveling-to-cuba/list-of-recognized-insurance-companies-in-cuba/

[2] https://www.state.gov/cuba-sanctions/cuba-restricted-list/list-of-restricted-entities-and-subentities-associated-with-cuba-as-of-april-24-2019/

Authors: Alex Guillamont, Head of Latin America and Caribbean at Kennedys and Daniel Padrón, Associate at Kennedys’ regional hub in Miami.

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