Chile is adjusting: (re) insurers, claims and loss adjusters

It is well known that a legal side effect of the 2010 earthquake was the modification of the Insurance Act. It has been more than a year since the new regulation came into practice, but what has it happened since?

An obvious change that the amended Act has brought about is the modification of the role of loss adjusters in the claims handling process. International markets are taking good note of the regulatory changes—last year Lloyd’s signed a Memorandum of Understanding (MoU) with the Chilean Insurers Association for the modification of the claims cooperation and control clauses NMA 2337 and NMA2328, in order to adapt the standard market clauses to new requirements on loss adjusting.


Chile had already achieved recognition as a country where claims are handled seriously, judges and arbitrators are considered neutral and where the rule of law is respected. The new regulatory scenario has added more guarantees for both insurers and reinsurers, adding clarity to the roles that all stakeholders involved in a claim should play. Nonetheless, the newly acquired role of loss adjusters could also, in certain scenarios, pose a risk for insurers. In this sense, there are three main risks insurers have to be aware of in the loss adjusting process:

  1. All communications between the loss adjuster and the insurer can be requested by the insured; therefore the loss adjusting process itself can become a liability if there are conflicting views expressed in writing between the insurer and the adjuster.
  2. Once the final adjustment report is issued, the insurer has limited options to contest it. If not contested, it is deemed approved. It is precisely because of the independent nature of the loss adjusting process that the Courts, in case of a disagreement between the insurer and the insured, could assume that whatever the report says is just and accept it as such. For a detailed account of the applicable deadlines see our article here.
  3. In order to avoid having to go to Court, and knowing that their report could be key in case of a trial, the loss adjuster might be tempted to reach “an acceptable halfway house” between the insured’s request and the insurer’s proposal. When dealing with major claims, the adjuster could be inclined to act as a “technical mediator” and bring the parties together in order to have insurers and insured settle the issues off court and reach an agreement that will be embodied within the adjusters’ report. But the parties are of course free to walk away from the adjuster’s suggestions if they do not consider them in their best interest.


Another interesting feature of the new regulation is the obligation for insurers to deposit all judgments and arbitral awards before the supervisor. In theory, these judgments and awards are publicly available, nonetheless accessing them can prove to be a Homeric task. If these judgments and awards to become available and properly indexed, it could create a specialized case-law that would include arbitration, making it an obliged reference for insurers. Unless the names of the parties and the details of the case are reducted, this obligation could go against the principle of confidentiality that prevails arbitration.

It is very important for (re) insurers to be correctly advised of both the particulars of the claim and coverage issues and also the loss adjusting process. In order to avoid issues of miscommunication with the adjuster that could eventually be a liability to the insurer, it is vital to be well coordinated with the stakeholders involved in order to try and lead the claims adjustment process to an acceptable conclusion.

Kenendys Latin America insurance Law Firm


ALEX GUILLAMONT Director of Miami office for Latin America & Caribbean

Alex Guillamont, Kennedys Latin America Director

Alex Guillamont is the director of Kennedys Latin America and leads the Latin American and Caribbean practice at Kennedys. He handles disputes on behalf of leading international insurers and reinsurers, having represented clients across the region. With 15 years of experience, Alex is an acknowledged leading expert on insurance and reinsurance matters regionally. After serving the market with claims in Iberia from our London and Madrid offices, he relocated permanently to Miami in June 2010. The industry has voted him year on year into the LATAMIR Power 50 list, Latin American insurance sector most influential professionals. His team in Miami has been awarded the 2013 and 2014 Reactions Latin America Awards for best Law Firm. Also, Alex has been awarded as Insurance & Reinsurance Attorney of the Year in Latin America 2014 by Global Law Experts.

Power 50 LATAM Alex Guillamont 2015

Alex is involved in complex losses on major environmental and natural disasters, contractors all risk, political and trade risk, financial institutions and D&O claims, energy losses, regulatory compliance and third party administration schemes and political risk in the entire region—most recently in Argentina, Bolivia, Bahamas, Brazil, Chile, Central America, Colombia, Costa Rica, Ecuador, Haiti, Mexico, Panama, Peru and Venezuela. He and his team advise carriers on regulatory issues and strategic deployment of offices, wordings and claims handling procedures, audits of ceding companies and underwriting agents.


Kennedys’ Latin America and Caribbean office is based in Miami to help international insurers and reinsurers manage claims and non-contentious issues across the region. Our dedicated multilingual team is well placed to support our clients, and we also draw on the skills and experience of Kennedys globally.

The Miami team works with our network of Latin American and Caribbean law firms. Kennedys have associated offices in Brazil, Chile, Colombia, Chile and Mexico and long-standing relationships with leading insurance and reinsurance law firms in the rest of the region.

Our lawyers in Miami are also supported by our international insurance team, including the London Market division and other offices around the world who handle some of the most significant insurance and reinsurance matters worldwide.

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