Exclusions in the insurance contract

2023-06-02 07:13:24

Friday, June 2, 2023

Within the framework of the execution of the insurance contract, there are events in which the insurer, based on its clauses such as liability exclusions, denies recognition of the insured value, frustrating the expectation of the insured and/or beneficiary. Situation that leads to rumors that insurers do not comply with their obligations by relying on the so-called “small print”, claiming surprise about the exclusions and that these were imposed in an adhesion contract, against which the contracting party is limited to accepting them or not enter into the contract.

These rumors are unfounded, given that, in order to protect the insured and/or beneficiary, the legislator has imposed requirements on insurers for an exclusion to have legal effects, guaranteeing the right to information of the insured and/or beneficiary, so penalty that its non-compliance generates the ineffectiveness of the exclusions.

These requirements regulate how the exclusions in the policies must be written, located and communicated, which must be in accordance with the provisions of the Organic Statute of the Financial System -EOSF-, the Basic Legal Circular 029 of 2014 of the Financial Superintendence and the protection regulations to the consumer.

The EOSF and the Basic Legal Circular agree that the coverage and exclusions of the policies must appear in prominent or highlighted characters continuously and uninterruptedly, but they do not coincide in the way they must be reflected in the policy, since the former establishes that must be “on” the first page and the other “from” the first page. This is how, under these two understandings, the Civil Cassation Chamber of the Supreme Court of Justice has decided cases in the venue of guardianship and cassation in a contradictory manner, declaring in some cases the ineffectiveness of exclusions that were not on the first page of the policy, and in others recognizing the validity of the exclusions if they were established from the first page.

Recently, the Court in judgment SC2879-2022 with the purpose of unifying the jurisprudence (reiterated decision in judgment SC098-2023), decided to address the study of these two understandings to settle the discussion indicating that “in insurance policies the basic protections and The exclusions must appear, in prominent characters, starting on the first page of the policy, continuously and uninterrupted.” The first page of the policy is understood to be the “initial page of the general clauses of each contracted insurance”, since from this the delimitation of the risk must be duly reflected, with the corresponding coverages and exclusions.

The decision adopted by the Court will allow civil and guardianship judges to address the study of similar cases under these parameters, issuing sentences in the same sense and avoiding litigation regarding the effectiveness of exclusions in insurance contracts.

Once the discussion on the wording and location of the exclusions has been overcome, the opportunity now opens to deepen the study on the proper communication of the exclusions, taking into account the provisions of the consumer law, condensed in Laws 1328 of 2009 and 1480 from 2011; which, with regard to exclusions, establishes the obligation for the insurer to inform the potential policyholder and/or insured of the existence of these and their scope, so that the consumer knows the product, his rights, obligations and can compare it with others From the market.

The insurer must deliver the clauses to the policyholder, explaining sufficiently and expressly the content of the coverage, exclusions and guarantees, under penalty of the conditions being considered ineffective or not enforceable against the insured and/or beneficiary, as has been argued on some occasions. the Delegation for Jurisdictional Affairs of the Financial Superintendency of Colombia.