A new setback on 'claims made' insurance - DAC Beachcroft

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A new setback on 'claims made' insurance

Published 18 March 2021

Recently, a new Court ruling[1] resolved against the legal enforcement of ‘claims made’ basis insurance policy in Argentina. In this case, judges argued that claims made basis insurance policies are abusive and against the Argentine Insurance Law
No. 17,418[2], quoting previous argentine jurisprudence that ruled in the same vein. In many of these cases it was pointed out that, following the abovementioned law, when a loss occurred while the policy was effective it must be covered by the insurer even if the policy has not been renewed. Although this reasoning may not be entirely accurate, other case law had applied similar arguments in the past.

Since 1990, only thirteen cases ruled on this matter. Most of them (eleven) declared claims made insurance as abusive, ineffective, or even null and void. On the contrary, the two cases that ruled in favor stated that ruling against claims made basis insurance policies would modify the main obligation assumed by the insurer substantially because the risk taken would be greater than the risk the policyholder purchased[3]. Moreover, one of these cases[4] introduced the idea that when an insured is a human being, ‘claims made’ clause must not be applicable, yet when the insured is a legal entity, claims made insurance is enforceable.

It is also important to consider that the new Argentine Civil and Commercial Code[5] changed the liability statute of limitations from ten to three years.

 

[1] "B., M. C., c./ S., J. y otros s/ daños y perjuicios”, Civil Court of Appeals, Buenos Aires Province,
November 13th, 2020.
[2] Especially Sections 109 and 120.
[3]B.J.P. c/ C.M.B.S.”, Superior Court of Justice, Rio Negro Province, December 3rd, 2019.
[4]Furtado, Néstor Gabriel c/ Edesur SA s/ daños y perjuicios”, National Civil Court of Appeals, Chamber C, March 12th, 2007.
[5] Effective as of August 1st, 2015.

Key Contacts

Martín G. Argañaraz Luque

Martín G. Argañaraz Luque

+54 11 4318-9975

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