Bolivia Insurance Information

CIA link to demographic/economic data on Bolivia

General Bolivia Insurance Information

The major changes in the Bolivian economy started in 1985 when Government measures stopped hyperinflation, reduced the State’s participation in business activities and liberalized the economy. Bolivia continues to be one of the smallest markets in Latin America. Since the deregulation of the motor tariff in 1991 all premiums have been freely rated.

Non-Life

Compulsory Insurance:

• Personal accident insurance for vehicle owners (SOAT) – gives no-fault coverage for medical and funeral costs or compensation for death or injury in road accidents.
• Aircraft are required by the civil aviation authority to have liability coverage for third parties and passengers.
• Worker’s Compensation has been transferred to the private sector.

Admitted – Non-Admitted Insurance:

The 1998 insurance law states that the insurance of risks located in Bolivia must be placed with insurers who are legally authorized to operate in Bolivia. Foreign reinsurers involved in Bolivian business must register with the Superintendency unless they transact inwards and outwards cessions through registered reinsurance brokers.

Cancellation Provisions:

Tacit renewal is standard although it is a market custom for insurers to send written renewal invitation 15 to 30 days before expiry. An insurer must give 15 days’ notice of cancellation but the insured may cancel without notice.

Currency:

boliviano (BOB)

Taxes:

All non-life: VAT 13%
All non-life – superintendent’s levy 2% (except SOAT, which is 1%) payable by insurer.
All non-life: transaction tax 3%

Commissions:

Commissions are not regulated.

Premiums:

Two-thirds of the non-life premiums written in 2002 were introduced by brokers. Direct sales have suffered from this development. 40% of the premiums written by life insurers in 2002, excluding contingency and disability business, were introduced by brokers.

Market Players

Ten companies disappeared over the last decade; eight stopped writing insurance and two merged with other companies. Another eleven companies entered the market since 1991.
Members of the Bolivian Insurance Association accounted for 93% of 1998 premiums