Colombia Insurance Information

CIA link to demographic/economic data on Colombia

General Colombia Insurance Information

• Compulsory Insurance:
  
  1. Third Party Automobile Liability;
  2. Workers’ Compensation (part of Social Security Scheme);
  3. Personal Accident for inland public transport vehicles;
  4. Professional Liability / Indemnity for insurance brokers;
  5. Earthquake for mortgaged property;
  6. Aviation Third Party Liability;
  7. Bonding for Government projects / work.
• Non-Admitted Insurance:
  Prohibited unless coverage / capacity not available in the local market and then permission must be obtained from the Superintendency.
• Policy Wordings & Rates / Tariffs Controlled:
  Large commercial risks are allowed quite a bit of freedom of form and rating.
• Policy Language:
  Spanish.
• Types of Insurance Restricted to Government Institutions:
  None known.
• Policy Currency:
  Colombian Peso (CP). U.S.$ insurance available for Marine Exports / Imports and large risks (usually Government Projects and oil related ventures). U.S.$ insurance also available for Life and Personal Accident policies.
• Currency Restrictions / Exchange Controls:
  The Peso is not freely convertible and any transfers must be channeled through the Central Bank. Policies must be issued in local currency unless prior authority has been granted by the Superintendency. In this latter case, claims can be paid in the previously agreed currency.
• Policy Period:
  Annual. Long Term Agreements (LTAs) are available and the resulting discount.
• Cancellation Provisions:
  By the Insured: None required but check policy language as prior written notice may be required. By the Insurer: Legally 10 days but custom allows for 30 day notice.
• Premium Tax, etc. paid by Insured:
  16% for all classes except life, health and accident which are nil. Other than 1% fire brigade charge calculated on the basic fire premium income, small stamp duties are charged in certain areas of Colombia. As the fire brigade cost is built into the rating structure, reinsurers are not required to make a contribution. Healthcare premiums are subject to a 10% rate.
• Insurance Companies:
  National and Foreign Insurers are allowed to operate in Colombia. Foreign investment in Colombian insurance companies is now allowed up to 100% (a few restrictions may apply).
• Brokers:
  Broker market. Brokers must be registered with the Superintendency in order to be paid commissions. Non-registered brokers will not be paid.
• Brokerage Commissions:
  Commission examples: Fire - 27.5%; Liability - 17.5%; Marine Cargo - 20%.
• Broker of Record Letters:
  Usually required for large commercial risks.
• Reinsurance:
  The Superintendency levies a 1% fee on all reinsurance ceded abroad. Local Insurers may not cede more than a certain percentage by line of coverage (e.g., fire - 40%).
• Local Natural Hazards:
  Earthquake in Central and Western Colombia.
• Other Information:

Property Insurance

• Fire:
  Standard fire perils include - fire and lightning. Aircraft, explosion, earthquake, flood, storm / tempest, burst water pipe, riot / civil commotion, malicious damage, windstorm / hurricane and vehicle impact are available in the market for an additional premium charge.
• All Risk:
  Available for Builders Risk, Contractors Equipment, Machinery Installation and larger property policies.
• Coinsurance:
  None known at this time.
• Blanket Insurance:
  Available.
• Business Interruption:
  UK and U.S. forms available.
• Replacement Cost:
  Available.
• Discount for fire protection equipment / systems: Available.

Boiler & Machinery / Machinery Breakdown / Engineering

• Wordings:
  UK and U.S. forms followed. Inspections are not mandatory.

General / Public Liability

• Available Wordings:
  Comprehensive forms available and can be endorsed to include Product Liability, Contingent Automobile Liability and Employer’s Liability.
• Comments:
  Product Recall cover is not available in the Colombian market. Policies are issued on an occurrence basis.

Automobile / Motor

• Compulsory Limits:
  Minimum Bodily Injury CP750,000. Medical Payments CP200,000.
• Comments:
  Insured and any licensed individual driving with Insured’s permission are covered. Passengers are deemed to be Third Parties. Own Damage is available - deductibles apply.

Workers’ Compensation

• Comments:
  All employees (including Maritime workers) are protected by the Social Security Scheme. Extra-Territorial Benefits are available. Medical Expenses and Occupational Disease coverage is included. Employees have the option to sue. Death Benefits are also included.

Marine

• Available Wordings:
  Cargo rates are subject to local tariffs. Coverage for imports must be written by locally admitted Insurers. War risks follow London scale.

Crime

• Available Coverages:
  Fidelity and surety bonds use local wordings. Free tariff rates apply.