Cuba Insurance Information

CIA link to demographic/economic data on Cuba

General Cuba Insurance Information

• Compulsory Insurance:
  
  1. Third Party Automobile Liability for foreign diplomats and other foreign residents;
  2. Third Party Liability for vehicles carrying either passengers or goods.
• Non-Admitted Insurance:
  The Foreign Investment Law states that insurance must be placed with locally registered companies. It is anticipated that the new Insurance Law will specifically prohibit non-admitted insurance without the prior approval of the Superintendent of Insurance. At present there are a few fronting carriers, and the only non-admitted insurances are in respect of global policies covering oil exploration by foreign companies.
• Policy Wordings & Rates / Tariffs Controlled:
  A Cuban jurisdiction clause may be included in policies where relevant and all wordings are subject to Cuban law. There are no tariffs, although private companies are required to file rates with the Superintendency.
• Policy Language:
  Spanish.
• Types of Insurance Restricted to Government Institutions:
  Hard to say – There are 3 state-owned companies – ESEN, writes local “social” insurance (such as Motor and Agricultural); ESICUBA, writes foreign currency business (such as Marine& Aviation) and is developing a Fire account; in 1996 a new insurer LA ISLA was formed to write business associated with the tourist trade.

Now the wrinkle: In late 1997, a new Insurance Law was enacted which permits the establishment of private insurers in Cuba which compete with the state owned companies.

• Policy Currency:
  Cuban Peso.
• Currency Restrictions / Exchange Controls:
  ? - Probable
• Policy Period:
  Annual. There are no Long Term Agreements (LTAs).
• Cancellation Provisions:
  Policies may be cancelled mid term by either party. Returns of premiums are on a short term basis if cancelled by the Insured, and on a pro rata basis if cancelled by the Insurer. There is no tacit renewal.
• Premium Taxes:
  Policies are subject to a 5 peso stamp duty. Insurance entities are required to apportion a .2% (direct) and .1% (Reinsurance) tax based on premiums collected. This tax is payable to the Superintendent of Insurance.
• Insurance Companies:
  3 State-owned insurers (as above) and an unknown number of private insurers.
• Brokers:
  The 1997 Insurance Law allows for operation of Brokers and Agents.
• Brokerage Commissions:
  
• Broker of Record Letters:
  Unknown.
• Coinsurance:
  
• Reinsurance:
  There is no local reinsurance market, nor is there any legislation in force covering the operations of insurers. ESICUBA acts as a reinsurers for the other 2 state companies. There is an understanding that ESEN and LA ISLA will reinsure their business with ESICUBA. There is therefore only one source of reinsurance for foreign reinsurers.
• Local Natural Hazards:
  Hurricanes.
• Other Information:
  

Property Insurance

• Fire:
  Basic fire perils include - fire, lightning. The are no exclusions other than War. Basic policy can be extended by endorsement to cover all insurable perils.
• All Risk:
  Negotiable.
• Coinsurance:
  100%.
• Blanket Insurance:
  Available.
• Business Interruption:
  Fire policy can be extended to cover Loss of Profits.
• Replacement Cost:
  Available.
• Discount for fire protection equipment / systems: Negotiable.

Boiler & Machinery / Machinery Breakdown / Engineering

• Wordings:
  While some machinery breakdown policies are stand alone, the majority are issued by endorsement to the Basic Fire policy. The wording is that of Munich Re.

General / Public Liability

• Available Wordings:
  Available, but not common except for the tourist industry. Product Recall coverage is available in the market.

Automobile / Motor

There is no statutory requirement for drivers of motor vehicles to have Third Party Liability in force, and in practice only a small percentage of vehicles are insured at all. Foreigners are required to have a minimum cover of CP 40,000 – CP 25,000 of which relates to Third Party BI and CP 15,000 to TP Property Damage. A No Claims Bonus system is in force whereby foreigners receive a 25% bonus after 1 year without a claim, followed by 30% after two years and a maximum of 35% after three years or more. For nationals, the scale is 25% 0 50%.

Workers’ Compensation

• Comments:
  Workers’ Compensation is part of the State Social Security scheme. ESICUBA does offer Employer’s Liability as an option under its Third Party Liability cover.

Marine

• Available Wordings:
  Marine Hull – ESICUBA has its own rating schedule. London War rates are followed. All Cuban fleets insured with ESICUBA have P&I cover.

Crime

• Available Coverages:
  Burglary usually written in conjunction with the Fire policy. Cover is generally limited to private dwellings and shops.