Venezuela Insurance Information

CIA link to demographic/economic data on Venezuela

General Venezuela Insurance Information

• Compulsory Insurance:
  
  1. Third Party Automobile Liability;
  2. Workers’ Compensation (Social Security Scheme).
• Non-Admitted Insurance:
  Prohibited except for Marine imports which can be covered under a foreign cargo policy subject to duties.
• Policy Wordings & Rates / Tariffs Controlled:
  Tariffs are set for Fire (property damage only), Automobile, Crimecoverages. Forms must be filed with the Superintendency of Insurance.
• Policy Language:
  Spanish.
• Types of Insurance Restricted to Government Institutions:
  Workers’ Compensation(Social Security).
• Policy Currency:
  bolivar (VEB). U.S. $ insurance available.
• Currency Restrictions / Exchange Controls:
  None known.
• Policy Period:
  Annual. Longer term policies are not allowed unless specific request is made of the Superintendency and approval given.
• Cancellation Provisions:
  Check policy for cancellation provisions.
• Premium Taxes, etc. paid by Insured:
  Value Added Tax (VAT) was reduced from 15% to 14% from August 2005. A tax of 1.55% is payable on all policies written in Caracas. Rates vary in other cities and areas of Venezuela but they are generally 1.25%. VAT does not apply to insurance policies. There are also no fire brigade charges.
• Insurance Companies:
  
• Brokers:
  Venezuela is a broker market. Brokers and Agents must be licensed and registered.
• Brokerage Commissions:
  Property Damage / Business Interruption - 30%;
  Automobile - 15%;
  Liability - 20%;
  Personal Accident - 25%.
  Commissions cannot be paid to foreign brokers not locally registered.
• Broker of Record Letters:
  Recognized by the market when either an Insurer or Broker is replaced.
• Reinsurance:
  No longer restrictions on outward facultative business providing it is first shown / offered to the local market. An income tax of 3% applies (net of expenses) on reinsurance for foreign reinsurers.
• Local Natural Hazards:
  Flood, landslide, earthquake.
• Other Information:
  

Property Insurance

Note: Property Damage Policies are mostly written on First Loss Basis (i.e., not to full value).

• Fire:
  Standard fire perils include - fire, lightning. Aircraft, explosion, earthquake, flood, storm / tempest, burst water pipe, riot / civil commotion, malicious damage, windstorm / hurricane, vehicle impact are available for an additional premium charge. Note: Boiler Explosion is not covered under the Fire (Property Damage) Policy.
• All Risk:
  Available for Contractor related risks following terms of international reinsurance market.
• Coinsurance:
  Buildings and Machinery - 20% +; Stock - 60% +.
• Blanket Insurance:
  Only when Total Sum Insured exceeds a specified amount.
• Business Interruption:
  U.S. Gross Earnings more common than UK Loss of Profits. Local wordings available.
• Replacement Cost:
  Available.
• Discount for fire protection equipment / systems: Negotiable (Fire tariff makes no allowance).

Boiler & Machinery / Machinery Breakdown / Engineering

• Wordings:
  U.S. and UK wordings form the basis of coverage. Boiler Explosion must be covered under one of these policies. It is not covered under the Fire policy. Machinery Breakdown and Business Interruption are available. Inspections are required of boilers and related pressure vessels. General / Public Liability
• Available Wordings:
  Comprehensive General / Public Liability forms available.
• Comments:
  Written on an occurrence basis and can provide coverage for Employer’s Liability, Product Liability, Hired and Non-Owned Automobiles, Contractual Liability, etc. Defense Costs are included.

Automobile / Motor

• Compulsory Limits:
  The required limits are impossibly low. Recommended limits on a combined basis are Bs1,000,000. Excess coverage is available.
• Comments:
  Passengers are not considered Third Parties. Passenger Liability coverage can be purchased separately. Coverage applies to the Insured and any licensed individual driving with the Insured’s permission.

Workers’ Compensation

• Comments:
  All employees (including Maritime workers) benefit from the Social Security Plan. Workers’ stationed abroad are included. Medical Expenses and Occupational Disease benefits are included.

Marine

• Available Wordings:
  U.S. and Institute of London Underwriters forms are available. War and Strikes risks rates follow London scale.

Crime

• Available Coverages:
  Fidelity, Burglary, Money & Securities, and Surety.