INSURANCE CLAIMS IN MEXICO

INSURANCE CONTRACT 1.Insurer shall be a company duly authorized to carry out business as an Insurer in accordance to Federal Regulations; 2.Insurance and Bonds Federal Commission (IBDC) is part of Mexican IRS, which regulates Insurance Matters, Permits and other related issues. * Consumers Protection issues are handled by CONDUSEF 3. Insurance Contracts are uniform contracts duly recorded before IBDC

REASONS TO GET INSURANCE IN MEXICO? (I) Comply with requirements of Landlord (if applicable) (II)Comply with requirements of Lender (III) Mitigate risks (IV) Comply with other contracts, JV, Agreements, etcetera.

General Conditions of Insurance Contract 1. Declaration Page: a. Data of Insured and/or Beneficiaries b. Term of the Insurance c. Premium and other expenses d. Type of Currency e. Total amount insured f. Data of Insurer and Co-Insurer (if applicable) g. Date and place of issuance h. Name of Insurance Package offered (if any) i. Policy Number j. Signature of Insurer’s official

General Conditions of Insurance Contract 1. Declaration Page: k. Type of coverage and amounts insured: * Natural Disasters * Fire on buildings * Fire on Contents * Consequential Losses * Theft * Machinery breakdown * Electronic Equipment breakdown

General Conditions of Insurance Contract 1. Declaration Page: m. Detail of Risks: Location of Facilities and Coverage for each location including deductibles n. Summary of Special Conditions Endorsements Others

INSURANCE CONTRACT General Clauses to be aware of: 1.Definitions 2.Co-Insurance (if any) and percentage of participation * Verify if Co-Insurer is duly registered before IBDC 3.Amounts insured and deductibles 4.Exclusions 5.Currency Type 6. Procedures for Insurance Claims

PROCEDURES FOR INSURANCE CLAIMS 1.Generally, the procedures are defined under the Insurance Contract. 2. Typical procedure: a) Obligation: Insured is bounded to carry out all acts require to prevent or reduce damage. Sanction are provided under Federal Insurance Contract Act (reduction of indemnification or even lost of indemnification. b) Notice of Event: Insured is bounded to provide notice of event occurred within 24 hours after knowledge of event, except if force majeure or Acts of God occur. (reductions may apply if notice is not provided in time)

PROCEDURES FOR INSURANCE CLAIMS c) File criminal complaint before State Public Prosecutor to initiate investigation, in any case other than natural disaster. Certified copies may be required by Insurer. d) Movement of goods: Insured is entitled (generally without providing notice to Insurer) to move goods to other uninsured facilities, in order to protect them from further loss or damage. * Recommendation: Carry out a certification of facts through Notary Public, whereby it is witnessed the conditions of all goods, buildings and other properties after the event (when is safe), and procedures performed during movement of goods.

PROCEDURES FOR INSURANCE CLAIMS e) Documents, data and reports to be provided: Insured shall prove accuracy of claim. Generally documents to be provided are: i. Statement of damages caused, including detailed list of goods destroyed, lost or damaged, and also amount of damage, taking in consideration the value of the goods at the time the event took place ii. List of all insurances contracted on goods (mandatory under law) iii. All drawings, projects, books, receipts, invoices, minutes and any other document needed to support claim iv. All data related to the origin and cause of damage, including certified copies of investigations practiced by Public Prosecuting Agency or any other authority with jurisdiction (Fire Fighters Department).

PROCEDURES FOR INSURANCE CLAIMS f) Expert Witness Opinion: Is used in case Insured and Insurer do not reach an agreement with respect total amounts of losses or damages. Both parties are generally entitled to designate an Expert Witness by each side. Both expert witnesses will appoint a third one, in case both expert witnesses arrive to different conclusions. Each party bears its expert witness expenses. g) If no exclusions are applied by Insurer, it will pay indemnification according to mutual agreement reached by insurer and insured or conclusions from Expert Witnesses.

OTHER TASKS TO BE CONSIDERED A)Firefighters Department.- Follow up investigation of cause of event (fire). Municipal Government may impose fines for environmental damages caused, or for lack of security measurements. B) Customs.-In case that goods (raw materials, equipment, etc.) DESTROYED and located in your facilities are under a Temporary Import Entry Permit, your Company shall: i.Provide written notice to Customs Authorities about event occurred including: * Description of machinery, equipment and raw materials that were lost, import permit number and invoice; * Certified copy of public prosecution investigation/fire fighters (in case of a fire) * Notice to be provided within next 2 days after the following date of event.

OTHER TASKS TO BE CONSIDERED INSURER’S DEFAULT A)First, Insured shall file an action before CONDUSEF (National Commission for Protection of Financial Services Users’ Rights) * Appear to mediation hearings * If both parties agree, they may submit case to arbitration (not mandatory) B) If no arrangement is reached, Insured then may be entitled to file a lawsuit against Insurer before courts in jurisdiction appointed under the Insurance Contract.

Thank you!! Jonathan Alvarez Associate Attorney LLM in Comparative Law University of San Diego School of Law (Student)