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Jornada Colombiana – How to do business in Colombia University of St
Jornada Colombiana – How to do business in Colombia University of St. Gallen, 28th March, The perception of the Colombian legal system by foreign companies. The special case of insurance law and practice. Claudia Challand
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Why is insurance relevant for economic growth?
Indicator of economic performance Supports development of key sectors Protects financial standing of developer Provides cover for NATCAT events Jornada Colombiana - How to do business in Colombia | University of St Gallen March 28th, 2017 2
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Insurance contribution to Colombia’s growth 4G infrastructure expansion program Insurance cover is required by ANI and foreign banks Surety Bonds – delays / advance payments Civil Works – physical damages Third Party Liability Insurers may also play an active role during the project
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Foreign presence in the Colombian insurance market - Open market for international companies New players increasing significantly - Current market share of 63% and growing
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Foreign presence in the Colombian insurance market
Sophisticated insurance market Regulator focused on solvency and liquidity of players General economic growth over the past decade and promising Steady increase of premiums Attractive market for global insurers looking for profitability
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Other factors contributing to insurance sector’s grown
I. Sound legal framework -Commercial Code, 1971 (Section 4, Title V) – governs insurance contracts -English Insurance law recently codified - now mirrors Colombian legislation Insurance Act 2015 & Enterprise Act 2016 Insurer has a duty to pay indemnity within time frame/or penalty interests Graded remedies upon unfair presentation of the risk by the insured Contract no longer avoided for breach of warranty if it is unrelated to loss
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II. Alternative Dispute Resolution Mechanisms/ADR
Developed domestic & international arbitration Required for complex disputes where specialisation is needed List of national arbitrators appointed also internationally Convenient venue Modern and comfortable facilities for parties and arbitrators
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III. Tackling challenges in the judicial system
Concerns from the Ibero-american Court of Human Rights Congestion of court rooms & lengthy proceedings Now - with adoption of oral procedural system Hearings suspended only twice Parties closer to the judge No revision of lengthy pleadings Agility Challenges Training Ensure proper consideration of arguments and evidence Continuing investment in systems and infrastructure
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Swiss Re CorSo in Colombia - CorSo – direct insurance arm of Swiss Re Group - Acquisition of a majority stake holding in Confianza Seguros - Long standing insurer in infrastructure and public sector branches fostering penetration - Combined capabilities and expertise Commitment to Cover Public Sectors’ Risk -Contingent liability coverage – funds to citizens in case of NATCAT events -Publi-Private sector partnerships to cover natural risks – discussed at COP21 in Paris -Swiss Re is on track in aid to sovereign nations
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Conclusions Colombia left behind negative image with foreign investors operating in the insurance sector Infrastructure projects and significant investments in mining and energy are supported by global insurers with a promising outlook Sound and transparent legal framework; measures adopted to foster ADR mechanisms and improvement in the judicial system contribute to growth Swiss Re has a permanent commitment to the country
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