Summary of General Legal Aspects of Insurance in El Salvador
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ScribdTranslationsSummary of General Legal Aspects of Insurance in El Salvador
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GENERAL ASPECTS OF INSURANCE IN EL SALVADOR
Background
"Since its origins, the human race has always sought security, well-being and
happiness. She has always been protective of her belongings and has used all the
security measures within your reach to achieve your goals
In El Salvador, insurance is relatively new, the first companies that operated in
the insurance market was foreign and the first of them was the 'Palantine Insurance'
In 1906, and it was not until the year 1915 that the first company was founded.
Salvadoran insurance company 'La Centroamericana, S.A.' with a capital of 100,000.00 colones.
This company started its operations solely in the life sector, an activity in which
it remained until the year 1914 when they incorporated the field of damages into their activities, to
to constitute itself as the first comprehensive national in all branches of insurance and finance
The companies that are authorized to operate as insurance companies and
finances as of 2012 are as follows:
Commercial Agricultural Insurance Company, S.A.
Popular Insurance, S.A.
Swiss Salvadoran insurer
Scotia Insurance, S.A.
Bolívar Commercial Insurance, Inc.
The insurance and finance company, S.A.
Central America, Inc.
Pan America Life Insurance Company (El Salvador branch)
Pacific Insurance, Inc.
Insurance and Investments, Inc.
AIG Insurance, El Salvador, S.A.
Future Insurance, A.C. de R.L.
Vivir Insurance Company, S.A. personal insurance
AIG Life, Inc. personal insurance
SISA, VIDA, S.A. personal insurance
Bolívar Insurance, S.A. personal insurance
ASESUISA life, s.a. personal insurance
Qualitas insurance company, S.A.
ASSA insurance company, S.A.
ASSA life insurance company, S.A. personal insurance
Progreso, S.A. personal insurance
Definition of insurance companies
Insurance companies are the companies that operate in insurance, reinsurance, finance.
and consolidation in the country according to Article 2 of the insurance companies act.
Importance of insurance
In the face of the great material and human losses caused by natural disasters,
economies have suffered setbacks, which the insurance companies have mitigated
through the instrument of insurance once the events covered in the
policy; with which insurance companies participate, collaborate, and advise clients
(insured) providing options for insurance, covered risks, premiums, etc.
Characteristics of insurance companies
Insurance entities in order to face the risks arising from their activities
they must have sufficient financial resources and consequently the legislation provides them
imposes a certain restriction.
Definition
Article 1352 of the commercial code states 'By the insurance contract, the company
the insurer is obliged, through a premium, to compensate for a damage or to pay an amount of
money upon the occurrence of the event provided for in the contract.
General characteristics of the insurance contract
Consensual 5. personal
2. Bilateral 6.unique
3. Random 7. conditional
In good faith 8. On adhesion
Elements of the insurance contract
The insurer: only joint-stock companies can act as insurers.
The insured: the law distinguishes between the policyholder, the insured, and the
beneficiary.
Obligations arising from an insurance contract.
. Pay the premium
. Report the state of risk
. Report the aggravation of risk
. Report the incident
. Salvation
Obligations of the insurer.
Reimburse expenses: you must reimburse the expenses incurred in compliance with the
salvage obligations, as long as they have not been manifestly incorrect or
unnecessary.
Pay the compensation: it is determined according to the type of insurance contracted, the
effectively suffered damage and the insured amount.
Classification of the Lines of Business marketed by Insurance Companies.
Insurance offered by insurance companies can be classified in various ways.
First of all, depending on whether the states are in charge, in their role of guardianship or activity
private insurer, it is divided into social insurance and private insurance.
Private insurance: Theft and Burglary Insurance
Personal insurance: Electronic Equipment Insurance
Life Insurance. Residence Insurance
Personal Accident Insurance. Transportation Insurance.
Hospital Medical Insurance. Automobile Insurance.
General Insurance. Social security
Fire Insurance.
Legal Aspects.
Tax Code.
Insurance companies must comply with the regulatory legal framework established by the
Tax Code regarding formal obligations as taxpayers
Payment or Advance on Account of the Tax.
Insurance Companies, when operating as a corporation and conducting activities
merely commercial, is obliged to make the payment or advance payment in a
amount of 1.75% on the income earned during the assessment period, from the
Failure to comply will incur fines and interest according to Article 151 of the Tax Code.
Income Tax Law.
Its purpose is to prescribe the tax treatment of operations related to the
obtaining taxable and non-taxable income, as well as deductible and non-deductible expenses
deductibles.
Law on the Tax on the Transfer of Movable Goods and the Provision of Services.
According to this tax, all operations are considered service provision.
onerous transfers of tangible movable assets.
Commercial Code.
The insurance companies established in El Salvador must organize and operate in
form of indefinitely term corporations... according to this article 4 of
The insurance companies law will apply disclosures from the commercial code that are not
are regulated under the insurance companies law but being established
as corporations will be applicable to them
The law of supervision and regulation of the financial system.
According to decree number 592 dated February 4, 2011, published in the official journal 23
Law number 390 dated February 2, 2011, is created and transcribed to
continuation of the articles regarding the composition of the supervisory system and
financial regulation, the functions of the superintendency of the financial system,
the regulated entities among which are the insurance companies, the role played by the
central bank regarding the technical regulations used and the validity of the regulations
existing at this moment.
Insurance Companies Law
The law arises to regulate the insurance activity, the insurance companies and the
Protection of insurance buyers.
Ownership and transfer of shares in insurance companies
According to Article 6, the ownership of the shares of insurance companies established in El
Salvador must maintain at least 75%, either individually or jointly.
Payment for the shares: Capital contributions must be paid in full in cash, except for
that the superintendent authorizes the capitalization of the obligations
Application of profits: At the end of each annual period, insurance companies
they will retain from their profits, after a legal reserve, an amount equivalent to the
amount of the pending net collection products from the sanitation reserve.
Basic operations of insurance companies: General insurance companies
they will exploit damage, accident, and health insurance, including medical
hospital
REGULATION OF THE INSURANCE COMPANIES LAW
The specific function of the regulation is to develop and complete those
provisions of the law.
Insurance intermediaries
Art.34 - insurance intermediaries, insurance brokers, agents
independent agents and dependent agents.
They are insurance brokers who are established as legal entities; they are agents.
independent of natural persons who operate based on commercial contracts; and
they are dependent agents the natural persons linked by an employment contract to
some of the aforementioned intermediaries.
