Introduction

The National Commission for the Protection and Defence of Users of Financial Services (CONDUSEF) recently issued the General Provisions for the Registration of Insurance Adhesion Contracts, which regulate the organisation and operation of the Registry of Adhesion Insurance Contracts (RECAS).

‘Adhesion contracts’ are non-negotiable insurance contracts which are offered by insurers and accepted ‘as is’ by insureds seeking the corresponding coverage.

Insurers can now comply with their obligation to register the non-negotiable contracts that they offer, as required by:

• the Insurance and Bonds Companies Law, enacted in April 2015; and
• the General Provisions on Good Practices, Transparency and Advertising applicable to Insurance Companies, enacted in December 2015.
  RECAS

CONDUSEF will maintain RECAS. The registry’s main purpose is to enable the general public to access the terms and conditions of the products that insurers offer by way of adhesion contracts, as well as the corresponding contractual documentation. As such, customers will now have the advantage of being able to compare the products that insurers offer for a type of coverage by way of RECAS.

According to the new rules, insurers must register on RECAS – via the CONDUSEF web portal – the contractual documentation pertaining to adhesion contracts that have already been registered with the National Insurance and Bonds Commission (CNSF). Registration is required before the products can be offered.

Insurers that do not offer insurance products by way of adhesion contracts must inform CONDUSEF of this through RECAS.

CONDUSEF may verify that insurers offer only the contractual documentation that has been registered with RECAS.

Registration in RECAS must be undertaken within 180 calendar days from November 16 2016. Thus, all adhesion contracts must be registered by May 15 2017, as follows.

Once registration is complete, insurers must include the registry numbers granted by the CNSF and CONDUSEF in the corresponding adhesion contract and contractual documentation. Insurers whose adhesion contracts and contractual documentation are already printed may ask CONDUSEF for additional time to replace the contracts and corresponding documentation, so that they can include the registry number.

Penalties

Insurers that fail to comply with these obligations will be subject to a fine ranging from $758.31 to $3,791.56, without prejudice of other penalties.