The impact of Covid-19 on the global insurance industry – Argentina
Pablo S Cereijido
Marval O’Farrell Mairal, Argentina
psc@marval.com
Elias F Bestani
Marval O’Farrell Mairal, Argentina
efb@marval.com
Argentina | |||
General questions | Yes/ No/ N/A | Additional comments, if any. | |
1 | Does the country that you are reporting on follow common law jurisprudence? | No | The rulings of the federal Supreme Court of Justice (the CSJN from its acronym in Spanish) and certain other appellate courts carry persuasive authority and are generally followed by lower courts. |
2 | If the answer to the above question is no, does the country you are reporting on follow a civil code? Please describe the judicial system in short. | Yes | The original Civil and Commercial Codes were repealed and replaced by a unified Civil and Commercial Code (CCCN), which came into force on 1 August 2015. It contains the main legislation relating to private law and contract law. Its provisions apply throughout Argentine territory. Since Argentina has a federal system of government, its judicial system is divided into the federal judiciary and the local judiciary of each of the 23 provinces, plus the City of Buenos Aires. The CSJN is the highest court in the Argentine judicial system and its intervention is in principle reserved for matters in which it has original jurisdiction pursuant to the Argentine Constitution, such as those involving foreign ambassadors, ministers and consuls, disputes between provinces, or exceptional federal cases in which it exercises ordinary or special appellate jurisdiction. Federal courts have jurisdiction over disputes based on federal matters referred to by the Argentine legislative branch and the Argentine Constitution (eg, maritime and aviation cases). Provincial courts deal with either cases based on local laws or with those based on non-federal laws (eg, the CCCN and the Insurance Law). Within the City of Buenos Aires, there are federal courts and others known as national courts. Federal courts are organised into lower courts and courts of appeal for each subject matter (eg, civil, commercial, administrative and criminal law). National courts resolve non-federal legal disputes. There are also courts in the City of Buenos Aires which deal exclusively with local legal matters. In the City of Buenos Aires and many other provinces, before filing a judicial complaint, most disputes must be submitted to pre-trial mediation. |
3 | Please provide a brief description of the legal framework applicable to insurance coverage disputes in the country you are reporting on. In so doing, please consider the following questions: | N/A | The main legislation applicable to insurance coverage disputes includes: Insurance Law 17,418 (IL), which regulates insurance contracts; and the CCCN, which provides a general legal framework, especially on private law, contract interpretation, statute of limitations, among other general legal principles. There are also other laws with specific insurance provisions, such as: Navigation Law 20,094, governing marine insurance; Aeronautical Code, providing for certain mandatory aviation cover; and Labour Risks Law 24,557, which governs employers’ liability and entities and products covering that liability. Finally, we should mention the Consumer Protection Law 24,240 (LDC), which focuses on protecting consumers throughout the different contractual phases, including advertising. Although the LDC does not specifically regulate insurance relationships, it has been applied by Argentine courts to insurance covers where a consumer relationship is deemed present. |
4 | Does the insured bear the burden of establishing coverage of a claim, or does the insurer bear the burden of establishing no coverage? Please give a short description of the legal basis in your country. | N/A | Since the IL does not establish who has the burden of proving whether a claim should be covered, general provisions apply. Under the CCCN both the party which claims to have suffered a damage and the party which alleges to be exempt from liability bear the burden of proving their allegations. Therefore, the insured should prove coverage under the contract and the insurer should prove lack of coverage. In addition, judges are entitled to shift the burden of proof if a party is better suited to produce evidence over a given disputed issue (sections 1,734–1,736). Furthermore, when applicable, the LDC sets the rules for the proceeding to be conducted by the consumers protected by these provisions. According to Section 53, suppliers (insurers) must provide all the available evidence in its possession and be as collaborative as possible in clarifying the claim. |
5 | Are coverage provisions in policies interpreted broadly or is there a presumption in favour of coverage? Please give a short description of the legal basis in your country. | N/A | The IL does not provide guidelines on the interpretation of policies provisions. However, Section 11-2 provides that the insurer must deliver to the policyholder a ‘clear and easy-to-read’ policy. Argentine scholars and case law have generally considered that insurance policies must be interpreted in the exact same sense that they have been written as long as they are clear and easy to read. Otherwise, both the CCCN and the IL would merit a contra proferentem construction (ie, a construction normally in favour of the insured). |
6 | Are exclusions interpreted narrowly or is there a presumption against finding that an exclusion to coverage applies? Please give a short description of the legal basis in your country. | N/A | See guidelines described in the response to Question 5. |
7 | Are there universally accepted definitions for:
If the answer is yes, please give a short description of each definition and the legal basis for that definition (ie, a rule of law, case law etc). | N/A | The IL does not provide definitions of the specified terms. Their definition would basically depend on the policy provisions. The CCCN provides the following definitions of: damage There is damage when a right or an interest not disapproved by the legal system is injured, which has as its object the person, the property, or a collective interest (Section 1,737). force majeure An event that could not be foreseen or that, having been foreseen, could not be avoided. Force majeure exempts from liability, except as otherwise provided. Force majeure (fuerza mayor) and fortuitous event (caso fortuito) are used as synonyms in the CCCN (Section 1,730). Insurance policies may, and usually do, adopt other specific definitions for these and other terms. |
Loss causation | Yes/No/ N/A | Additional comments, if any. | |
8 | Did the country that you are reporting about issue lockdown, stay-at-home or no-travel restrictions in response to Covid-19? | Yes | Restrictions have been issued since March 2020. |
9 | If the answer to the question above is yes, were such orders issued nationally, by state/region or by local city/town. Please give a short description of the issuing authority and the orders issued. | N/A | At the start of the pandemic the federal government issued restrictions, which were mandatory for all provinces (including for the City of Buenos Aires, which is a district of federal jurisdiction). As the pandemic continued, the federal government set the general framework, which provided minimum safety measures. These measures could be tightened or lifted by the different local authorities depending on the number of positive Covid-19 cases. At the outset the federal government declared a national health emergency and suspended all flights arriving from certain foreign countries. Restrictions to entering Argentine territory were issued for Argentine and foreign residents. Public events and school attendance were also suspended. On 20 March 2020 a ten-day lockdown period was introduced, which was subsequently extended several times. Different essential services were gradually taken out of lockdown. |
10 | If the answer to the above question is yes, were the lockdown, stay-at-home or no-travel restrictions mandatory or recommended? | N/A | Restrictions were mandatory. |
11 | If the country that you are reporting about did issue lockdown, stay-at-home or no-travel restrictions, were those orders suspended or revoked at any point in time? If the answer is yes, please give a short description of the timeline. | Yes | Lockdown measures were gradually revoked depending on the number of reported Covid-19 cases in each province and the capacity of their health systems. 19 March 2020: the federal government announced strict lockdown measures which were mandatory for all provinces. These measures were extended until 26 April. Between that date and 10 May 2020, restrictions were only in force in cities with more than 500,000 inhabitants. 11 May 2020: lockdown measures were extended and in force only for the City of Buenos Aires and some districts of the Province of Buenos Aires (which together with the City of Buenos Aires are generally referred to as ‘AMBA’). These measures were extended until 7 June 2020. The rest of the provinces were under varying degrees of lockdown measures. The federal government gradually excluded some activities from the restrictions. 8 June 2020: strict restrictions applied only in cities with considerable number of Covid-19 cases or large cities. Only AMBA and four other districts continued under lockdown measures. Social-distancing measures were issued for the rest of the country. During this period, social meetings and open-air sport was allowed. 18 July 2020: further activities were excluded from restrictions. Lockdown measures were still in force in AMBA and in four different provinces due to the number of Covid-19 cases. 12 October 2020: social meetings of up to ten people were allowed. AMBA and eight provinces were still under lockdown measures. 9 November 2020: for the first time since March 2020, lockdown was revoked for AMBA, and social-distancing measures adopted instead, along with health protocols. In early 2021 the federal government decided to continue with social-distancing measures. Further measures were enacted in 2021. 26 March 2021: following the discovery new Covid-19 variants, the federal government decided to suspend flights from Brazil, Mexico, Chile and the United Kingdom. 14 April 2021: due to the rapid increase in Covid-19 cases, the federal government banned social activities, curfewed cars from the road at night, and closed shopping centres. 22 May 2021: strict lockdown measures were issued due to the high rates of Covid-19 cases. These new restrictions were mandatory for cities with high epidemiologic risk. Most of these measures remained in force until 6 August 2021. 7 August 2021: lockdown measures were revoked and most commercial activities permitted. The federal government set out a list of restrictions relating to the number of people authorised to attend certain activities. 1 October 2021: restrictions were gradually lifted and the number of people allowed to meet increased. Different protocols and restrictions were established for the fully-vaccinated. These measures remained in force until 31 December 2021. Most restrictions have been lifted although the Omicron variant or other variants are being closely monitored and could lead to the introduction of new sanitary measures. |
12 | If the answer to the above question is yes, were subsequent lockdown, stay-at-home, or no-travel restrictions issued at any point in time? Please give a short description of the timeline. | Yes | Please the response to Question 11. |
13 | Has the country that you are reporting about issued judicial opinions or guidance analysing whether Covid-19 is a ‘cause’ of insured loss? | No | We answer this question to the best of our knowledge of published cases in leading law journals. Argentina is a federal country with various court systems so only a fraction of the judicial rulings are published. |
14 | Has the highest court in the country you are reporting about issued judicial opinions or guidance analysing whether Covid-19 is a ‘cause’ of insured loss? If the answer is yes, please give a short description of the conclusions in the judicial opinions or guidance. | No | |
15 | If the answer to the question above is yes, did the highest court in the country you are reporting about determine that losses related to Covid-19 were ‘caused’ by the virus? Please give a short description of the conclusions in the judicial opinions or guidance. | N/A | |
16 | If the answer to the above question is no, did the highest court in the country you are reporting about determine that losses related to Covid-19 were ‘caused’ by government lockdown or stay-at-home orders? Please give a short description of the conclusions in the judicial opinions or guidance. | No | |
17 | Has the country that you are reporting about issued judicial opinions or guidance analysing whether Covid-19 is an ‘originating cause’ of insured loss? If the answer is yes, please give a short description of the conclusions in the judicial opinions or guidance. | No | See the response to Question 13. |
18 | If the highest court in the country you are reporting about has not issued judicial opinions or guidance analysing whether Covid-19 is a ‘cause’ of insured loss, have other courts in the country issued such opinions? | No | See the response to Question 13. |
19 | If the answer to the above question is yes, have courts in the country you are reporting on interpreted this issue consistently? In other words, is there uniformity in jurisprudence as to whether Covid-19 is a ‘cause’ of insured loss? Please give a short description of the conclusions in the judicial opinions or guidance. | N/A | |
20 | If the answer to the above question is yes, do courts in the country you are reporting about hold that losses related to Covid-19 were ‘caused’ by the virus? Please give a short description of the conclusions in the judicial opinions or guidance. | No | See the response to Question 13. |
21 | If the answer to the above question is no, do courts in the country you are reporting about determine that losses related to Covid-19 were ‘caused’ by government lockdown or stay-at-home orders? Please give a short description of the conclusions in the judicial opinions or guidance. | No | See the response to Question 13. |
22 | Has the highest court in the country you are reporting about issued judicial opinions or guidance analysing whether Covid-19 is an ‘originating cause’ of insured loss? | No | |
23 | If the highest court in the country you are reporting about has not issued judicial opinions or guidance analysing whether Covid-19 is an ‘originating cause’ of insured loss, have other courts in the country issued such opinions? If yes, please give a short description of the conclusions in such judicial opinions or guidance. | No | See the response to Question 13. |
24 | Has the country that you are reporting about issued judicial opinions or guidance analysing whether Covid-19 is a covered ‘event’? | No | See the response to Question 13. |
25 | Has the highest court in the country you are reporting about issued judicial opinions or guidance analysing whether Covid-19 is a covered ‘event’? Please give a short description of the conclusions in the judicial opinions or guidance. | No | |
26 | If the answer to the question above is yes, did the highest court in the country you are reporting about determine that losses related to Covid-19 were covered ‘events’? Please give a short description of the conclusions in the judicial opinions or guidance. | No | |
27 | If the highest court in the country you are reporting about has not issued judicial opinions or guidance analysing whether Covid-19 is a covered ‘event’, have other courts in the country issued such opinions? | No | See the response to Question 13. |
28 | If the answer to the above question is yes, have courts in the country you are reporting on interpreted this issue consistently? In other words, is there uniformity in jurisprudence as to whether Covid-19 is a covered ‘event’? Please give a short description of the conclusions in such judicial opinions or guidance. | N/A | |
29 | If the answer to the above question is yes, do courts in the country you are reporting about hold that losses related to Covid-19 are covered ‘events’? Please give a short description of the conclusions in the judicial opinions or guidance. | No | See the response to Question 13. |
30 | If the answer to any of the above questions regarding your country’s jurisprudence was no, please comment on whether there are any other official sources or authorities that have issued contributions to the interpretation of Covid-19 in the context of loss causation. | N/A | Under Resolution No 275/2021, the Superintendence of Insurance (the Superintendencia de Seguros de la Nación or SSN) approved two clauses clarifying the definition and the extension of a ‘transmissible disease’, which may be used by the market with no prior SSN approval. While the first one is applicable to fire, transport of goods, technical and surety insurance policies, the other applies to civil liability policies. Both define ‘transmissible disease’ as any disease which can be transmitted from one organism to another by any substance or agent. Such substance or agent can be any virus, bacteria, parasite, or any related variant, transmitted directly or indirectly through the air, bodily fluids from or to a surface, object or between organisms. This disease must be able to cause physical injuries, illnesses, or health damages (and in the case of fire, transport of goods, technical and surety insurance policies, also to property, loss of value or impossibility to sell or use). Furthermore, under Decree No 367/2020, Covid-19 related illnesses are, prima facie, considered an occupational disease and must be covered by labour risk insurers. Coverage only applies to employees in essential services, excluded from lockdown measures. |
Aggregation of claims | Yes/ No/ N/A | Additional comments, if any. | |
31 | Does the country you are reporting on permit aggregation of claims arising out of a single originating cause? Please give a short description of the legal basis. | Yes | Neither the IL nor the CCCN contains any provision regarding the possibility of aggregation of claims. They are therefore permitted prima facie, however it must be determined on a case-basis analysis. |
32 | Does the country you are reporting on permit aggregation of claims arising out of a single cause? Please give a short description of the legal basis. | Yes | The response to Question 31 applies. |
33 | Does the country you are reporting on permit aggregation of claims arising out of a single event? Please give a short description of the legal basis. | Yes | The response to Question 31 applies. |
34 | Does the country you are reporting on use an accepted test for determining whether claims can be aggregated? For example, does the country you are reporting on apply to four unities test to determine whether aggregation is appropriate? Please give a short description of the legal basis. | No | There is no one accepted test in our jurisdiction and the issue is not as developed as in other jurisdictions. In the end, the test to be used will depend on the policy wording and the contract construction rules. |
35 | Have courts in the country you are reporting on issued jurisprudence concerning whether insureds can aggregate claims arising out of Covid-19? Please give a short description of the legal basis. | No | See the response to Question 13. |
36 | Has the highest court in the country you are reporting about issued judicial opinions or guidance concerning whether insureds can aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance. | No | |
37 | If the answer to the question above is yes, did the highest court in the country you are reporting about determine whether insureds can aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance. | N/A | |
38 | If the highest court in the country you are reporting on has not issued such jurisprudence, have other courts in the country you are reporting on interpreted this issue consistently? In other words, is there uniformity in jurisprudence as to whether insureds may aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance. | No | See the response to Question 13. |
39 | If the answer to the above question is yes, do courts in the country you are reporting about permit insureds to aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance. | N/A | |
40 | Do the courts in the country you are reporting on permit an insured to aggregate claims related to multiple properties or business locations arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance. | Yes | Yes, to the extent so provided in the policy. See the responses to questions 13 and 34. |
41 | Do the courts in the country you are reporting on permit an insured to aggregate claims related to multiple lockdown or stay-at-home orders arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance. | Yes | See the response to Question 40. |
42 | Have courts in the country you are reporting on issued jurisprudence concerning whether cedents can aggregate claims arising out of Covid-19? Please give a short description of the legal basis. | No | See the response to Question 13. |
43 | If the answer to the above question is yes, have courts in the country you are reporting on interpreted this issue consistently? In other words, is there uniformity in jurisprudence as to whether cedents may aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance. | N/A | |
44 | If the answer to the above question is yes, do courts in the country you are reporting about permit cedents to aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance. | N/A | |
45 | If the answer to any of the above questions regarding your country’s jurisprudence was no, please comment on whether there are any other official sources or authorities that have issued contributions to the interpretation of Covid-19 and aggregating claims. | No | |
Property damage | Yes/ No/ N/A | Additional comments, if any. | |
46 | Have courts in the country you are reporting on issued jurisprudence concerning whether losses arising from Covid-19 qualify as property damage losses? Please give a short description of the legal basis. | No | See the response to Question 13. |
47 | Has the highest court in the country you are reporting about issued judicial opinions or guidance concerning whether losses arising from Covid-19 qualify as property damage losses? Please give a short description of the conclusions in such judicial opinions or guidance. | No | See the response to Question 13. |
48 | If the answer to the question above is yes, did the highest court in the country you are reporting about determine whether losses arising from Covid-19 qualify as property damage losses? Please give a short description of the conclusions in such judicial opinions or guidance. | N/A | |
49 | If the highest court in the country you are reporting on has not issued such jurisprudence, have other courts in the country you are reporting on interpreted this issue consistently? In other words, is there uniformity in jurisprudence as to whether losses arising from Covid-19 constitute property damage? Please give a short description of the conclusions in such judicial opinions or guidance. | No | See the response to Question 13. |
50 | If the answer to the above question is yes, do courts in the country you are reporting about permit insureds to aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance. | N/A | |
51 | If the answer to any of the above questions regarding your country’s jurisprudence was no, please comment on whether there are any other official sources or authorities that have issued contributions to the interpretation of Covid-19 and property damage. | No | |
Exclusions | Yes/ No/ N/A | Additional comments, if any. | |
52 | Has Covid-19 been deemed a ‘natural peril’ in the country you are reporting on? Please give a short description of the legal basis and relevant jurisprudence. | No | See the response to Question 13. |
53 | Has Covid-19 been deemed force majeure in the country you are reporting on? Please give a short description of the legal basis and relevant jurisprudence. | No | See the response to Question 13. |
54 | Is Covid-19 acknowledged as a notifiable disease in the country you are reporting on? Please give a short description of the legal basis and relevant jurisprudence. | N/A | Covid-19 is considered prima facie an occupational disease for employees in essential services, excluded from lockdown measures, under labour risk policies in accordance with Decree No 367/2020. Under Resolution No 38/2020 of the Ministry of Labour, insured workers must notify their labour risk insurer and provide a certificate of a Covid-19 positive test granted by an authorised medical centre, a job description, and a certificate of exception to lockdown measures issued by their employer. |
55 | Is it common for insurance policies issued in the country you are reporting on to include a pandemic or virus exclusion? Please give a short description of the legal basis and common insurance practice. | Yes | Although a case-by-case analysis should be undertaken, some policies do include clauses regarding pandemic exclusions and/or virus exclusions. See also the response to Question 30. |
56 | Have any courts in the country you are reporting on determined that a pandemic or virus exclusion is void as against public policy in the context of Covid-19? Please give a short description of the legal basis and relevant jurisprudence. | No | |
57 | Have any courts in the country you are reporting on otherwise determined that a pandemic or virus exclusion is unenforceable in response to Covid-19? Please give a short description of the legal basis and relevant jurisprudence. | No | |
58 | If the answer to any of the above questions regarding your country’s jurisprudence was no, please comment on whether there are any other official sources or authorities that have issued contributions to the interpretation of Covid-19 in the context of exclusions. | Yes | Under Resolution No 275/2021, the SSN approved two clauses clarifying the definition and the extension of a ‘transmissible disease’. Please refer to the response to Question 30. |
Regulatory oversight | Yes/No/ N/A | Additional comments, if any. | |
59 | Have insurance regulators in the country you are reporting on issued directives concerning coverage for claims arising out of Covid-19? Please describe the regulations that have been implemented. | No | |
60 | Are regulators requiring or encouraging insurers to provide grace periods to insureds to make payments on premiums? If yes, please give a short description of the legal basis and relevant guidance. | No | Several collective actions have been brought by consumer associations claiming reimbursement of premiums paid under motor insurance during the lockdown period, on the basis that the reduced traffic circulation resulted in a reduction of the risk covered by insurers. |
Government action | Yes/ No/ N/A | Additional comments, if any. | |
61 | Has the government in the country you are reporting on implemented relief measures for losses sustained as a result of Covid-19? | Yes | Relief measures were not directly related to losses, but they helped bear the economic crisis created by the spread of Covid-19 cases. |
62 | If the answer to the above question is yes, are the relief measures available to both individuals and businesses? | Yes | The federal government has issued relief measures for both individuals and businesses. Some may equally apply for both. |
63 | Briefly describe the types of relief measures available to individuals and businesses. | N/A | The federal government implemented different measures to alleviate the impact of the economic crisis caused by the spread of Covid-19 and lockdown measures. Under Decree No 332/2020 the President created an ‘Emergency Assistance to Work and Productivity Programme’ (ATP) intended to benefit both employers and employees. The ATP programme benefits were:
The General Administration of Ports (AGP) made discounts of up to 50 per cent on port fees for the use of the Port of Buenos Aires by cargo ships and up to 100 per cent for cruise ships during the 2020-2021 and 2021-2022 cruise seasons, and up to 25 per cent during the 2022-2023 cruise. The AGP also extended the period of free cargo storage in the Port of Buenos Aires. Foreign trade measures were also issued. The federal government imposed measures to facilitate the process of importing goods related to the health emergency, such as simplifications in the import licensing regime, exceptions to prior interventions and exemptions on import duties. In contrast, some exports of essential goods were held back because of the sanitary emergency. Recently, the SSN suspended the processing of authorisations to operate as labour risk insurers and the processing of those in process for 180 days. According to the SSN, the suspension aims to protect the operation and solvency of authorised labour risk insurance companies in economic crises caused by compensation resulting from the spread of Covid-19. |