Law To End Insurance
Monopoly Passes
Commission Vote
The Tratado de Libre
Comercio (TLC) - free
trade agreement with the
United States - has put
a fire under
legislators, who are
working overtime before
the holiday recess and
the March 1, 2008,
deadline.
This weekend, the
legislators that make up
the Comisión Especial de
Seguros (special
commission on insurance)
worked all day Saturday,
ending their session at
an unprecedented 9:00pm
to discuss the proposed
legislation that would
end the monopoly on
insurance in the
country.
The legislators are
discussing the "parallel
law" that would become
part of the free trade
deal that would allow
foreign insures to
compete in the insurance
market, ending the
monopoly held by the
Instituto Nacional de
Seguros (INS),
The legislation received
seven votes in favour,
while all the deputies
of the Partido Acción
Ciudadana that make up
the commission, vote
against.
The narrow vote means
the proposal goes to the
full legislative floor
although the commission
members did not agree on
a number of details,
like the possibility of
the public banks allying
themselves with the INS
in selling insurance.
Another point that was
not cleared up is the
structure of the
organization that will
regulate the insurance
market in a competitive
environment.
One item that was set is
that any competing
insurance company has to
deposit a minimum us$3
million dollars with the
Banco Central de Costa
Rica as a guarantee
before it can offer its
insurance products. The
actual amount of the
guarantee deposit will
be determined by the
market share the
insurance company plans
to explore.
The Ley Reguladora del
Mercado de Seguros, once
passed, will be part of
the implementation of
the TLC.
Although the law would
open the insurance
market to foreign
companies and break the
monopoly held by the
INS, the commission did
agree that the INS will
continue to be only
insurance company in the
country to offer work
risk insurance and the
mandatory insurance on
all vehicles, as it does
now. |
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