Insurance contract

The insurance contract (also, insurance contract) is the agreement by which the insurer undertakes to to compensate for damage or to pay a sum of money to the other party, the policyholder, upon verification of the eventuality provided for in the contract, in exchange for payment of a price, called a premium, by the policyholder. The insurance contract may have as its object all kinds of risks if there is an insurable interest, unless expressly prohibited by law.

The contracting party or policyholder, who may or may not coincide with the insured, for his part, undertakes to pay that premium, in exchange for the coverage granted by the insurer, which prevents him from facing damages greater economic, in case the accident occurs.

The insurance contract is consensual; The reciprocal rights and obligations of the insurer and the policyholder begin from the moment the agreement is signed, even before the "policy" or document that reflects the data and conditions of the insurance contract is issued.

Insurance

Insurance is the mechanism by which those who bear risks can transfer them to the insurer, who undertakes to indemnify them totally or partially for the losses that the risks may cause. When making an insurance contract, an attempt is made to obtain economic protection for goods or people that could suffer damage in the future.

Insurance has a double function: economic and social.

• Economic function: eliminates economic uncertainty about the future by achieving efficiency, stabilizes wealth, combats poverty and stimulates savings.
• Social function: stimulates prediction, contributes to the improvement of health.

Personal elements of the insurance contract

The following subjects are included in the contractual relationship:

The insurer

The insurance entity can be defined as «the legal person that constituted in accordance with the provisions of the corresponding legislation, is dedicated to assuming the risks of others, complying with what that legislation establishes for this purpose, through the perception of a certain price called cousin."

In the figure of the insurer, it is worth highlighting some specific profiles, among which we can appreciate the following:

• By legal necessity, it must be a legal person. It is not even occasional for someone who, individually, performs risk coverage operations. The conditions of operation of the insurance and its projection in time already require, by itself, that the insurer be a legal person;
• That person must have, precisely, some of the forms that the law considers only valid for the practice of the insurance industry;
• It must have previously deserved the approval of the Public Administration to act as an insurer;
• It should be devoted exclusively to the practice of insurance or reinsurance, where appropriate without the admissibility of other activities, except for the management of collective retirement funds;
• They must adjust their situation to the rules of the insurance legislation, which regulate in detail the insurance practice, while subject to the inspection and control of the public power.

Within the broad spectrum of possible legal persons, the following are admitted as valid assumptions:

• Anonymous Society.
• Mutua society at fixed premium.
• Social insurance models.
• Cooperative Society.

Insurance being an issue that affects the entire community, and that is directly connected to its well-being and whose essential basis is trust and credit. Entities that wish to act as insurers are required a double series of formalities, both legal and economic, obeying these of the entity that wants to be formed to provide insurance.

The Taker

The policyholder is the natural or legal person «that hires and subscribes the insurance policy, on its own account or on behalf of a third party, assuming the obligations and rights in the LCS. are established" seeks to transfer a certain risk to a third party (insurance company) in order to compensate him or a third party for the damages or losses that may derive from the occurrence of an uncertain event on the date of the insurance contract. For this purpose, a remuneration (premium) must be paid to the insurer.

The insured

The insured can be defined as the owner of the area of interest that the insurance coverage concerns, and of the right to compensation that is satisfied in due course, which, in certain cases, can be transferred to the beneficiary. It is the natural or legal person to whom the event of the accident will affect him most directly. In short, he is the one on whose head or property the consequences of the accident will fall. The figure of the insured is essential within the insurance contract. Because just as a contract of that nature cannot be conceived without the existence of a risk to cover or it is not possible to think of a legal transaction of the aforementioned nature without there being a person or final recipient of the guarantee that is agreed, and whose interests Thus protected, they are the efficient cause of the contract.

The beneficiary

It is the person who is entitled to receive the benefit from the insurer. The figure of the beneficiary is especially relevant in personal insurance, since it is frequently intended to take advantage of a third party, and even in certain modalities this is necessary, as occurs in death insurance.

The beneficiary is also the person who will receive the benefit of the insurance when the event contemplated in it occurs (without being insured). He is the one on whom the benefits of the agreed policy fall, by express will of the policyholder. The designation of the beneficiary responds to forecast approaches that correspond to personal insurance, especially life and accident insurance, in the event of the death of the insured.

Article 84 of the LCS of Spain, textually establishes that the policyholder may designate a beneficiary

Formal elements of the insurance contract

• Proposed: is a contract of good faith, where the company believes what the proponent (client) declares to appreciate the risk and thus determine the cost and scope of the insurance.
• Policy: it is the main document that implements the insurance contract, where the rights and obligations of the parties consist. This is a private contract, usually written in several folios, which includes general conditions and particular conditions. The general conditions, which are unique to all insured persons, represent the set of basic principles that the insurer has set to regulate all contracts formalized in a particular bouquet or product, such as the way the compensation is settled or the premiums, mutual communications between insurer and insured, etc. They also include definitions and exclusions that generally apply to the insurance contract. The policy shall contain at least the following indications:
• the names, addresses of the contractors and signature of the insurance company;
• the designation of the thing or the insured person;
• the nature of the guaranteed risks;
• the moment from which the risk and duration of this guarantee is guaranteed;
• the amount of the guarantee;
• the insurance fee or premium;
• the other clauses that should be included in the policy in accordance with the legal provisions, as well as those legally agreed by the contracting parties.

Actual elements of the insurance contract

They are those elements that, if not concluded, do not allow the existence of the insurance contract:

• the secure interest
• safe risk
• the cousin
• the obligation of the insurer to compensate

Insurable interest

In general, the immediate object of the contract is the obligation that is constituted by it, but since this, in turn, has as its object a benefit of giving, doing or not doing, things are ordinarily called object of the contract or services that are the subject, respectively, of the obligations to give or to do.

The main obligation of the insurer has as its object or provision the protection of the interest threatened by the insured risk, as long as the accident has not occurred, and this obligation becomes that of indemnifying the damage caused, if the accident occurs.

By interest is understood the lawful relation of economic value on an asset. When this relationship is threatened by risk, it is an insurable interest.

The insured interest necessarily has an economic value, which in some insurances (those of things) is determined a posteriori by means of the corresponding expert appraisal, and in others (those of people) it is determined a priori, contractually or legally. However, in those insurances, at the time the contract is formalized, the insured determines unilaterally the amount that he considers sufficient to repair the damage in the event of an accident, this amount called the insured sum, represents the approximate value of the interest, serves as a basis to calculate the premium (the higher the amount, the higher the premium) and the contractual limit to the future benefit of the insurer. The ideal is that there is a coincidence between the value of the interest and the insured sum, but a discrepancy is always possible, since, as we have said, the latter is freely set by the insured and, deliberately or by mistake, can set it in an amount other than the value of interest.

In principle, all tangible things (cars, homes, businesses, etc.) and intangible things (financial damages, stoppage of activity, etc.) can be insured; In addition, life and property can be insured. For the thing to be capable of being insured, it must meet the following requirements:

• It must be a body or an incorporated thing.
• The thing must exist at the time of the contract, or at least at the time the risks or damages begin.
• The thing must be taxable in money.
• The thing must be subject to a lawful stipulation.
• The thing must be exposed to losing itself for the risk that the insured runs.

Otherwise, sensu, the following cannot be ensured:

• speculative risks (basic precept: "Compensation does not constitute gain";
• the objects of illicit trade;
• things where there is no secure interest.

The insurable risk

The purpose of insurance is to provide economic security against risk, this purpose is achieved not by suppressing the feared event (fire, death, disease, etc.), but by the certainty of having financial compensation when it occurs the feared harmful event.

From a legal point of view, risk becomes an essential element of the contract and consists of an uncertain event as to the fact itself or as to the moment of its realization, or as to the amount of the effect. Risk, according to Garrigues, is the possibility that by chance an event occurs that produces a patrimonial need. This patrimonial need can be concrete, as occurs in insurance against damages; or abstract, as occurs in personal insurance or, rather, in sum insurance, especially life insurance.

Without risk, there can be no insurance, because in the absence of the possibility of the harmful event occurring, neither can there be damage nor will it be possible to think of any compensation. The risk presents certain characteristics that are the following:

• It's uncertain and random.
• Possible. The impossible doesn't pose a risk. It must be uncertain, because if it will necessarily happen, no one would assume the obligation to repair it.
• It's concrete.
• It's lawful.
• It's fortuitous.
• It's economical.

In the insurance contract, the insurer cannot assume the risk in an abstract way, but this must be duly individualized, since not all risks are insurable, which is why they must be limited and individualized, within the contractual relationship.

The insurance premium or price

The premium is one of the essential elements of the insurance contract. It is the price of the insurance or consideration, established by an insurance company calculated on the basis of actuarial and statistical calculations taking into account the frequency and severity in the occurrence of similar events, the very history of events that occurred to the client, and excluding expenses. internal or external that said insurer has.

Unless otherwise agreed, if the premium has not been paid before the disaster or accident occurs, the insurer is released from the obligation contracted in the contract. Also, unless otherwise agreed, it is paid in money; its payment is mandatory for the policyholder or contracting party according to the conditions established in the insurance policy.

The obligation of the insurer to pay the sum insured

This element is important because it represents the cause of the obligation assumed by the policyholder to pay the corresponding premium. Because this is obliged to pay the premium because it hopes that the insurer assumes the risk and complies with paying compensation in the event of an accident.

This obligation depends on the realization of the insured risk. This is merely a consequence of the insurer's duty to assume the insurable risk. And although the accident may not occur, this does not mean that the essential element of the insurance that concerns us now is missing, since this is configured with the assumption of the risk made by the insurer when entering into the insurance contract, the indemnity benefit being only payable in the event of an accident.

Types of insurance

Insurance contracts can be classified in different ways, one of them (the one used in the Insurance Contract Law of Spain itself), divides them into damage insurance and personal insurance.

• Damage insurance: Regulation in Title II of Law 50/1980 on Insurance Contract. This type of insurance seeks strict compensation for the damage suffered, the insurer is limited to facilitating the value of the loss suffered by the insured. The amount is not known until the damage occurs, so, at the time of the insurance contract, the amount is not set, but rather bases and methods to be able to proceed to the calculation after the event of the damage. The damage insurance contracts established in the Insurance Contract Act are as follows:
  • Legal defence insurance: It is the one for which the insurer is obliged to take charge of the expenses in which the insured person may incur by his intervention in an administrative, judicial or arbitral procedure, as well as to provide him with the legal assistance (judicial and extrajudicial) services derived from the insurance coverage. In Spain it is regulated in art. 76 of Law 50/1980 on Insurance Contracts, while in other countries such as Argentina is not expressly regulated by law. This kind of insurance allows the insured person to be protected from various daily contingencies in which he or she may require technical assistance from attorney and lawyer, and the insurer must pay the expenses required by technical assistance. According to the doctrine, the interest of the insured “is the integrity of his or her property in the face of possible expenses derived from legal defense and the risk will be composed of the set of actions that may affect that property.” It is an autonomous insurance contract that must be differentiated from others, such as the case of legal defence included in liability insurance. In such systems as that of Spain allows the free choice of attorney and attorney for representation and defense in any kind of procedure, the latter not acting under the instructions of the insurer. In this line the case law has been pronounced and protection has even been extended to the family unit as insured in the legal defense (STS 2173/2019 of 27/06/2019).
  • Ground transportation insurance. Regulated in Spain by articles 54 et seq. of the Insurance Contracts Act, and in other countries such as Colombia is found in articles 1117 et seq. of the Trade Code, it is understood as the one in which the insurer is obliged, in exchange for the collection of a premium, to compensate the material damage that may arise by the transport of the goods, the means used or other insured objects. The terreste transport insurance contract is a typical contract whose elements are consensuality, bilaterality, onerosity, randomness and successive execution. They can hire this insurance not only the owner of the goods or the vehicle that transports them, but all those who have responsibility for their conservation, such as the commissioner or the transport agency. In addition, you can hire for a trip or for a certain time. Normatively it is understood that insurance coverage begins from the time the goods are delivered to the carrier for transportation (at the starting point of the insured trip), that is to say that the insurer's liability now begins at the time the carrier receives or has been required to receive the goods subject of the insurance, and ends when the goods are delivered to the recipient at the destination point. However, when various means are used for the transport of the goods (terrestrial, air, sea or river), and the exact timing of the sinister cannot be determined, the law states that the rules of the land transport insurance must be applied if the journey through this means constitutes the most important part of it. If, on the contrary, land transport is accessory to another means of transport, the prevailing transport rules must be applied. With regard to safe risk, this insurance includes all the risks inherent in transportation. However, it is important to bear in mind that the insurer is not obliged to respond if the goods suffers any deterioration caused by the simple course of time, or by the risks expressly excluded at the time of contracting the insurance.
  • Fire insurance. Article 45 of the Insurance Contract Act. In these the insurer is obliged to compensate the insured for the damage caused by a fire in the insured object. The same Act in article 46 provides that insurance coverage shall be extended to the objects described in the policy. When insured goods are objects of art, jewellery and precious metals, securities, money and documents of any kind, an express inclusion is required for their coverage. It is understood covered under fire insurance also those damage caused by fire-related consequences, such as heat damage, smoke, steam...
  • Insurance against thefts, we found it in section 50 of the Insurance Contracts Act. In this type of insurance, the insurer covers damages resulting from illegitimate subtraction by third parties of the things insured in the contract. Article 50, paragraph 2, states that “the coverage includes damage caused by the commission of the crime in any form”. In this regard, judgements such as that of the Supreme Court of 29 April 2002 have already been clarified that in the case of theft insurance we are facing insurance that also covers the figure of theft.
  • Loss of profit insurance: Established in Articles 63 et seq. of Law 50/1980. In this insurance contract, the insurer covers the loss of economic performance that could have been achieved in an act or activity if the sinister described in the contract had not occurred. The frustrated expectations are met, but when this situation has occurred as a result of the events set out in the contract. Article 64 of the Act provides that, in the event that the insurer engages a loss of profit with an insurer and another insurer ' s insurance, the insurer shall communicate to both insurers such a situation, in order to avoid that, for the same purpose, cause and timeliness of the coverage, it proceeds to the collection of two compensations producing unfair enrichment.
  • Caution: Article 68 of Law 50/1980. The insurer covers the property damage resulting from the failure to comply with an obligation by the debtor. We are faced with insurance involving three persons, the insurer, the insurance taker and possible breacher, which is the one who hires the insurance and the insured, who is the person who has the right to compensation. It is also known as a security insurance, because its purpose is to establish a guarantee that the obligations will be met.
  • Credit Insurance: Article 69 of Law 50/1980. In this insurance the insured risk is insolvency, whose assumptions are set out in article 70 LCS. Therefore, the insurer covers the damages suffered and derived from the definitive insolvency of the debtors and that as a result of the insolvency of the debtors, the failure of its credits occurs. Under this insurance, the insurer would indemnify the insured with a percentage, previously established in the policy, of the amount of the unpaid credit, plus the charges of collection and other expressly agreed damages. This percentage can never be less than 50% of the final loss (art. 71).
  • Liability Insurance: Regulation in Section 73 of the Insurance Contracts Act. Insurance for which the insurer is obliged to cover the risk of birth by the insurer of the obligation to compensate a third party for the damages caused, when the insurer is civilly responsible for these, for an act provided for in the contract. Judgments such as that of the Supreme Court of 11 November 2009 reads as a third party “the person who has suffered the damages that must be answered and who are insured.”

In addition to the contracts established in the Insurance Contract Law, contracts such as agricultural insurance stand out, which is a widely used and common insurance against damages but which is not developed in Law 50/1980.

Agricultural Insurance: As established by BROSETA PONT, M. MARTÍNEZ SANZ, F., these types of insurance have received special attention and particular state intervention due to their complexity and the importance of the risks borne by the activities agricultural, forestry and livestock, taking into account that these are subject to risks of a very diverse nature. For this reason, we find them regulated in Law 87/1978, of December 28, on Combined Agricultural Insurance, as well as in Royal Decree 2329/1974, of September 14, which approved its regulations. It should be noted that a Combined Agricultural Insurance Plan is approved annually, establishing the subsidies and aid granted by the state for the conclusion of these insurances.

Regarding its characteristics, we must begin by establishing that it is a combined insurance against multiple agricultural risks, livestock risks due to accidents, diseases or epizootics of livestock, or risks of forest fires. Subscription to this insurance is voluntary except in cases where the law establishes otherwise, and as previously specified, they are heavily subsidized by the State. In this type of insurance, the policies can be subscribed individually or collectively, entrusting the risk coverage to the private insurance companies and Mutual Societies that are grouped in the Agroseguro entity, being under the supervision of the General Directorate of Insurance and Pension Funds and of ENESA. Finally, these types of insurance are carried out according to productions, areas and risks, through the different annual combined agricultural insurance plans approved by the Government.

It should also be noted that the State Agricultural Insurance Entity is created as a body with its own legal personality and whose main functions are the coordination of all agricultural insurance activities, the preparation of the annual plan, as well as the conduct of studies, advice, information and mediation.

Within the Agrarian Insurance we can find, for example, the national cereal insurance, the combined hail and frost insurance, and forest insurance (the affiliation to them is compulsory for all forest land owners, regulated by Law 81 /1968, of December 5, and by its Regulations approved by Decree 3769/1972, of December 23).

• People's insurance. The Insurance Contract Act regulates insurance contracts for persons in Title III. Article 80 informs us that people insurance covers the risks that may affect the existence, integrity or health of the insured. Unlike damage insurance, in this case the damage suffered by the insured is not usually compensated, but rather tend to have a purpose of forecasting and saving. In this type of insurance the amount of compensation is previously agreed upon in the insurance contract. Insurance for the most common and regulated persons under the Insurance Contract Act is as follows:
  • Life insurance: We are facing the insurance that has greater legislative development in Law 50/1980. Regulation in articles 83 to 99. By means of this insurance, the insurer is obliged to satisfy the beneficiary, a capital, rent or other agreed benefits, in the case of death or survival of the insured person, or both jointly (art. 83). Life insurance may be about the life of the adopter or the life of a third party, although in the case of the latter the consent is required. The insurance taker may designate a beneficiary and if a beneficiary is not provided, the capital derived from the insurance will be included in the assets of the insurance taker.
  • Accident insurance: Article 100 LCS: The insurer is obliged to cover bodily injuries resulting from a sudden, external and non-intentional violent cause of the insured person, which causes temporary or permanent disability or death. This insurance has the hybrid consideration as soon as it is a person's insurance, because the risk is the protection of the person's physical integrity, but it can act as a damage insurance when the insurance covers the expenses of hospitalization, rehabilitation, transfer...
  • Disease and health care: We find them in articles 105 and 106 of the LCS. The risk in this type of contract is for the insured to contract illnesses. As a result of this insurance, the insurer would cover the costs of medical and pharmaceutical assistance, when we are faced with a health insurance, or in the case of health insurance, the insurer assumes the direct provision of medical and surgical services of the insured.
  • Unit Insurance: Established in Article 106 ter LSC. The insurer is obliged to comply with the provision set out in the contract, where a dependency situation occurs, in order to provide, in whole or in part and directly or indirectly, the negative consequences arising for the insured person when he or she is in such a situation. The same Law refers us to the regulations for the promotion of personal autonomy and care for persons in dependency to observe in which situations we are faced with a case of dependence. In this case the risk would be the lack of autonomy, the loss of independence. When faced with dependency cases, the Spanish model is mixed, in the sense that the public sector guarantees basic coverage and the private sector, as is the case with this insurance, can complement and improve the benefits provided by the public sector.
  • Death insurance: Regulation in Article 106 bis LCS. In this case the insurer is obliged to provide the funeral services agreed upon in the insurance contract, if the death of the insured person occurs. When an amount is paid in the policy, and the costs of the service provided are lower than this, the difference will be the insurance taker and in the event of its death to its heirs.

Mandatory insurance

The law usually establishes certain mandatory insurances. Examples of insurance required by law are the following:

• Compulsory insurance, which is a basic insurance of the wider bouquet of car insurance. It is compulsory to subscribe to the Royal Legislative Decree 8/2004 of 29 October;
• Dog insurance considered dangerous;
• Sports Insurance: Cover sport activities, trainings and competencies, developed under the supervision and/or authorization of the institution by which the coverage was contracted and during the validity indicated in the policy;
  • Hunting insurance: The minimum coverage you can get is the hunter's civil liability policy that covers the involuntary damage that may cause others during the hunting activity.
  • Diving insurance: Most include rehabilitation, surgical assistance, medication, expenses as well as prosthesis or similar. Some policies establish a maximum depth to which the insured may descend.
  • Bicycle insurance: non-mandatory sports insurance; liability insurance; to obtain it, it is necessary to join the entity and register the bicycle;
  • Ski insurance: non-binding sports insurance; minimum liability insurance;
  • Quad Insurance: a quad needs to have mandatory liability insurance to circulate;
• Material or captive damage insurance: the public authorities understand that the dangers of certain activities are sufficient to compel those who make them to hire insurance to protect third parties from damages that may be caused.

Other contracts may be bound by a prior contract. It is very common in a mortgage to have to insure the mortgaged asset in favor of the creditor.^{[citation required]}

Uncommon Insurance

Some less frequent examples are:

• Secure a part of the human body: legs, chest, nose, etc.
• Secure a draw. If it is awarded, the insurance company pays it; if it does not go out, the insurance company has won.
• Vehicle insurance for one day. For example, old vehicles that drive one or a few days a year.
• Real estate title insurance. Also called Title insurance, it is a type of insurance created in the United States to protect all kinds of real estate sale or tax on property. According to Carlos Odriozola, author of the first book written on the subject in Spanish, The real estate title insurance, the title insurance is a compensation agreement, because collaterally to a main operation, which may be the sale or mortgage, the insurer is obliged to compensate the insurer in the event that it had any loss caused by actions initiated by a third party.^{[chuckles]required]}

Special clauses of the insurance contract

The distinction between delimiting clauses and limiting clauses has been much discussed both by doctrine and by jurisprudence.

The delimiting clauses: Their purpose is to delimit and/or specify the content and scope of the contract, they are precisely those used to determine the object of the contract, that is, the risk. Therefore, they delimit the insured's own risks, and consequently they are neither prejudicial nor limiting. In addition, in accordance with article 3 LCS as formal requirements, they must be highlighted in a special way and must be specifically accepted in writing.

The limiting clauses: They restrict, modify or simply condition the insured's right to compensation or the benefit guaranteed in the insurance contract, since the insured risk has actually occurred. Article 3 LCS requires that they must be drafted in a clear, precise manner and likewise, its validity is subject to the written acceptance of the insured.

Harmful clauses: They are those that considerably and disproportionately reduce the right of the insured, emptying it of content, so that it is practically impossible to access the coverage of the accident. In short, they prevent the effectiveness of the policy. In accordance with article 3 LSC, the harmful clauses are null and void and cannot be valid, even when they are expressly accepted by the insured.

Lastly, from the point of view of Spanish law, we could consider harmful those clauses of the insurance contract that could be brought up with the concept of unfair terms established in article 82 of Royal Legislative Decree 1/2007, of November 16, by which the consolidated text of the General Law for the Defense of Consumers and Users and other complementary laws is approved.

Insurance Agent

The insurance agent is the intermediary between the company and the client, and in order to be able to act as an intermediary, they must have authorization from both the company they represent and from a government body that oversees it. He is authorized to verify that the risk exists and that it is in a condition to be insured.

Oversecure and undersecure

The insured risk cannot be significantly higher or lower than the real value of the thing or interest insured (sum insured), so a prudent valuation of the insured object is essential. In the first case (overinsurance) produced by the accident, the insurer will only indemnify the damage up to the real value of the thing, even if the insured party is greater. In the case of underinsurance, the company will indemnify in the same proportion that it covered the insured interest: if the thing was worth €1,000 and it was insured for 500, causing damage of 500, it will indemnify half of it: €250. In these cases, the clause called "Compensable Proportion" is applied. This clause applies to all types of insurance, with the exception of those known as first risk insurance.

This is not the case when it comes to life insurance, since in this type of contract a person can be insured with more than one life insurance, from one or more companies, but it is recommended when the second insurance is contracted of life, inform in the declaration of the application, about the accumulation of the capitals that it has contracted in the first policy and so on. Therefore, if an insured has contracted life insurance, buys a home and contracts a new life insurance to cover the value of the mortgage, in the event of death, the beneficiaries designated in the policies will collect from both insurances. Only in the event that there is a clause for the transfer of rights in favor of the financial institution, the company will request the bank to inform it of the outstanding capital of the mortgage, to pay the bank first and once the debt is paid, if it exists. a surplus will be paid to the beneficiaries designated in the policy.

Regulation by country

Argentina

In Argentina, the insurance contract is regulated by Insurance Law No. 17,418, enacted on August 30, 1967, and the resolutions issued by the National Insurance Superintendency.

In addition, as it is framed as a consumer relationship, the policy is also covered by the consumer protection and defense regulations (Law 24,240) and by the National Civil and Commercial Code (CCyC) regarding the adhesion contracts, general contract clauses and consumer relationship.

From the normative plexus it can be deduced that the general clauses must be written in a clear, comprehensible and complete manner. Likewise, although there is no difference between delimiting clauses, limiting clauses and harmful clauses, art. 988 of the CCyC establishes that in the adhesion contracts, the clauses considered "abusive" will be considered unwritten, that is, those that distort the obligations of the predisposing party, those that imply a waiver or restriction of the rights of the adherent, those that extend the rights of the predisposing and/or those that, due to their content, wording or presentation, are not reasonably foreseeable. In other words, anything that has the purpose or effect of causing a significant imbalance between the rights and obligations of the parties, to the detriment of the consumer (art. 1119 CCyC).

This control of clauses is not limited only to the contractual content, but also to their incorporation. For this reason, a clause may be declared abusive even when it has been negotiated individually and the policyholder expressly approves it, since, in addition to being an adhesion contract, it is also a consumer contract.

On the other hand, it is important to highlight that the approval and prior administrative control of the general clauses by the National Insurance Superintendency does not prevent the possibility of carrying out a subsequent judicial control and ruling on the nullity of a specific clause (art. 989 CCyC).

Bolivia

In Bolivia, the insurance contract is regulated by the Bolivian Commercial Code (CC). Although it does not include a specific arrangement for limiting or limiting clauses, art. 1013, regarding discrepancies in the policy, states that if the policyholder or insured finds that the policy does not agree with what has been agreed or with what is proposed, they can request the corresponding rectification in writing, within fifteen days of receipt of the policy. If it does not do so, the stipulations are considered accepted once said period has expired. On the contrary, if the insurer does not comply with the requested rectification or remains silent, it is understood that the terms of the modification have been accepted.

Art. 1023 establishes that the insurance contract, with the exception of life, can be terminated by the unilateral will of any of the contracting parties, provided that this is stipulated in the policy. If it is the insurer that exercises said power, it must notify the insured in writing of its decision at his or her address and at least fifteen days in advance, while if it is the insured who exercises the power to resolve, this will produce its effects from its notification. written to the insurer.

Columbia

In Colombia, the insurance activity is of public interest, therefore, it must be regulated and authorized by the State through the Financial Superintendence, attached to the Ministry of Finance, which exercises inspection, surveillance and control functions.

This activity is enshrined in Title V of the Commercial Code (Decree 410 of 1970) as the main regulatory framework. However, since the issuance of the aforementioned decree, laws, decrees and jurisprudence have been promulgated that complement the regulation of the insurance activity. In a special way we find its regulation in health matters in Law 100 of 1993, and Decree 2150 of 1998; Damage insurance is regulated by Law 675 of 2001 and the Commercial Code and vehicle insurance is regulated by Decree 1507 and 172 of 2001

Regarding the Insurance Contract, according to article 1045 of the Commercial Code, it must contain, as essential elements: the insurable interest, the insurable risk, value of the premium, conditional obligation of the insurer. In the case of missing any of the above elements, the insurance contract will have no effect.

In addition, it must be written (Insurance Policy) or by confession. This Policy must contain 1) The request, through which the insured indicates to the insurer his interest in contracting the insurance and where he must clearly determine the status of risk; 2) a title page or cover; 3) the Particular Conditions, which are defined for each specific case; 4) The General Conditions, and 5) The annexes that indicate the policy to which access is made.

It is common for the dominant parties to add clauses in insurance contracts that harm the adherents. In Colombia, the types of clauses that arise from the abuse of a dominant position have been defined as "Abusive Clauses". The consumer protection regulations (Law 1480 of 2011) and the Law on consumer protection of financial sector services (Law 1328 of 2009) expressly prohibit any type of harmful clause, or in its term, abusive clause and have the same effect. of the harmful clauses, invalidate the rights of the consumer who is part of the insurance contract and are invalid by right.

To analyze this type of clauses and establish why they are harmful or abusive, the Supreme Court of Justice in Sentence SC129-2018, of February 12, 2018, indicated that the following aspects must be determined:“1. It is imposed in an adhesion contract (which means that the clauses of the contract are not discussed); 2) generates the imposition of an exaggerated burden for the policyholder and insured; and, iii) evidence of a contractual imbalance, to the extent that several of the purposes for which the insurance was purchased end up being frustrated, as a result of an exclusion clause that ab initio undermines that purpose.”

Chile

The basic regulation of the Insurance Contract in Chile appears in Title VIII of Book II of the Commercial Code. Among the rules for the protection of the insured and beneficiary, art. 542 states that the provisions governing the insurance contract are mandatory, unless otherwise provided. However, the contractual stipulations that are most beneficial for the insured or the beneficiary will be considered valid.

On the other hand, art. 538 authorizes the contracting party or insured to withdraw from an insurance contract entered into at a distance, within a period of ten days, counted from the receipt of the policy, without expression of cause or charge, having the right to a refund of the premium that may have paid.

Ecuador

In Ecuador, article 25 of the Codification of the General Insurance Law stipulates that the Superintendence of Companies, Securities and Insurance will determine the clauses that must be included in the policies, as well as the prohibited clauses, which will have no effect and will be They will be considered unwritten if they exist. Insurance policies, among other conditions, must: i) respond to standards of equality and equity between the contracting parties; ii) include a clause stating the option of the parties to submit to arbitration or mediation the differences that originate in the contract or insurance policy; and iii) be written with easily legible typographical characters. In addition, when the general conditions of the policies or their special clauses differ from the norms established in the legislation on the insurance contract, the latter will prevail over the former.

Spain

In Spain, the insurance contract is regulated by Law 50/1980, of October 8, on Insurance Contracts (LCS).

Art. 2 of the Insurance Contract Law establishes that the different modalities of the insurance contract will be governed by said LCS, unless another order is applicable to them. Its precepts are of an imperative nature, which is why they grant inalienable rights to the insured, unless they provide otherwise. However, the contractual clauses that are most beneficial to the insured will be considered valid.

As an exception to what is stated in art. 2 of the LCS, its art. 44 stipulates that the insurer does not cover damages for events derived from armed conflicts or those arising from extraordinary risks on people and property, unless otherwise agreed. Likewise, that same art. 44 stipulates that the mandate contained in article 2 of the same will not be applicable to insurance contracts for large risks, as defined in this Law.

As DÍEZ-PICAZO, L. and GULLÓN BALLESTEROS, A. (1990) point out, the insurance contract is of the adherence type, since the insurer carries out a mass contracting, establishing a predetermined content for the formalization of all contracts of a certain type. In this way, the insured does not negotiate the clauses, but can only accept or reject them.

Article 3 of the LCS establishes that «the general conditions, which in no case may be detrimental to the insured, must be included by the insurer in the insurance proposal, if any, and necessarily in the contract policy or in a supplementary document, which will be signed by the insured and to whom a copy will be delivered. The general and particular conditions will be written clearly and precisely.

The Spanish Supreme Court has established that an injurious clause or abusive clause is one "that considerably and disproportionately reduces the right of the insured, emptying it of content, so that it is practically impossible to access the coverage of the claim". In short, those clauses that prevent the effectiveness of the policy.

The harmful clauses are prohibited and are always void, so if they appear in the contract they will be considered as not included. Unlike the previous ones, the limiting clauses are valid, even though they may not be favorable to the insured, as long as he has given his consent. The jurisprudence of the Supreme Court has established that limiting clauses are those that "condition or modify the insured's right to compensation or the benefit guaranteed in the contract, once the risk covered by the insurance has occurred." In other words, they are frequently included in the contract to condition or modify the rights of the insured before their eventual right to receive compensation.

On the other hand, the limiting clauses, (arts. 3 and 8.3 LCS) seek to determine or set the limits of the insured risk (temporarily, spatially or quantitatively), describing the guarantees and coverage granted in contract. Although they do not limit the rights of the insured or injured party, they can be used by the insurance company to deny or reduce compensation. The Spanish Supreme Court has indicated that these delimiting clauses "specify the object of the contract and establish the risks that, if they occur, give rise to the insured's right to benefit because they constitute the object of the insurance." In other words, a clause of this type is based on specifying the nature of the risk and individualizing it, in order to eliminate ambiguities. The qualified delimiting clauses (arts. 8.3 and 22.4 LCS) are those that describe the "exclusions and limitations" of coverage, as well as those that establish "the conditions and terms of the opposition to the extension of each party or its unenforceability" and always that do not materially limit the rights of the insured, since in this case they become limiting clauses.

In order to comply with the due criteria of transparency, the Supreme Court has established the requirement that both the limiting and delimiting clauses have a clear, concise, coherent and logical wording, so that they cannot lead to any error with its content and for the correct legal protection of the policyholder, the weak part of the contract. In addition, it is required that the clauses delimiting the risk covered respect the principle of consistency with the purpose of the insurance itself.

The legislation requires that the relationship between insurers and their policyholders be transparent, banishing the fine print^{[citation required]}. For this reason, both the prohibition of harmful clauses and the regulation of limiting clauses and delimiting clauses represent protection for the insured. To avoid abuses and protect your rights, it is required that in its wording, the qualifying limiting clauses and delimiting clauses are specially highlighted. To do this, they must appear in the policy in bold or in a different color or font than the rest of the clauses or, even, for their correct notoriety, be physically separated from the rest of the clauses. In addition, the limiting clauses must be expressly signed by the insured, so that their recognition and acceptance is recorded (what is usually called "second signature"). The insured must receive a copy of all the clauses that make up the contract.

Article 3 of the LCS also stipulates that "the general conditions of the contract will be subject to the supervision of the Public Administration in the terms provided by the Law". In the event that the Supreme Court declares the nullity of any of the clauses of the general conditions of a contract, the competent Public Administration will force the insurers to modify the identical clauses contained in their policies.

The Proposal for the drafting of the Spanish Commercial Code, made by the General Codification Commission and published in 2013, establishes in article 591-3 that “the insurance contract policy must contain only the general, special or particular conditions that are applicable to the insurance contract signed by the policyholder" and also that "the clauses that are classified as abusive by the Law or the judges or courts will be null, without prejudice to the effectiveness of the rest of the valid conditions of the contract". As Tapia, A. (2017) points out, this simpler wording eliminates the current distinction between the clauses delimiting risk and the clauses limiting the rights of the insured, which has led to frequent problems of interpretation, in addition to adding the automatic nullity of the clauses branded by the judge or court as abusive. The jurisprudence has reiterated that currently the boundaries between limiting and delimiting clauses are not clear, and there are even cases in which the clauses that delimit the risk are surprisingly assimilated to those limiting the rights of the insured.

Peru

In Peru, art. 39 of the Insurance Contract Law (Law no. 29946) defines that unfair clauses are understood as “all those non-negotiated stipulations that, even when they have not been observed by the Superintendency, cause against the requirements of the maximum good faith, to the detriment of the insured, a significant imbalance of the rights and obligations of the parties arising from the contract. It is considered that a clause has not been negotiated when it has been previously drafted and the contracting party has not influenced its content.

According to the same article 39, the abusive nature of a clause subsists even when the contracting party and/or insured have specifically approved it in writing. In any case, unfair terms are null and void, so they are deemed not to have been agreed upon.

In art. 40 are the stipulations that are prohibited for insurance companies and that are null and void if they appear in a policy. Among these stipulations are the following: i) waiver of the insured and/or beneficiaries to the jurisdiction and/or laws that favor them; ii) the setting of limitation periods that do not conform to current regulations; and iii) clauses that prohibit or restrict the right of the insured to submit the dispute to the courts.

In art. 41 indicates abusive practices and the right to repent. For example, they involve prohibited marketing practices i) directly or indirectly imposing the conclusion of an insurance contract, except for compulsory insurance; or ii) predetermine the name of insurance companies through related contracts, in such a way that the freedom of choice of the potential insured is limited.

This article 41 also establishes the right of repentance, which the policyholder has when the insurance offer is made outside the commercial premises of the insurance companies, or of those who are authorized to operate as brokers, or when the offer is made through sales promoters. In these cases, the policyholder may terminate the insurance contract, without stating the cause, within fifteen days following the date on which the policyholder receives the policy or a provisional coverage note.