My kind readers may have heard on the radio pleas from banks, which are asking their clients tocome forward and fill out some forms – or else! This is in observance of the anti money-laundering law (Law No. 8204: Estupefacientes, Sustancias Psicotrópicas, Drogas de Uso No Autorizado, Actividades Conexas, Legitimaciónde Capitales y Financiamiento al Terrorismo), which requires that financialinstitutions complete a dossier on clients whose financial movements exceed $10,000.
In July 2008, when laws were changed to allow insurance companies other than the National Insurance Institute (INS) to operate in Costa Rica, Law No. 8204 was also changed to encompass insurance companies, based on the fact that they are, indeed, financial institutions.
INS – which as of this writing is still the only insurance company operating in this country – has created a compliance office, with a full-time staff to make sure of full compliance, because the consequences are expensive if a financial institution is found to be in non-compliance!
INS is now getting serious. Their first objective is to improve, update and complete a database of its clients, known as Unified Client Data Base, or “BUC.” To do this, it has ruled that as of July 1, 2009, applications for new insurance policies or applications to modify existing policies must attach a “Client Information Form,” without which INS simply will not process applications. Excepted are the simpler ones hot policies, such as flight insurance, students’ insurance, travelers’ accident insurance, etc.
The form is detailed, and requires from the client the usual identity and contact information. If the client is a corporation, the information is required of the corporation itself and also of the person representing the corporation, the apoderado, whose power-of-attorney, or personería, must be attached.
The form must be signed by the client or the legal representative, if a corporation.
The client must attach: Copies of the client’s and signer’s IDs. Proof of address (light, phone or water bill) Proof of income and sources of income.
The power of attorney of the signer (for corporations).
Once a client has complied by filling out the Client Information Form and providing the additional info, there will be no more disclosure requirements from that client for two years – after which the information in the BUC is considered obsolete, and the form, etc., has to be done again.
Otherwise, it is said, INS will not renew that client’s insurance policies.
These requirements are fairly stringent, and we assume that, initially, they will have to be followed to the letter. A new broom sweeps clean, as the saying goes and, although everyone is used to bureaucracy, disclosure is indeed a new ball game for INS.
For more information, please contact David Garrett at 2233-2455 or [email protected]. Our purpose is to give the reader a better understanding of insurance in Costa Rica. The opinions and viewpoints expressed are those of the writer, and do not necessarily represent the official position of the National Insurance Institute (INS).