Insurance laws Colombia
In Colombia, insurance is primarily governed by the Commercial Code, which outlines the general principles and rules for insurance contracts. These contracts are considered "adhesion contracts" under Colombian consumer protection laws, meaning the policyholder accepts the terms set by the insurer.
Key Aspects of Colombian Insurance Law
Regulation and Supervision: The main regulatory and supervisory body for the insurance sector is the Financial Superintendence of Colombia (SFC) (Superintendencia Financiera de Colombia). The SFC is responsible for licensing, monitoring, and enforcing regulations to ensure the stability of the financial system and protect consumers. The legal framework is further detailed in the Financial System Organic Statute (EOSF) and the Unique Decree of the Financial System (Decree 2555 of 2010).
Contractual Principles: Insurance contracts must be in writing and have four essential elements:
An insurable interest (a lawful interest that can be subject to pecuniary valuation).
An insurable risk (the event must be fortuitous, not impossible or the result of willful misconduct).
A premium paid by the policyholder.
The insurer's agreement to pay an indemnity in case of a loss.
Disclosure and Misrepresentation: The policyholder has a duty to truthfully disclose all material facts to the insurer. Misrepresentation or non-disclosure of material facts can lead to the invalidation of the contract, especially if it's done in bad faith. A recent 2025 ruling by the Constitutional Court emphasized a heightened duty of due diligence for insurers, particularly in life insurance, to verify the nature of the risk.
Non-Admitted Insurance: In general, foreign insurers must have a local license to operate in Colombia. Colombian residents are free to purchase insurance from non-admitted entities, but certain types of policies, such as compulsory insurance and those for state entities, must be purchased from a regulated entity within Colombia.
Mandatory Insurance in Colombia
Certain types of insurance are compulsory:
SOAT (Seguro Obligatorio de Accidentes de Tránsito): This is mandatory personal accident insurance for victims of motor vehicle accidents. It provides limited coverage for medical expenses, transportation, and death benefits. It's important to note that SOAT is not a comprehensive civil liability policy and often does not cover all damages.
Workers' Compensation: As part of the social security system, employers are required to provide workers' compensation insurance to cover injuries sustained by employees at work.
Health Insurance: Colombia operates a public health insurance plan called Entidades Promotoras de Salud (EPS). All legal residents are required to be affiliated with EPS, which covers a range of health services. Visitors and temporary residents applying for a visa are often required to show proof of a valid private health insurance policy that covers medical emergencies and repatriation.
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