Life Insurance – Term for Rejection of Claims

As had been decided by Tribunals C and E of the Argentine Commercial Court of Appeals (please refer to “Life Insurance and Term for Rejection of Claim” in Marval News # 49 and “Thirty Days to Repudiate a Loss” in Marval News # 27), in the case of “Gordillo, Antonio Alberto c. Caja de Seguros S.A.” Tribunal A of the Argentine Commercial Court of Appeals recently held that although Section 49 second paragraph of the Insurance Law, which refers to life insurance, does not expressly remit to Section 56 of the Insurance Law, this does not mean that Section 56 is not to be applied to life insurance since Section 56 does not distinguish between different types of insurance.

The first paragraph of Section 49 of the Insurance Law establishes that in non-life insurance the insured must be paid within 15 days from the date when damages are assessed, after the 30-day term established in Section 56 of the Insurance Law has expired. The second paragraph of Section 49 sets forth that in life insurance, payment must be made within 15 days from the date the loss is reported or the complementary information requested by the insurer has been provided to the insurer.

Under Section 56 an insurer must take a decision as to the right of the insured to be indemnified within 30 days of the insurer’s receiving notice of a loss, or of the insurer’s receiving the complementary information requested to investigate the loss and assess the damages. If the insurer does not formally reject the claim within 30 days, the law will consider that the loss has been accepted by the insurer.

Pursuant to the recent decision of the Court of Appeals, in life insurance, once a loss has been reported, the insurer must expressly decide on the insured’s rights under the policy within 15 days (Section 49, second paragraph) if no complementary information has been requested, or within 30 days from the date when the information is received if such information is requested (Section 56).

In the life insurance case recently decided by the Court the insurer had not taken an express decision within 15 days from the date the loss had been reported. Instead, it had requested complementary information to the insured 22 days after the loss had been reported. The insured never provided such information. The Court held that the silence maintained by the insured was considered not to be in good faith, and consequently the insured had forfeited the right to be indemnified under the policy.

In sum, even when the Court confirmed that the terms set forth in Sections 49 and 56 of the Insurance Law applies to life insurance, it admitted that an insurer may request complementary information after the 15-day term to pay had expired and even decided that, since the insured had not provided such information, they forfeited his rights under the policy.

It should be pointed out, though, that in the case decided by the Court, the plaintiff had not proved the loss (the alleged disability) and, in addition, at the time when the loss had occurred the plaintiff was no longer a member of the group covered by the policy.