With the signature of Costa Rican president, Oscar Arias, the insurance monopoly held by the Instituto Nacional de Seguros (INS), has ended, allowing Costa Ricans to make a choice once the competition enters the market.
President Arias, with INS president, Guillermo Constenla Umaña, yesterday signed the “Ley Reguladora del Mercado de Seguros”.
The law allows for the creation of a “superintendencia” (superintendent) of insurance and the strengthening of INS as an insurance provider, along with the independence of the Cuerpo de Bomberos (Fire Department), among other changes to the insurance industry.
Once the law is published in La Gaceta, the insurance market will be open to competition.
Constenla said yesterday that he welcomes competition and that the INS has been preparing for some time for the change and is in a position to compete in a free market. Constenla added that he sees the INS as a leader in the insurance market once the competition begins to operate in Costa Rica.
The role of the Superintendencia, once established, is to oversee the competition in a free market, similar to the work of the Consejo Nacional de Supervisión del Sistema Financiero (Conassif), which oversees the financial industry, and provide consumers security and confidence.
Along with the Superintendencia will be the creation of a Defensor del asegurado (an insurance Ombudsman) that will protect consumers.
The Ley Reguladora del Mercado de Seguros establishes the rules and requirements of foreign and national insurers, for example, the amount of capital each insurer must have to operate in Costa Rica.
With the change the INS will also be permitted to operate outside of Costa Rica, albeit through alliances and partnerships.
As to the Cuerpo de Bomberos, it will have the independence it has wanted for some time, to be able to administer operations and finances away from the apron strings of the INS.
“The move from an insurance monopoly to a free market is an experience of great value for all Costa Ricans, who will benefit from the changes”, said Constenla.
