Mr. Strobel to Mr.
Olney.
Legation of the United States,
Santiago, May 7, 1896.
(Received June 12.)
No. 87.]
Sir: Referring to my No. 83 of the 30th ultimo,
containing a summary of the legislation to be brought before the Chilean
Congress, in view of the importance of the subject to the American
insurance companies established in this country, I have the honor to
inclose copy and translation of the Government bill which imposes
certain burdens on foreign companies of this class.
According to this bill agents of a foreign insurance company will be
required to obtain a special permit to carry on business, under penalty
of imprisonment; and this permit will not be granted until the company
has deposited 100,000 pesos in the mint.
The companies are also required to deduct from their semiannual profits
10 per cent for a reserve fund of 400,000 pesos; and this reserve fund
must also be deposited in the mint.
These deposits may be wholly or partially withdrawn, for the purpose of
paying losses, when all other resources are exhausted. Should, however,
the capital of 100,000 pesos be withdrawn, the whole of the half-yearly
profits are to be deposited until this amount is again completed.
Life insurance companies, and companies receiving deposits in the form of
savings, are required by the bill to deposit in the mint sums received
for premiums, after deduction of an amount necessary for expenses,
losses, and dividends. Dividends are not to exceed 6 per cent
semiannually.
[Page 44]
The above deposits may, wholly or partially, be replaced by real estate.
Foreign insurance companies must pay the same taxes as native companies.
All legal questions arising out of the business transacted in this
country must be decided by the Chilean courts.
The question of accepting or rejecting a proposition for an insurance
policy must be passed upon by the agent of the company in Chile, and can
not be referred to the head office; and if within fifteen days after the
receipt of the proposition by the principal agency the proposition has
not been rejected and the premium returned, the policy will be regarded
as in force, and on no grounds can it be rejected by the company.
I have, etc.,
[Inclosure in No. 87.—From Diario
Oficial, April 30, 1896.—Translation.]
Government bill regarding foreign insurance
companies.
bill.
- Article 1. Sixty days after the
publication of this act in the official journal no agency of a
foreign insurance company can do business in Chile unless
specially authorized by the President of the Republic, in
accordance with the provisions of the present act.
- Article 2. Policies of insurance
issued without this authorization shall be null and void, and
those persons who, representing themselves as agents of any
foreign company, issue them, shall be subject to the penalties
established in article 468 of the penal code.
- Article 3. The authorization to
establish in Chile agencies of foreign insurance companies can
only be obtained by companies which deposit beforehand, in the
office of the superintendent of the mint, the sum of 100,000
pesos in Government bonds, or in bonds of the land banks, the
price of which shall be fixed by the President of the Republic
in accordance with their commercial value.
- Article 4. Agencies of foreign
insurance companies are subject to the same taxes as native
companies, and are obliged to present their statements to the
authorities, and to publish them in the same form and in the
same cases as native companies.
- Article 5. Agencies of foreign
insurance companies are obliged to establish a reserve fund of
ten per cent of the half-yearly profits up to the amount of
400,000 pesos. This reserve fund shall be deposited every six
months in the mint, in Government bonds or any bonds of the land
banks, in the same form as established in article 3.
- Article 6. The 100,000 pesos
required in this article and the reserve fund form the capital
of the agencies of foreign insurance companies which are liable
for claims; consequently they may withdraw a part of this
deposit whenever they have to pay extraordinary losses which may
have exhausted their other resources.
- Article 7. Whenever, in order to pay
such losses, they shall have withdrawn a part of the capital of
100,000 pesos deposited in the mint, the agency shall devote the
total of its profits during the following half years until the
said capital is again completed.
- Article 8. Agencies of foreign life
insurance companies or agencies receiving deposits in the form
of savings shall not be obliged to establish the reserve fund
referred to in article 5, but every six months they must deposit
in the mint the amount received for insurance premiums, after
having deducted from the total amount of premiums the amount
corresponding to general expenses, losses, dividends, and
expenses necessary for the support of the agency, and their
dividends can not exceed six per cent half-yearly.
- This deposit shall be made in the same securities and in the
form established by article 3.
- Article 9. Every foreign insurance
company, with various agencies in Chile, is obliged to have a
principal agency to represent it before the authorities and the
public, which shall concentrate its operations, present a
statement of all the operations made in Chile, make the deposits
established by this act, and, in a word, have the legal
representation of the company.
- Article 10. Foreign insurance
companies are obliged to leave to the decision of their
principal agency in Chile all proposals for insurance which are
presented here, whether to refuse or accept them, and to issue
the corresponding policy.
- Article 11. If within fifteen days
after receipt of the proposal by the principal agency, the said
agency should not have refused or returned the first premium
delivered by the insurer or depositor, the policy shall be
regarded as in force, just as if it had been definitely issued,
and under no pretext can the company refuse it.
- Article 12. The calculation and
liquidation of the losses and claims of the assured or
depositors must likewise be attended to by the principal
agencies established in Chile.
- Article 13. This principal agency
shall be the legal representative for all questions before the
courts relative to operations made in Chile, which, in every
case, shall be decided by the Chilean courts, and under no
pretext can the company raise the defence that it is sued in a
foreign country and not in its domicile.
- Article 14. Agencies of foreign life
insurance companies or agencies receiving deposits in the form
of savings shall expend in Government bonds or bonds of land
banks, the total amount of their receipts for premiums on
policies in force in Chile, and shall deposit that amount in the
mint, in accordance with the provisions of article 3.
- Article 15. The deposit established
by article 14 shall be made in twelve equal monthly dividends to
date from the promulgation of this law.
- Article 16. The deposit established
by this law may in whole or in part be replaced by its value in
real estate purchased by the principal agency, which can not be
mortgaged or affected by obligations of any kind, or by sale
without judicial authorization, and in order to pay the losses
which have occurred in Chile.
- This real estate shall be kept constantly insured in a company
distinct from the one to which it belongs.
- Article 17. The agencies of foreign
life insurance companies which do not make the deposit
established by article 14 are regarded as unauthorized, and if
they issue any policies, the same shall be null and void, and
the agent who issues them shall be subject to the penalty
established in article 2.
- Agencies which are placed in this situation can not do in
Chile any other business than that connected with or
corresponding to the policies issued before the promulgation of
this law.
- Article 18. Within six months from
the date of the promulgation of this law, the President of the
Republic shall issue for its execution a set of regulations in
which fines may be established to the amount of 1,000 pesos,
which in every case shall be applied by the regular courts of
justice.
- Article 19. The agency which, in any
half year, does not deposit the amounts required by this law,
either to complete its capital, or corresponding to the reserve
fund, or to the premiums on life-insurance policies, is
immediately disqualified from continuing to do business in any
other form under the penalties established in article 17.
- In order to become rehabilitated, a new authorization of the
President of the Republic is required, after the deposit of all
the amounts in arrear.
- Article 20. The present law shall be
in force in all parts of the Republic, from the date of its
publication in the official journal.
Santiago, April 23,
1896.
- Jorge Montt.
- H. Perez de Arce.
