The use of parametric insurance in Latin America as an alternative to traditional indemnity-based insurance has increased over the last twenty years, particularly as a mechanism for insuring against extreme weather risks.
Following the aforementioned increasement, parametric insurances in Latin America have not received a standardized legal treatment from the local regulators. Every country has developed its applicable normative, at its sole discretion, depending on the requirements of the local insurance markets.
Notwithstanding, the following are the main regulatory trends for parametric insurances in the region which will be explained herein:
- Countries where the local regulation does not provide nor mention any applicable law for parametric insurances and, therefore, as it is not explicitly forbidden, it is deemed permitted.
- Countries where the local regulation accepts parametric insurance.
- Countries where the local regulation and the parametric insurances commercialization are only for agriculture and livestock practices.
About Insuralex in Latin America
Insuralex is a group created by independent law firms that specialise in Insurance and Reinsurance coverage, defence, litigation and all other related legal services.
Insuralex works for a wide range of clients including insurance and reinsurance companies, Lloyd’s syndicates, insurance and reinsurance brokers as well as captives and self insured companies.
Each member of Insuralex is considered to be a leading practice in this specialist field within its national jurisdiction.
Insuralex Latin American insurance law practice covers countries such as: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, Mexico, Panama, Paraguay, Peru, Uruguay and Venezuela.