The information on this website is presented as a service for our clients and Internet users and is not intended to be legal advice, nor should you consider it as such. Although we welcome your inquiries, please keep in mind that merely contacting us will not establish an attorney-client relationship between us. Consequently, you should not convey any confidential information to us until a formal attorney-client relationship has been established. Please remember that electronic correspondence on the internet is not secure and that you should not include sensitive or confidential information in messages. With that in mind, we look forward to hearing from you.

Skip to Content

A New Era for Insurtech in Latin America

Lured by the prospect of exploring attractive markets, Latin American insurtech companies are leveraging new digital tools to optimize and modernize many aspects of insurance. These include new distribution channels and systems to facilitate insurance product comparison-shopping and new means of underwriting and claims management.

In years past, the absence of a regulatory framework specific to insurtech may have impeded its expansion, as insurtech companies represent only about 6% of all startup fintech companies in Latin America. Increasingly, however, insurance regulators in the region are recognizing and exploring ways to realize insurtech’s enormous potential. To facilitate insurance sector modernization, regulators are exploring, among other things, adoption of fintech regulatory “sandboxes” to enable new digital technologies while preserving consumer protection.

  • Brazil, the leading insurtech market in Latin America, recently offered a regulatory sandbox to a limited number of insurance companies under the supervision of the Brazil Insurance Superintendent (SUSEP). The sandbox is designed to facilitate testing of new products and services and to encourage development of creative ways to provide traditional insurance services. Also, SUSEP’s Circular No. 592, dated August 26, 2019, authorized certain types of “on demand” insurance policies sold through digital means with flexible terms. These regulatory developments reflect SUSEP’s desire to adapt to the increasing use of smartphones by consumers, ushering in the digital insurance era, and hopefully leading to more affordable insurance products.
  • Mexico’s Financial Technology Companies law (Fintech Law), adopted on March 9, 2018, while not specific to insurtech, signals that legislators likely will be flexible in crafting future regulations to address insurtech in a similar way. Until then, insurtech companies are relying on the Mexican Law of Insurance Companies and Bonds, which specifically permits insurance operations and brokerage activities to be provided via electronic means.
  • Peru has not adopted a law specific to insurtech companies, but the Banking and Insurance Superintendent (SBS) has promulgated Insurance Products Marketing Regulations that allow insurance companies to promote, offer, and sell products by phone, internet, or other distance systems, including digital marketing through social media. The SBS Supervision and Control of Insurance Intermediaries Regulations also allow insurance brokers to use phone and internet applications to market insurance products, subject to certain conditions.
  • Colombia already has the highest financial technology adoption rate in Latin America, with 76 percent of the population using fintech services. This year, Colombia adopted a decree establishing a regulatory sandbox – the Control Trial Environment (CTE) – for use by companies dedicated to implementing financial and insurance technology innovation. The decree permits interested participants to request an expedited temporary license from the Finance Superintendent to test products subject to lighter requirements for up to two years.
Other countries in Latin America with increasing insurance penetration — such as Argentina, Ecuador, Panama, Costa Rica, and Chile — have been slower to adopt or enact specific provisions promoting insurtech. Companies in these countries, however, have not been deterred and are venturing into a wide variety of innovative insurtech initiatives. It certainly looks like additional enabling legislative or regulatory action in those countries will not be far behind.
©2024 Carlton Fields, P.A. Carlton Fields practices law in California through Carlton Fields, LLP. Carlton Fields publications should not be construed as legal advice on any specific facts or circumstances. The contents are intended for general information and educational purposes only, and should not be relied on as if it were advice about a particular fact situation. The distribution of this publication is not intended to create, and receipt of it does not constitute, an attorney-client relationship with Carlton Fields. This publication may not be quoted or referred to in any other publication or proceeding without the prior written consent of the firm, to be given or withheld at our discretion. To request reprint permission for any of our publications, please use our Contact Us form via the link below. The views set forth herein are the personal views of the author and do not necessarily reflect those of the firm. This site may contain hypertext links to information created and maintained by other entities. Carlton Fields does not control or guarantee the accuracy or completeness of this outside information, nor is the inclusion of a link to be intended as an endorsement of those outside sites.