Protecting the users of financial services should always be a priority for any government. In order to comply with this obligation, the Mexican state created a government entity to protect the interests of users of financial services, including services rendered and products sold by insurance companies. That entity is the National Commission for the Protection and Defense of Users of Financial Services or, by its acronym in Spanish, the ‘Condusef’. Condusef also works as a mediator for controversies that arise between financial services companies and their customers.
Claims and conciliation process before Condusef
In relation to disputes arising from insurance contracts, Condusef is qualified to act as conciliator between the insurer and the insured or the beneficiaries of an insurance policy, protecting the interests of the latter. Furthermore, Condusef has the faculty to supplement for the deficiency of the claims filed by users.
Once Condusef receives a complaint from the insured or the beneficiary of an insurance policy, it notifies the insurance company. In accordance with the rules that govern the Condusef process, the insurer is obligated to deliver a report to Condusef answering the complaint and indicating therein the status of the relevant insurance policy.
In said report, the insurance company must explain the reason or arguments for which it considers that the petition of the claimant is appropriate or inadmissible. Subsequently, the insurer’s reply is notified to the user in order for them to express their agreement or disagreement.
In the event that the insurer deems the user’s request to be appropriate, the conciliation process ends at this stage, which normally happens in those cases where the insured require an account statement or simply want to know the status of their policies.
On the other hand, if by answering the claim, the insurance company explains that the user’s complaint is inadmissible, the policyholders generally request Condusef to carry out a conciliation hearing and, in result, Condusef sets a date for holding the hearing, requiring the insurer to render an additional report and display documents, under warning of the imposition a fine for failing to do so.
In the conciliation hearing, the insurance company could be requested to bring complementary information or documentation, scheduling a new date for the continuation of the hearing to enable the insurer to comply with Condusef’s requirements.
The purpose of the hearing is for the parties to reconciliate their interests, and because of this, the Condusef conciliator must formulate proposals for solutions. If both parties reach a common understanding they will sign an agreement, which will have res judicata and will entail execution.
If the parties do not reach an agreement, they will be informed by the conciliator that the dispute may be resolved through an arbitration procedure, where the arbitrator is Condusef itself. In the event that the parties do not submit to the arbitration, their rights remain intact to be exercised before a competent courts.
Technical opinion
If the parties do not reach an agreement and do not submit to Condusef arbitration, at the request of the insured, Condusef may issue a technical opinion, as long as there are elements that under Condusef criteria allow to assume that the claim is admissible.
Said technical opinion shall be an enforceable instrument (executive title) in favour of the user, when it establishes an unfulfilled, certain, enforceable and liquidated contractual obligation against the insurance company. Pursuant to Mexican regulations, an executory instrument, such as the technical opinion, may be enforced by means of a Summary Commercial Proceeding.
In connection with the above, the insured will have a period of one year to file a lawsuit supporting it in the technical opinion issued by Condusef. At the beginning of the Summary Commercial Proceeding, the plaintiff may seize the insurance company’s assets as a precautionary measure to guarantee the amount payment established in the technical opinion.
Technical reserve
In the case that Condusef issues a technical opinion favourable to the claimant, recognising a breached, certain, enforceable and liquidated contractual obligation, Condusef will order the insurer to constitute a technical reserve for compliance with pending obligations, the sum of which shall not exceed the insured amount of the corresponding policy.
Benefits and importance of the conciliation process before Condusef
In the event of controversy between the parties, most dissatisfied policyholders begin a conciliation procedure before Condusef prior to filing a lawsuit.
Sometimes, when the claimants have the right to collect a certain amount of money, the parties manage to sign agreements, avoiding multiple judicial proceedings.
On the other hand, when the insured’s or the beneficiary’s claim is considered inadmissible, it is very important that the lawyers who represent the insurer present solid arguments before Condsuef in order to demonstrate the reasons why the request of the claimant is not admissible. It is vital to avoid mistakes that might allow the claimant to later file a lawsuit in which, as a consequence of an insurer mistake, the plaintiff can obtain a favourable final judgment.
In this way, with the arguments presented by the insurer’s defence, policyholders and beneficiaries are generally prevented from filing lawsuits later, because when they analyse the information provided by the insurance company, the claimant understands the reasons why his request is inadmissible or, in case the claimant decides to sue, the consistency of the arguments presented before Condusef is essential to deploy a strong defence in Courts.
In the event that a claim filed before Condusef is not duly attended to, there is a risk that a favourable technical opinion will be issued to the claimant, which could influence the judicial process that the insured eventually initiates, since, on repeated occasions, judges give a relevant value to these opinions when resolving legal disputes.