The Civil and Commercial Code of Argentina and the Insurance Law
The contract of insurance is governed in Argentina by the Insurance Law Number 17,418 (Ley de Seguros or LS), incorporated to the current Commercial Code. By Law Number Law 26,994, Argentina approved a new Civil and Commercial Code (Código Civil y Comercial de la Nación or CCyCN) effective as from 1 August 2015. The CCyCN abrogates the current and separate Civil Code and Commercial Code.
Pursuant to Section 5 of Law Number 26,994 “The laws that currently integrate, supplement or are incorporated into the Civil Code or the Commercial Code, except for the provision of Section 3 of this law, remain in effect as laws that supplement the Civil and Commercial Code of the Nation approved by Section 1 herein“. Accordingly, certain existing laws that supplement or are incorporated to the current Commercial Code will remain in effect as laws supplementing the CCyCN. This includes the said Insurance Law Number 17,418, which will therefore supplement the CCyCN and remain in force changeless. However, certain modifications to contractual and obligational provisions introduced by the CCyCN may impact on contracts of insurance.
As to contractual law, the CCyCN regulates the so-called adhesion contracts (or contracts entered into by adhering to predisposed general clauses. CCyCn, Articles 984 through 989). Insurance law is considered one of this adhesion contracts since for most part the insured party may not negotiate nor draft any of the content but to adhere to the general clauses unilaterally drafted by the insurance company. Thus, more stringent provisions will apply to the insurance agreement, as to the clear, complete and legible wording of the clauses, ambiguity of its content, abusive clauses, etc. In this line, clauses referring to documents or information not provided by the insurer, distorting obligations of the insured, extending the rights of the insurance company, or clauses not reasonably predictable, will be deemed unwritten.
Further, the dispositions protecting consumers under the CCyCN (Articles 1,096, through 1,192) and specific consumer legislation (Law Number 24,240) may also apply to insurance contracts. Thus, when in doubt, the interpretation that is more favorable for the consumer will prevail. Therefore, all consumer protective dispositions contained in the CCyCN and Law Number 24,240 must be thoroughly reviewed when now developing insurance contracts.
Regarding civil liability in general and the extension of damages, the loss of chance iwill be expressly governed by the CCyCN (Article 1,739). Besides, compensation of damages in case of injuries or physical or psychological disability will be calculated according to a mathematical formula: the judge must award the injured or handicapped human person enough capital so as to investing it and obtaining enough proceedings to cover the diminution of his / her capabilities to perform productive activities; the awarded capital should exhaust within the term the affected party might have reasonably continued to perform such activities (Article 1,746). As this criterion clashes with the general principle of full indemnification for damaged people, given that human life and its necessities may not be only viewed upon the basis of sheer productive capabilities, this legal disposition will surely receive constitutional challenges. In this regard, Argentina´s Supreme Court of Justice, in re Aróstegui, Pablo Martín c/ Omega ART S.A y otra (04/08/2008) has upheld that to compensate human damages mathematical formulas do not apply, because they do not weigh all the losses an injured person suffers in the other aspects of his / her life besides the productive one (e.g. social relationships and interactions, everyday and extra work activites, etc.).
Finally, the CCyCN´s mandatory provisions will apply to ongoing contractual relationships and not just those entered into after the CCyCN, which should be specifically addressed with due anticipation.
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Mario E. Castro Sammartino
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