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Premium Increase

The provisional figures published by the Insurance Superintedency on fiscal year ending June 30, 2001, show that premium income kept its growing trend in spite of the recession. This growth refers specially to lines of insurance where development is not directly related with general business activity, such as workers compensation (where the insurance scheme was recently modified), pension-funds related life insurance and life annuities, where development is linked to the private retirement scheme. On the other end, motor insurance shows a premium income fall that would reflect the recessive environment in vehicle renewal.
During fiscal year ending June 30, 2001, premium income was of $ 6.95bn against $ 6.67bn in 1999/2000 (+4.2%).

Five Years of the New Workers Compensation Scheme

The Workers at Risks Act 24557 ( Ley de Riesgos del Trabajo - LRT ), replacing the ancient workers compensation rules of the early 20th century, was passed by Congress five years ago. As a marker of this anniversary, the Labor Ministry and the Workers Risks Superintendency ( Superintendencia de Riesgos del Trabajo - SRT ) organized a seminar to assess the results of the new system.

Organizations involved in this field insisted that society as a whole should be deeply involved in prevention and safe work rules as an immovable part of labor culture. Before the approval of LRT, worker compensation accidents depended of the employer's good will. Employers were responsible for such accidents, and workers had virtually no protection if businessmen did not answer for the consequences, fatal or not, of a labor-related accident or disease. As an important part of the devices to close this void, labor lawyers went to court with no possibility of a previous negotiation, and civil courts ruled each case on its own merits, setting amounts that were not always fair, with no compensations in kind nor an immediate payment of compensations.
LRT law, in force since 1996, was subject to major changes. Vague covered hazards and the medical and other services for affected workers were clarified. This limited as well the causes for suing and even to commit frauds, involving 50,000 lawsuits a year at an average cost of 210,000 pesos each - an annual total of 10.5 billion pesos (1 peso = 1 dollar). Thus, the balance for all parties is very favorable.
However, some sectors argued that LRT is unconstitutional and subject to improvement. The remarks about compensations being unfair, the exclusions of some work-related diseases limited to a list included in the law and the extension of benefit payments to a wider range of dependents were solved through Executive Decree 1278/2000 that deepened both improvements and benefits.
This was reflected in a number of ways: compensations were improved, by adding to death cases and to permanent disabilities of more than 50% a one-off additional payment; compensation values were increased from $ 100,000 to $ 180,000, and monthly compensation payments are made through life annuities; previously excluded diseases have now been included; the list of beneficiaries was extended, including parents or relatives dependent on deceased single workers; and plans to increase prevention and security measures were implemented.
Five years after starting the new system, covered employers passed from 370,000 to 440,000 (+19%), and insured workers are now 4,900,000 against 3,900,000 at the outset (+26%). Premiums during the five-year period exceeded the 3 billion mark, with an annual income of $ 655M; after the modifications to the LRT law, this annual estimates increases to 800M. Insurers handled an annual average of 450,000 claims, and there were 116 deaths per million lives at risk. Some ratios speak for themselves, a 0.74% accident incidence in Argentina against 0.76% in Chile, where a similar system has been in force for three decades, and 0.96% in Spain, with an experience going back for more than a century.
Lawsuits plummeted from 50,000 a year to only 2,000. Finally, the average employer contribution cost to the system is 2% of payrolls against 6.8% under the old, pre-LRT law scheme. Labor accident ratios have fallen as well (221 workers per million to 182 after Decree 1278/2000).

7th Iberian Latin American Insurance Law Congress

The 7th Iberian Latin American Insurance Law Congress will take place in Rosario city, Santa Fe province, on November 7/10, 2001.
The Insurance Law Institute of the Rosario Law and Social Science School organizes this event together with the Argentine section amd the Ibero-American Committee (CILA) of AIDA (International Insurance Law Association). The congress will take place at the Plaza Real Hotel, in Rosario.
Some of the subjects to be discussed: "E-Commerce Risks Insurance"; "Reinsurers' Direct Liability Towards the Insured"; "Intermediation Trends in the 21st. Century"; "The Insured's Ombudsman - Tasks and Experience"; "New Approaches to Personal Insurance"; "D&O Liability Insurance".
Renowned Argentine and foreign speakers will participate. All members of AIDA-CILA national sections may submit individual papers referred exclusively to the core issues to be discussed at this gathering. Additional information can be obtained by e-mail ( or at 1390 Balcarce St., 1st fl. A, 2000 Rosario, Santa Fe, Argentina.
Dr. Eduardo Mangialardi presides the organizing committee, and Dr. Claudio H. Speyer, chairman of the Argentine Insurance Law Association (National AIDA chapter), is another of the major participants. Registrations can be sent to the Rosario School of Law and Social Sciences as follows:
Facultad de Derecho y Ciencias Sociales de Rosario, Pontificia Universidad Católica Argentina, Avda. Pellegrini 3314, 2000 Rosario, Santa Fe, Argentina, Phone/Fax: (54-341) 430-5902 or 437-0201, E-mail:

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