Limitations of Insurance Privatisation in Costa Rica

The total exclusivity requirement imposed by the National Institute of Insurance on agencies who sell their insurance, is an anticompetitive mechanism that is making it difficult for the market to open up.

Thursday, May 3, 2012

In his blog " Mercado Seguro " in, attorney and insurance specialist Said Breedy analyzes the criteria issued by the Commission to Promote Competition (COPROCOM) on the exclusivity clause in agency contracts with the National Institute Insurance (INS) in place since 2007.

COPROCOM noted that "there are no anti-competitive practices in the contracts which include an exclusivity clause."

As well as pointing out that the criteria issued by COPROCOM does not take into account the need to interpret the rules "in favor of the genuine opening up of competition" ..accepting "that the legal exclusivity of agencies is only by line of insurance and not by Insurer, " Breedy shows the manifest intention of the INS to limit the commercial development of other insurers, when already in 2007, while still a long time off from the implementation of the formal opening of the insurance market, it already included an exclusivity clause in its contracts with the agencies in a preview of abuse of its dominant market power.

More on this topic

Fine Given for Anticompetitive Insurance Practices

September 2014

The Costa Rican State insurance company will have to pay $174,000 as a penalty for "improving any offer made by their competition to their customers."

The Antitrust Commission imposed a fine of 94 million colones ($174,000) on Instituto Nacional de Seguros (INS) in a case reported by the Superintendent of Insurance in 2011, a year after the opening up of the market.

Coca Cola Fined for Anti-Competitive Practices

July 2012

The penalty imposed by the Commission to Promote Competition in Costa Rica has been upheld after the First Chamber of the Supreme Court declared the last appeal filed by the company irrelevant.

The penalty for monopolistic practices, dating back to May 2004 was because the bottler apparently made exclusive contracts with vendors and fixed prices.

Another Insurer in Costa Rica

July 2012

Oceánica de Seguros, founded on Venezuelan capital, is the tenth insurance company to be incorporated into the Costa Rican market after its de-monopolization in 2008.

The superintendent of insurance, Javier Cascante, said the company, which is the eleventh to join the insurance market after its opening, will have a joint operating license, for personal and general policies.

Accusations of Anti-Competitive Practices in Insurance Industry

December 2011

The National Insurance Institute of Costa Rica is under investigation for price reductions that could constitute a violation of the Law on Promotion of Competition.

The open procedure by the Commission to Promote Competition (COPROCOM) is the only one that has been presented since the opening of the insurance market in 2008.