Insurance and reinsurance law considerations and strategies

derecho de seguros y reaseguros en panamá : Insurance and reinsurance law in Panama

Those who follow the national and international macroeconomic landscape know that insurance and reinsurance law is one of the essential pillars for economic growth and perhaps one of the least talked about.

For more than 10 years, Panamanian legislation has been regulating both processes. Law 12 of April 3, 2012, regulates the insurance activity and establishes other provisions and contractual agreements between insurers and insured parties, stipulating the terms on which their relationship will be carried out equitably and transparently.

During these years, since its enactment, Law 12, 2012 has been amended and added by Law 62 of October 5, 2012, Law 38 of June 11, 2013, Law 124 of December 31, 2013, Law 24 of October 28, 2014, and Law 65 of December 9, 2016.

In this delicate balance between risk distribution and protection measures, insurance and reinsurance law thrives in Panama.

Panama has an advanced legal framework that positions it as a significant nucleus for the insurance and reinsurance companies, both at regional and global levels. Thus, companies interested in insurance their activities need to understand deeply the legal aspects involved.

It includes learning about compulsory insurance, understanding the conditions under which indemnities are offered, adhering to the contract rules, and becoming familiar with the thorough claims process.

In addition, it is crucial to understand how international laws and traties impact reinsurance . Law 63, 1996, regulate these contracts. This law establishes the bases for the control, previous authorization, and inspection of these operations within the country, contributing to the excelent functioning of reinsurance operations in Panama.

Law 63 of September 19, 1996, establishes the general framework within which the reinsurance market in the Republic of Panama develops and under which contracts are entered into with insurance companies in which the reinsurer takes over a risk already covered by the insurer, without altering the agreement between the insurer and the insured. In all these years, it has only been repealed in Article 11 by Law 12 of April 3, 2012; however, the rest of its regulatory body has remained intact since its begining.

Strategies for success

The success in taking advantage of this legal framework revolves around strategic planning. That is where expertise in insurance and reinsurance law in Panama comes to strengthen a business against the unexpected:

  • Risks assesment: Start by thoroughly assessing your business risk. Experienced legal advisers can help you identify your sector’s specific responsibilities to ensure complete coverage.
  • Tailored insurance solutions: Generic insurance policies only adapt to some of your business needs. Instead, opt for policies tailored to your business’s unique risks and operational nuances.
  • Reinsurance diversification: A direct insurer gains access to different markets and protection levels by diversifying its reinsurance providers, distributing and diluting its risks.
  • Regulatory compliance: keeping up-to-date with evolving insurance laws and regulations is not just about complying with them, but also about taking advantage of emerging opportunities that the new law may present.
  • Dispute resolution mechanisms: Effective dispute resolution mechanisms within your insurance contracts are essential in planning for the least favorble scenary.

Business growth in the insurance sector

Interaction between local legal traditions and global trends is a distinctive aspect of the insurance sector in Panama. This dynamic combines civil and corporate law practices with international models, thus creating a unique legal landscape for companies that present challenges and opportunites.

For entrepreneurs who wish to see their entrepreneurship flourish, having a partner such as Monica Castillo Arjona-Law Firm could be the catalyst they need. In addition to providing solid legal guidance on insurance and reinsurance law in Panama, our approach seeks to align strategic business planning with legal foresight.

Beyond mere compliance and mandatory checkboxes, we seek to strengthen your business strategy using thoughtful legal considerations and an insightful approach to obtain innovative achievements.       


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