Costa Rica |
General questions | Yes/
No/ N/A | Additional comments, if any. |
1 | Does the country that you are reporting on follow common law jurisprudence? | No | |
2 | If the answer to the above question is no, does the country you are reporting on follow a civil code? Please describe the judicial system in short. | Yes | Costa Rica’s legal system is based on Continental Civil Law. The current Civil Code dates from the late 19th century, with a more recent Commercial Code (1964) and Insurance Contracts Law (2011). Law is statutory in nature, while the reiterated doctrine upheld by the Supreme Court is used to interpret and apply the law. Government is organised through three independent branches: legislative, judicial and executive. Judges are career appointees. There are no juries. |
3 | Please provide a brief description of the legal framework applicable to insurance coverage disputes in the country you are reporting on. In so doing, please consider the following questions: | | The main insurance regulations in Costa Rica are contained in two statutes: the Insurance Market Law (Law No 8653 of 2008) and the Insurance Contracts Law (Law No 8956 of 2011). The former organises the market participants and regulatory bodies (eg, licensing, capital requirements, supervisory powers, fines, etc), while the latter governs insurance contracts themselves. Administrative regulations supplement the statutory provisions and are issued by the National Council for the Supervision of the Financial System (CONASSIF). CONASSIF has issued regulations on matters such as licensing of market participants, insurance commercialisation/distribution, mass market products, solvency, consumer claims, etc. |
4 | Does the insured bear the burden of establishing coverage of a claim, or does the insurer bear the burden of establishing no coverage? Please give a short description of the legal basis in your country. | | Under Article 43 of the Insurance Contracts Law, the insured has the burden of showing that a covered loss has occurred. The insured most show not only the amount of the loss, but that the loss constitutes a ‘covered loss’ under the insurance contract. Conversely, if the insurer disputes coverage, the insurer is required to show that no coverage exists by proving that the event does not configure a ‘covered loss’ according to the policy (eg, non-covered, exclusion, etc). |
5 | Are coverage provisions in policies interpreted broadly or is there a presumption in favour of coverage? Please give a short description of the legal basis in your country. | | Under the Insurance Market Act, any ambiguity as to the legal or contractual provisions applicable to an insurance claim must be resolved in the manner most favourable to the insured. This principle applies both at the administrative level and in court or arbitration. The principle only applies to the interpretation of legal rules, not to the factual circumstances, which must be proved by the party invoking such circumstances. |
6 | Are exclusions interpreted narrowly or is there a presumption against finding that an exclusion to coverage applies? Please give a short description of the legal basis in your country. | | Under the Insurance Market Act, any ambiguity as to the legal or contractual provisions applicable to an insurance claim (such as exclusions) must be resolved in the manner most favourable to the insured. This principle applies both at the administrative level and in court or arbitration. The principle applies only to the interpretation of legal rules, not to the factual circumstances, which must be proved by the party invoking such circumstances. |
7 | Are there universally accepted definitions for: - event
- occurrence
- damage
- cause
- originating cause
- natural peril
- force majeure
- loss
- consequential loss
If the answer is yes, please give a short description of each definition and the legal basis for that definition (ie, a rule of law, case law etc). | | The laws do not contain universally accepted definitions for ‘event’, ‘occurrence’, ‘cause’, ‘originating cause’ or ‘natural peril’. These definitions are to be found in the relevant contract(s). The law, as interpreted by the courts, does provide guidance on the concepts of ‘damage’, ‘cause’, ‘originating cause’, force majeure, ‘loss’ and ‘consequential loss’. damage This refers to the concept of ‘actual damages’ (damnum emergens), that is, the immediate and direct effect of the event. Courts have held that damages must be actual and not hypothetical. cause and originating cause Courts have developed the concepts of ‘proximate cause’ and ‘efficient cause’ as those that directly generate the damage, as distinguished from other factors that may contribute but that, by themselves, would not have generated the damage. force majeure The term is understood as situations that could not have been foreseen or that, if foreseen, could not have been resisted. loss This is defined in the Insurance Contracts Law as an future event not within the insured’s control that causes damages. More broadly, it is analogous to ‘damages’. consequential loss Understood as the concept of ‘perjuicios’, referred to the profit one does not make as a result of the actual damages suffered (eg, profits on transport services not rendered as a result of the vehicle being damaged in a crash). |
Loss causation | Yes/
No/ N/A | Additional comments, if any. |
8 | Did the country that you are reporting about issue lockdown, stay-at-home or no-travel restrictions in response to Covid-19? | Yes | Costa Rica issued different orders on different occasions during the pandemic. No strict lockdown was in place. People were able to move about and businesses were able to operate, albeit with reduced capacity in the case of such businesses being open to the public (eg, retail establishments, restaurants, entertainment venues, etc). No travel restrictions were in place between March and August 2020 with respect to international travellers coming into Costa Rica. |
9 | If the answer to the question above is yes, were such orders issued nationally, by state/region, or by local city/town. Please give a short description of the issuing authority and the orders issued. | | The orders were issued nationally by the Ministry of Public Health. The main orders had to do with limited capacity in public and commercial/retail venues, restricting traffic by licence plate numbers and time periods (both during the week and during the day), closure of ‘non-essential’ activities venues with a view to reducing crowds, recommended working from home for most businesses, etc. |
10 | If the answer to the above question is yes, were the lockdown, stay-at-home or no-travel restrictions mandatory or recommended? | | Except for working from home which was ‘recommended’, the remaining restrictions referred to above were mandatory. |
11 | If the country that you are reporting about did issue lockdown, stay-at-home or no-travel restrictions, were those orders suspended or revoked at any point in time? If the answer is yes, please give a short description of the timeline. | | The orders have been suspended and reinstated at various times depending on the health situation. The strictest period was from April to August 2021. As vaccination rates have increased in recent months, the restrictions have been relaxed or lifted altogether. International travellers were banned from March to August 2020. |
12 | If the answer to the above question is yes, were subsequent lockdown, stay-at-home or no-travel restrictions issued at any point in time? Please give a short description of the timeline. | | See response to Question 11. |
13 | Has the country that you are reporting about issued judicial opinions or guidance analysing whether Covid-19 is a ‘cause’ of insured loss? | No | We are not aware of any judicial opinions addressing this issue. |
14 | Has the highest court in the country you are reporting about issued judicial opinions or guidance analysing whether Covid-19 is a ‘cause’ of insured loss? If the answer is yes, please give a short description of the conclusions in the judicial opinions or guidance. | No | We are not aware of any judicial opinions addressing this issue. |
15 | If the answer to the question above is yes, did the highest court in the country you are reporting about determine that losses related to Covid-19 were ‘caused’ by the virus? Please give a short description of the conclusions in the judicial opinions or guidance. | N/A | |
16 | If the answer to the above question is no, did the highest court in the country you are reporting about determine that losses related to Covid-19 were ‘caused’ by government lockdown or stay-at-home orders? Please give a short description of the conclusions in the judicial opinions or guidance. | N/A | |
17 | Has the country that you are reporting about issued judicial opinions or guidance analysing whether Covid-19 is an ‘originating cause’ of insured loss? If the answer is yes, please give a short description of the conclusions in the judicial opinions or guidance. | No | |
18 | If the highest court in the country you are reporting about has not issued judicial opinions or guidance analysing whether Covid-19 is a ‘cause’ of insured loss, have other courts in the country issued such opinions? | No | |
19 | If the answer to the above question is yes, have courts in the country you are reporting on interpreted this issue consistently? In other words, is there uniformity in jurisprudence as to whether Covid-19 is a ‘cause’ of insured loss? Please give a short description of the conclusions in the judicial opinions or guidance. | N/A | |
20 | If the answer to the above question is yes, do courts in the country you are reporting about hold that losses related to Covid-19 were ‘caused’ by the virus? Please give a short description of the conclusions in the judicial opinions or guidance. | N/A | |
21 | If the answer to the above question is no, do courts in the country you are reporting about determine that losses related to Covid-19 were ‘caused’ by government lockdown or stay-at-home orders? Please give a short description of the conclusions in the judicial opinions or guidance. | N/A | |
22 | Has the highest court in the country you are reporting about issued judicial opinions or guidance analysing whether Covid-19 is an ‘originating cause’ of insured loss? | No | |
23 | If the highest court in the country you are reporting about has not issued judicial opinions or guidance analysing whether Covid-19 is an ‘originating cause’ of insured loss, have other courts in the country issued such opinions? If yes, please give a short description of the conclusions in such judicial opinions or guidance. | No | |
24 | Has the country that you are reporting about issued judicial opinions or guidance analysing whether Covid-19 is a covered ‘event’? | No | |
25 | Has the highest court in the country you are reporting about issued judicial opinions or guidance analysing whether Covid-19 is a covered ‘event’? Please give a short description of the conclusions in the judicial opinions or guidance. | No | |
26 | If the answer to the question above is yes, did the highest court in the country you are reporting about determine that losses related to Covid-19 were covered ‘events’? Please give a short description of the conclusions in the judicial opinions or guidance. | N/A | |
27 | If the highest court in the country you are reporting about has not issued judicial opinions or guidance analysing whether Covid-19 is a covered ‘event’, have other courts in the country issued such opinions? | No | |
28 | If the answer to the above question is yes, have courts in the country you are reporting on interpreted this issue consistently? In other words, is there uniformity in jurisprudence as to whether Covid-19 is a covered ‘event’? Please give a short description of the conclusions in such judicial opinions or guidance. | N/A | |
29 | If the answer to the above question is yes, do courts in the country you are reporting about hold that losses related to Covid-19 are covered ‘events’? Please give a short description of the conclusions in the judicial opinions or guidance. | N/A | |
30 | If the answer to any of the above questions regarding your country’s jurisprudence was no, please comment on whether there are any other official sources or authorities that have issued contributions to the interpretation of Covid-19 in the context of loss causation. | No | Although there has been talk of Covid-19 coverage issues in the local market, we are unaware of any case law from the courts or opinions of other administrative bodies or authorities (such as insurance supervisory bodies) interpreting this issue. This may have to do with the very limited or non-existent coverage for non-damage business interruption in the local market. |
Aggregation of claims | Yes/
No/ N/A | Additional comments, if any. |
31 | Does the country you are reporting on permit aggregation of claims arising out of a single originating cause? Please give a short description of the legal basis. | | The law in Costa Rica does not regulate this issue expressly. Therefore, it is subject to contract/policy terms. |
32 | Does the country you are reporting on permit aggregation of claims arising out of a single cause? Please give a short description of the legal basis. | | The law in Costa Rica does not regulate this issue expressly. Therefore, it is subject to contract/policy terms. |
33 | Does the country you are reporting on permit aggregation of claims arising out of a single event? Please give a short description of the legal basis. | | The law in Costa Rica does not regulate this issue expressly. Therefore, it is subject to contract/policy terms. Usually, policies will have clauses such as the ‘72 hour clause’ typical in many property policies. |
34 | Does the country you are reporting on use an accepted test for determining whether claims can be aggregated? For example, does the country you are reporting on apply to four unities test to determine whether aggregation is appropriate? Please give a short description of the legal basis. | No | This issue is not regulated in Costa Rican law. |
35 | Have courts in the country you are reporting on issued jurisprudence concerning whether insureds can aggregate claims arising out of Covid-19? Please give a short description of the legal basis. | No | |
36 | Has the highest court in the country you are reporting about issued judicial opinions or guidance concerning whether insureds can aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance. | No | |
37 | If the answer to the question above is yes, did the highest court in the country you are reporting about determine whether insureds can aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance. | N/A | |
38 | If the highest court in the country you are reporting on has not issued such jurisprudence, have other courts in the country you are reporting on interpreted this issue consistently? In other words, is there uniformity in jurisprudence as to whether insureds may aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance. | No | Other courts have not issued decisions on this subject. |
39 | If the answer to the above question is yes, do courts in the country you are reporting about permit insureds to aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance. | N/A | |
40 | Do the courts in the country you are reporting on permit an insured to aggregate claims related to multiple properties or business locations arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance. | | This has not been decided on by the courts. As the law does not govern this specific issue, the question would be decided based on the relevant policy’s or policies’ terms. |
41 | Do the courts in the country you are reporting on permit an insured to aggregate claims related to multiple lockdown or stay-at-home orders arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance. | | This has not been decided on by the courts. As the law does not govern this specific issue, the question would be decided based on the relevant policy’s or policies’ terms. |
42 | Have courts in the country you are reporting on issued jurisprudence concerning whether cedents can aggregate claims arising out of Covid-19? Please give a short description of the legal basis. | No | |
43 | If the answer to the above question is yes, have courts in the country you are reporting on interpreted this issue consistently? In other words, is there uniformity in jurisprudence as to whether cedents may aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance. | N/A | |
44 | If the answer to the above question is yes, do courts in the country you are reporting about permit cedents to aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance. | N/A | |
45 | If the answer to any of the above questions regarding your country’s jurisprudence was no, please comment on whether there are any other official sources or authorities that have issued contributions to the interpretation of Covid-19 and aggregating claims. | No | On the reinsurance aspects, there are also no other official sources or authorities that have issued any decisions or contributions on the subject. As Costa Rica is a small market and not a reinsurance hub, there are very few, if any, reinsurance disputes that are resolved locally. |
Property damage | Yes/
No/ N/A | Additional comments, if any. |
46 | Have courts in the country you are reporting on issued jurisprudence concerning whether losses arising from Covid-19 qualify as property damage losses? Please give a short description of the legal basis. | No | |
47 | Has the highest court in the country you are reporting about issued judicial opinions or guidance concerning whether losses arising from Covid-19 qualify as property damage losses? Please give a short description of the conclusions in such judicial opinions or guidance. | No | |
48 | If the answer to the question above is yes, did the highest court in the country you are reporting about determine whether losses arising from Covid-19 qualify as property damage losses? Please give a short description of the conclusions in such judicial opinions or guidance. | N/A | |
49 | If the highest court in the country you are reporting on has not issued such jurisprudence, have other courts in the country you are reporting on interpreted this issue consistently? In other words, is there uniformity in jurisprudence as to whether losses arising from Covid-19 constitute property damage? Please give a short description of the conclusions in such judicial opinions or guidance. | No | |
50 | If the answer to the above question is yes, do courts in the country you are reporting about permit insureds to aggregate claims arising out of Covid-19? Please give a short description of the conclusions in such judicial opinions or guidance. | N/A | |
51 | If the answer to any of the above questions regarding your country’s jurisprudence was no, please comment on whether there are any other official sources or authorities that have issued contributions to the interpretation of Covid-19 and property damage. | No | |
Exclusions | Yes/
No/ N/A | Additional comments, if any. |
52 | Has Covid-19 been deemed a ‘natural peril’ in the country you are reporting on? Please give a short description of the legal basis and relevant jurisprudence. | No | To our knowledge, this has not been reviewed by the courts. |
53 | Has Covid-19 been deemed force majeure in the country you are reporting on? Please give a short description of the legal basis and relevant jurisprudence. | No | To our knowledge, this has not been reviewed by the courts. |
54 | Is Covid-19 acknowledged as a notifiable disease in the country you are reporting on? Please give a short description of the legal basis and relevant jurisprudence. | Yes | Under the Public Health Law and relevant Ministry of Public Health decrees, Covid-19 is classified as a notifiable disease. Positive Covid-19 tests are automatically notified by clinics and laboratories to the Ministry of Public Health. Any person diagnosed with Covid-19 is issued mandatory isolation orders for ten days as are persons who live in the same household, even if they do not have a positive Covid-19 test. Violation of the order can lead to criminal prosecution and fines. |
55 | Is it common for insurance policies issued in the country you are reporting on to include a pandemic or virus exclusion? Please give a short description of the legal basis and common insurance practice. | Yes and No | Some lines of insurance (such as health insurance) do contain pandemic and epidemic exclusions, even prior to the Covid-19 pandemic. Life insurance policies sometimes contain them, although we have also seen many that did not. |
56 | Have any courts in the country you are reporting on determined that a pandemic or virus exclusion is void as against public policy in the context of Covid-19? Please give a short description of the legal basis and relevant jurisprudence. | No | |
57 | Have any courts in the country you are reporting on otherwise determined that a pandemic or virus exclusion is unenforceable in response to Covid-19? Please give a short description of the legal basis and relevant jurisprudence. | No | |
58 | If the answer to any of the above questions regarding your country’s jurisprudence was no, please comment on whether there are any other official sources or authorities that have issued contributions to the interpretation of Covid-19 in the context of exclusions. | No | There have been no other official sources or authorities that have issued contributions to this issue. |
Regulatory oversight | Yes/
No/ N/A | Additional comments, if any. |
59 | Have insurance regulators in the country you are reporting on issued directives concerning coverage for claims arising out of Covid-19? Please describe the regulations that have been implemented. | No | Supervisory authorities have required insurers to report Covid-19-related claims on a regular basis. Moreover, at the height of the pandemic, the insurance supervisor recommended that insurers abstain from distributing dividends to maintain capital. However, this was only a recommendation and not mandatory. |
60 | Are regulators requiring or encouraging insurers to provide grace periods to insureds to make payments on premiums? If yes, please give a short description of the legal basis and relevant guidance. | No | Although it was not required by regulators, as a matter of market practice many insurers did provide grace periods and other facilities (eg, premium discounts or rebates for lower risk exposure in car lines). |
Government action | Yes/
No/ N/A | Additional comments, if any. |
61 | Has the government in the country you are reporting on implemented relief measures for losses sustained as a result of Covid-19? | No | |
62 | If the answer to the above question is yes, are the relief measures available to both individuals and businesses? | N/A | |
63 | Briefly describe the types of relief measures available to individuals and businesses. | N/A | |