Liquidation of Seguros Sucre in Ecuador – Basic Considerations

There is quite a bit of market concern with the publication of the third appeal to creditors on the official page of Seguros Sucre, now in liquidation.  The notification can be found here. The function of these communications is to notify the public about the status of the liquidation process and get creditors to register their claims and debts receivable from the insurer.  Several notification dates have been discussed but it is safe to assume that all insureds should register their claims by April 26th.  In the event that insureds and others do not register their potential credits, the consequence is that they will not be taken into account by the liquidator ex officio, and will only be collectable via litigation.  The administrative claim process that has in the past been used by several insureds to put pressure on local companies would no longer be available, as Seguros Sucre is now in an special liquidation procedure.

The aforementioned notification does not carry suspensive effects and, therefore, all claims in progress and notified to the insurer must follow their normal procedure. This means that  Petroecuador adjustment process must continue, in order to be able to determine the occurrence of losses and their proper quantification within the coverage afforded by the respective policies. It should be noted that the insurer may deny coverage of the claim with due motivation.

It is important to point out that, in accordance with article 62 of the General Insurance Law, the order of priority for payment in a liquidation process contemplates first life claims and then general insurance claims.

Each claim is independent and the resources allocated for its payment should not be used for other purposes, under penalty of imposing sanctions on the official who fails to comply with this principle.

In order to carry out its job, the liquidator is entitled to close and settle the claims, as presented to him, not necessarily resorting to litigation unless warranted.   

 

This article was co-authored by René De Sola, partner at Tobar ZVS, Kennedys associate office in Ecuador.