With the new Insurance Activity Law that came into effect on July 29, 2010, the government of Venezuela is taking steps to improve the insurance system and increase coverage. Currently, only 12 million of Venezuela’s 24 million people are covered by private health insurance.
The new law addresses issues such as social exclusion in private health insurance and the protection of consumer’s rights. The law also applies to companies supplying prepaid medicine and insurance cooperatives, and puts all insurance companies under greater regulation by the state.

Immediate treatment for emergency cases

One key change in the legislation requires emergency cases in private clinics to be treated immediately, rather than waiting for authorisation by the insurance company. According to legislators, this improves social justice, since it is deemed unfair for insurance employees without medical training to be able to decide if a patient arriving at an emergency clinic can be treated or not.

Inclusion of all illnesses and conditions
Pre-existing or acquired illnesses, such as congenital defects or obesity, must now be included in hospital, surgery and maternity insurance contracts. Under the new law, insurers must also provide legal reasons when rejecting claims requests.

Insurance companies must now also provide plans for retirees, pensions, the elderly, people with disabilities, and those with physical or mental illnesses.

Extension of obligatory insurance coverage
The law makes it obligatory to extend insurance coverage to employees earning less than 25 tax units per month - currently VEF 1,625 (USD 377). One aim of this coverage, known as the health solidarity plan, is to guarantee continued medical assistance to patients with chronic illness such as cancer.

State-owned companies
The legislation now authorises state-owned companies to function like insurance companies, in order to provide medical protection to their employees and their families.

Greater oversight
Under the new law, people who believe that their rights have been violated can apply to their community council, which is obliged to investigate and refer the complaint to the Superintendency of Insurance Activity. Furthermore, the Superintendency of Insurance Activity now has access to insurance companies’ information systems and can levy large fines for non-compliance with the law.

Separation of banking and insurance
In response to a recent insurance company scandal and the 1994 financial crisis in Venezuela, the new law prohibits financial links between the insurance and banking sectors. Banks are no longer allowed to insist that their clients take out insurance with a connected company, or to sell policies at bank branches.