San José, Costa Rica, since 1956

From Insurance Agent, With Love

A fictional Gringo who owns a fictional restaurant in the Central Pacific beach town of Jacó has a fictional ficus tree fall on the roof, and makes a claim to the insurance company through his fictional insurance agent. After the usual long delay, the agent writes the following letter to his client:

Dear Sir,

We are glad you were finally able to collect fully on your insurance claim. Sorry it took so long. I am afraid this is par for the course. We are dealing with a large, government-owned monopoly where bureaucracy reigns.

There is still no other company offering casualty insurance in this country, so there is nowhere else for you to get better coverage – for the moment. The legal monopoly enjoyed by the National Insurance Institute (INS) was revoked in mid-2008, and several insurance companies from abroad are in the process of securing from the new Insurance Superintendency (SUGESE) the permits to begin operations. But new ground is being broken, and it is time-consuming. Maybe by mid-2010.

Meanwhile, INS continues to operate with no apparent concern for the impending competition and, with the new antimoney-laundering requirements, paperwork has trebled. Seemingly fearful of being laid off for peccadilloes committed in the name of expediency, people within the organization have become absolutely inflexible. For example, original signatures are required in all cases; faxed or e-mailed forms are no longer allowed. Also, forms have to be handwritten, in one “hand” and one color of ink, and no erasures or amendments are tolerated.

Getting back to your claim, right at the start, we gave you a list of the paperwork required by the insurance company to process your claim, and there was a two-month delay when you told us you would not comply because “this is never required in North America.” I think you now realize that if INS asks for certain documents, that is exactly what they must get – or they will simply not process the claim. Unfortunately, there is no regular list of requirements for claim documentation, so the client has to go along with the whims and exigencies of the claim processors.

I’m sorry we did not report on progress. We feel it is pointless to relay to the client the different deadlines and repeated promises of “mañana” as their claims move through the bureaucratic maze. Also, we don’t like to expose ourselves to clients’ understandable compulsion to shoot the messenger.

And it was useless – counterproductive, in fact – for your restaurant manager to go directly to the insurance company to push things along; he must have frowned or raised his voice, because at that point the paperwork ceased to move, and we had to go down on bended knee to get it moving again.

Also, it is usual for a smaller claim settlement to be proffered. This is human nature in operation. If an insurance company employee authorizes payment of a claim for the full amount, eyebrows may be raised and there may be suspicions of collusion between the client and the employee, upon which the in-house gestapo may be summoned, causing much anxiety and possible nasty notations in the employee’s personnel file. Fortunately, you took our advice, refused the smaller payment and requested a reassessment.

I think you will agree that the further six-week delay to receive full payment was worthwhile. Remember that INS belongs to the government. Nobody is really watching the bottom line; thus, as an institution, it doesn’t mind paying out on claims, so the eventual full payment of your claim was assured.

We expect that when new insurance companies enter the market, INS will become more service-oriented – or it will be put out of business.

Hoping you are well, I am yours, truly…


The opinions and viewpoints expressed are those of the writer. Our purpose is to give the reader a better understanding of insurance in Costa Rica. For more information, contact David Garrett at 2233-9520 or david@

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