By a recent decision, the Civil, Agrarian, and Rural Chamber of the Supreme Court of Justice (the “SCJ”) affirmed, in a constitutional rights protection action, the ruling that had denied the claims brought by a consumer in a financial consumer protection action before the Delegation for Jurisdictional Functions of the Colombian Financial Superintendence (the “CFS”).

The dispute arose from a group life insurance with coverage for total and permanent disability, purchased by the claimant through the distribution network of a banking institution, pursuant to a network usage agreement entered into between the bank and the insurer.

The insured filed a claim with the insurer seeking payment of the insured amount, based on an assessment of loss of earning capacity (LEC) exceeding 50%, structured as a disease of common origin. However, the claim was denied by the insurer on the grounds that although the loss exceeded 50%, the requirements set forth in the insurance policy for the occurrence of a covered loss were not satisfied.

Subsequently, upon filing a financial consumer protection action, the claimant argued that the insurer disregarded the assessment submitted and that, in any event, the bank should be held jointly liable for the indemnity, given that the insurance policy had been marketed through its distribution channels. Finally, the claimant challenged the validity and enforceability of the general terms and conditions of the insurance contract, particularly the definition of “total and permanent disability.”

The SCJ, in deciding the appeal against the tutela judgment rendered by the Superior Tribunal of Bogotá, which, in turn, had upheld the decision of the CFS, affirmed both rulings and denied the claimant’s claims against the bank and the insurer, on the basis of the following considerations:

1. Occurrence of the insured event and total and permanent disability coverage

   The SCJ affirmed the decision declaring proven the defense of “non-occurrence of the insured event,” concluding that the requirements for triggering total and permanent disability coverage, as provided under the insurance contract, had not been met.

   The SCJ further clarified that the terminology used for such coverage did not correspond to the notion of disability commonly applied, but rather to the specific definition set forth in the appendices to the general terms and conditions, which required a permanent loss of the ability to independently perform three or more basic activities of daily living.

   In the specific case, the claimant only established a 51% loss of earning capacity, without demonstrating an inability to perform such activities. Accordingly, the circumstances did not fall within the scope of the insurance coverage, and payment of the insurance benefit was not warranted.

2. Joint and several liability of the credit institution

   The SCJ reaffirmed the position adopted by the lower instances and concluded that no joint and several liability existed between the credit institution and the insurer with respect to the payment of the claimed insurance benefit.

   This conclusion was based on the fact that the network usage agreement, entered into between the bank and the insurer, had the sole purpose of promoting and managing the marketing of certain lines of business (individual life, group life, and personal accident insurance), and did not provide for any joint and several liability in connection with the payment of insurance benefits owed by the insurer.

   The SCJ further clarified that, even though the credit institution was authorized to collect insurance premiums, such circumstance did not render it jointly and severally liable for the insured obligation.