In a recent 2025 ruling, the Council of State (“CE” for its acronym in Spanish) issued a decision regarding the statute of limitations applicable to insurance contracts linked to fiscal liability proceedings initiated prior to the enactment of Law 1474 of 2011.

Background

An insurance company filed a claim for annulment and restoration of rights against the Office of the Comptroller General of the Republic (“CGR” for its acronym in Spanish). The claim sought to annul a fiscal liability ruling in which the insurer had been declared a civilly liable third party.

The insurer argued that the action arising from the insurance contract was time-barred, since the ordinary two-year statute of limitations established in Article 1081 of the Colombian Commercial Code had already elapsed. The court of first instance annulled the ruling and held that the insurer was not liable to pay the indemnity.

The CGR appealed the first-instance decision before the CE, arguing that the statute of limitations set out in the Commercial Code did not apply in fiscal liability cases, as the provisions of Law 610 of 2000 are considered public policy laws.

The CE ruled in favor of the insurer and found it not liable for the payment of the indemnity, based on the following:

Key Considerations

1. Civil nature of the insurer’s liability
   
   The involvement of the insurer in the fiscal liability proceeding has a civil, rather than fiscal nature, as the insurer is brought in as a civilly liable third party due to the characteristics of the insurance contract and the risk covered.
   
   Accordingly, any liability attributed to the insurer is of a civil or contractual nature, never fiscal. Its role in the proceeding is limited to ensuring the prompt and effective payment of damage caused to public assets.
    
2. Effects of Law 1474 of 2011 on prescription periods
   
   Law 610 of 2000 did not establish a specific statute of limitations for insurance contracts linked to fiscal liability proceedings. For cases prior to the entry into force of Law 1474 of 2011, the applicable statute of limitations for actions arising from the insurance contract was Article 1081 of the Commercial Code.
   
   Nowadays, as of the entry into force of Law 1474 of 2011, a unified five-year statute of limitations applies to insurance contracts linked to fiscal liability proceedings.
    
3. The CGR’s role in the insurance contract
   
   The CGR argued that the Commercial Code, and specifically Article 1081 on prescription did not apply to it because it was not a direct party to the insurance contract. The CGR maintained that its public law function of fiscal oversight should be governed by fiscal control rules.
   
   However, the CE held that even though the CGR is not a party to the insurance contract, in seeking to enforce the indemnity derived from such contract, it is subject to the two-year statute of limitations established in Article 1081 of the Commercial Code. This term applies to all parties, regardless of their status or role in the contract.
    
4. Conclusions
   
   The ruling reaffirms that the liability of insurers in fiscal liability proceedings is of a civil, not fiscal nature.
   
   Before the enactment of Law 1474 of 2011, the applicable statute of limitations was set forth in Article 1081 of the Commercial Code. However, said new law introduced a unified five-year limitation period for cases initiated after it came into force.

For more information, please contact our Insurance and Reinsurance team.