By means of Judgment STC1769-2026, the Civil, Agrarian and Rural Chamber of the Colombian Supreme Court of Justice (the “SCJ”, for its acronym in Spanish) resolved a constitutional action (acción de tutela) filed by the beneficiary of a life insurance policy against a decision issued by the Superior Tribunal of Cúcuta.
The dispute arose following the death of the insured, after which the beneficiary submitted a claim to the insurer that issued the insurance. The insurer denied the claim, alleging misrepresentation in the duty of disclosure, and subsequently filed a lawsuit seeking the nullity of the insurance contract.
In the proceedings, among other issues, it was debated whether the insured had breached the statements made at the time of entering into the insurance contract, particularly those relating to his personal circumstances and to the fact that he had not participated in unlawful activities, which were incorporated into the insurance contract as a warranty. In fact, the insured declared in that moment that “his occupation is permitted by law, and that he has not engaged, does not engage, and will not engage in unlawful or high-risk activities,” statement was incorporated into the insurance contract as a warranty.
The insurer sought the nullity of the insurance contract based on misrepresentation in the duty of disclosure, arguing that there was evidence that the insured had engaged in unlawful activities prior to entering the insurance contract. For its part, the court of first instance denied such claims, considering that the alleged non-disclosure was not proven, nor the link between the omitted facts and the cause of the insured’s death.
The appellate court reversed the first instance decision and instead declared the nullity of the life insurance contract, not on the basis of the alleged misrepresentation of the policyholder under Article 1058 of the Colombian Commercial Code, but rather due to the breach of the warranty pursuant to the final paragraph of Article 1061 of the same code.
The beneficiary filed a constitutional action against the appellate decision; however, the SCJ denied the claims, finding no defect that would justify intervention by the constitutional judge. In this context, the SCJ reiterated the main considerations set forth by the appellate court:
- Misrepresentation and warranty
The SCJ emphasized that the appellate court properly reframed the dispute: although the insurer alleged misrepresentation under Article 1058 of the Colombian Commercial Code, the clause executed by the policyholder and the insured had to be analyzed as a warranty under Article 1061, as it constituted an express promise incorporated into the contract.
- Legal nature of the warranty
The SCJ reiterated that, pursuant to Article 1061 of the Colombian Commercial Code, a warranty constitutes a promise whereby the policyholder undertakes to perform or refrain from performing a certain act, or to affirm or deny a factual circumstance. This figure has an autonomous contractual nature, which distinguishes it from the duty of disclosure and justifies a differentiated legal treatment.
- Written form requirement
The SCJ upheld the criterion that a warranty must be set out in writing, either in the policy or in documents ancillary thereto, in accordance with Article 1048 of the Commercial Code. It further clarified that a warranty may be expressed in any form that clearly and unequivocally evidences the intention to grant it, provided that the language used allows it to be identified as an obligation undertaken by the policyholder.
- Warranty and its relationship with the insured risk
The appellate court reiterated the SCJ’s case law, stating that a warranty may be material or non-material with respect to the insured risk, depending on the terms agreed by the parties. Whether material or not, it must bear some relationship to the risk, “even if moderate or subtle.”
- Strict compliance with the warranty
The SCJ highlighted that a warranty must be strictly complied with, as it constitutes a contractual obligation of the policyholder. Accordingly, its breach, even if it does not relate to a material aspect of the risk, constitutes a violation that triggers the consequences provided under the insurance contract regime.
- Consequences of breach
Finally, it was reiterated that, when a warranty is breached at the time of entering the insurance contract, this gives rise to the relative nullity (voidability) of the contract. Conversely, where the warranty relates to an act or circumstance to be complied with after the contract has been entered into, the legal consequence is the termination of the contract as from the moment of the breach, in the exercise of a right exclusively vested in the insurer.
In the case under analysis, the appellate court found sufficient evidence to establish that the insured breached the warranty in respect of facts existing prior to the execution of the insurance contract and, accordingly, declared the relative nullity (voidability) of the contract, a decision that was upheld by the Supreme Court of Justice.