Insurance and risk management
The Chilean insurance market is sophisticated and open to foreign capital, with two features worth understanding before investing. The insurance contract is built in favor of the insured, with mandatory rules, and only companies incorporated in Chile may insure local risks, subject to narrow exceptions. The regulator is the Financial Market Commission, which requires an exclusive purpose, local incorporation and solvency standards.
LEGAL FRAMEWORK
Market structure and regulator
The market is developed, with international groups operating through local subsidiaries and two segments, life insurance and general insurance. Given the country’s high seismic exposure, local retention of catastrophic risk is limited and cross-border reinsurance is structural.
Insurance law rests on two statutes plus the regulator’s rules. The first is Decree with Force of Law No. 251 of 1931, of the Ministry of Finance, on Insurance Companies, Stock Corporations and Commodity Exchanges, which governs who may insure risks in Chile, the incorporation and operation of companies, their capital and solvency requirements and reinsurance. The second is the Commercial Code, which governs the insurance contract in Book II, Title VIII, Articles 512 et seq., entirely replaced by Law No. 20,667, published in the Official Gazette on May 9, 2013 and in force since December 1, 2013. On top of both sits the administrative regulation of the Financial Market Commission (CMF).
OGC view
Much of the operational rules live in CMF regulations, not the law; before closing catastrophic coverage, demand visibility into the reinsurance, because the reinsurer’s solvency matters as much as the coverage. The Financial Market Commission The insurance market supervisor is the Financial Market Commission (CMF), created by Law No. 21,000, published on February 23, 2017, which replaced the former Superintendence of Securities and Insurance (SVS). Under Law No. 21,130 of 2019, the functions of the former Superintendence of Banks and Financial Institutions (SBIF) were integrated into the CMF. Any reference to the former SVS in insurance matters is now understood as referring to the CMF.
OGC view
The CMF is your single regulatory counterpart; map its authorizations, registries and reports from the outset.
GIRO EXCLUSIVO
Incorporation, exclusive purpose and line separation
Under DFL 251, only Chilean insurance and reinsurance companies, with a corporate purpose exclusively for insurance, may insure risks in Chile. A narrow exception exists for foreign insurers, who may operate without local incorporation in limited areas such as international marine and aviation insurance, international transit cargo transport, and satellite-related risks. Outside these cases, a company incorporated in the country is required.
DFL 251 classifies companies into two groups and an entity may not operate in both. The first group, general insurance, covers damage to property or financial interests, such as fire, theft, civil liability or transport, with short-term obligations. The second, life insurance, covers personal risks, such as death, survival or disability, and includes annuities and savings, with long-term obligations. The financial regime imposes minimum capital, technical reserves and risk-based capital.
OGC view
Entry into Chile is not a branch, but a local company with its own capital and reserves; covering property insurance and life products requires two separate corporate vehicles.
INSURANCE CONTRACT
The insurance contract and the pro-insured rule
Article 512 of the Commercial Code defines insurance as the contract under which the insurer undertakes to indemnify a loss or provide a capital sum, annuity or other benefit upon the occurrence of the risk, in exchange for the payment of a premium. Following the reform, the contract is consensual and the policy evidences it without being a requirement for its existence.
The system is organized around protecting the insured, the weaker party in an adhesion contract. The provisions are, as a general rule, mandatory; the parties cannot modify them to the insured’s detriment, except where the law authorizes it, and the version most favorable to the insured prevails, including in cases of ambiguity. Mandatory status admits enumerated exceptions, with negotiable terms and models not filed with the CMF: under Article 542, in the first group for hull and marine and air transport insurance, and in contracts where the insured and beneficiary are legal entities and the annual premium exceeds UF 200, in which cases the policy must be signed by the contracting parties.
Good faith is the contract’s axis. Article 525 requires the policyholder to disclose, per what the insurer requested, the facts relevant to assessing the risk; if the insurer does not request that disclosure, it cannot later allege errors, omissions or inaccuracies. Policies operate on general conditions, filed with the CMF, and specific conditions, which prevail in case of conflict, and exclusions are a frequent focus of dispute.
OGC view
The law defaults in your favor and ambiguities are resolved against whoever drafted the policy; in the freedrafting cases of Article 542, everything depends on the negotiated text. Document the risk disclosure and review the exclusions.
SINIESTROS
Auxiliaries and claims settlement
Distribution and settlement are channeled through insurance trade auxiliaries, supervised by the CMF. Their core categories are:
Insurance brokers. Independent intermediaries registered with the CMF. They can place insurance with any authorized insurer and the law imposes on them a duty of informed advice to the client throughout the contract’s term. Alternative channels coexist, such as the sales agent, bancassurance and InsurTech platforms.
Claims adjusters. Also registered and supervised by the CMF, they investigate the loss to determine coverage and assess the indemnity. They must act with independence and impartiality; although paid by the insurer, their opinion is objective, non-binding and challengeable before the adjuster and then before an arbitrator.
Alternative channels also coexist, such as the sales agent, bancassurance and InsurTech platforms.
The settlement procedure is detailed in Supreme Decree No. 1,055 of 2012, of the Ministry of Finance, which approved the Regulation on Insurance Trade Auxiliaries and the Claims Settlement Procedure, amended by Decree No. 1,393 of 2013. Once the loss is reported, the insurer settles directly or appoints a registered adjuster, and the insured may reject direct settlement. The adjuster issues its report within 45 days, extendable to 180 days for marine hull or general average, and to 90 days for certain property damage claims with an annual premium above UF 100. Once the report is issued, the indemnity is paid within the regulatory deadline, and reinsurance cannot delay it.
If a dispute arises, the general rule is mandatory arbitration, unless the disputed amount is below UF 10,000, in which case the insured may go to the ordinary courts. The AACh also administers the Insured’s Ombudsman for claims up to UF 500 in general insurance and UF 250 in life; its decisions bind only the insurers and the insured retains the right to sue before the courts or SERNAC.
OGC view
Keep the UF 10,000 threshold in mind and document the claim with the arbitrator in mind.
REASEGURO
Reinsurance and foreign reinsurers
The 2013 reform set mandatory rules. Reinsurance does not alter the contract between the direct insurer and the insured, and payment to the insured cannot be delayed by pending reinsurance collection; the “funds withheld” clause was banned. Direct insurance and reinsurance disputes are subject to Chilean jurisdiction, and any agreement to the contrary is void; however, reinsurance disputes may be submitted to Law No. 19,971 on International Commercial Arbitration.
OGC view
Treat the BBB rating and the six-month replacement as a hard condition; the guarantee of payment to the insured, independent of reinsurance collection, cannot be waived.
S E G U R O S O B L I G ATO R I O S
Mandatory insurance and parametric insurance
Chilean law imposes certain mandatory insurance policies. Two are especially relevant for a company operating in the country: Social insurance against workplace accidents and occupational diseases (Law No. 16,744). Mandatory, borne by the employer from the first worker, administered by employer mutual associations and the Labor Safety Institute. Covered in more detail in Chapter 7. Mandatory Personal Accident Insurance (SOAP, Law No. 18,490). Required to operate any motor vehicle. Covers, within the statutory limits, death and bodily injury from accidents involving the insured vehicle. Its policy is standard and drafted by the CMF.
In the financial sector, insurance tied to mortgage loans is governed by Article 40 of DFL 251 and CMF General Rule No. 469.
OGC view
Law 16,744 insurance is your cost from the first worker, and SOAP is a condition to drive; build both into your compliance budget. Parametric insurance · Fintech Law A recent development is the enabling of parametric insurance by the 2023 Fintech Law, corresponding to Law No. 21,521, published on January 4, 2023. Parametric insurance pays out based on predefined event parameters, such as an earthquake’s magnitude or rainfall levels, instead of assessing damage case by case, and without the insured needing to prove the amount of the damage, speeding up payment in a country with high catastrophic exposure. The CMF has already issued the regulation. General Rule No. 546, of August 22, 2025, sets rules on parametric insurance, and General Rule No. 547, of the same date, amended General Rule No. 306 on technical reserves to incorporate the applicable treatment.
OGC view
For insurance indexed to measurable events, specific regulation already exists; design objective, demonstrable indices and verify the product complies with GR No. 546 and, where applicable, GR No. 547.
MARKET ENTRY
Entry of foreign insurers and investors
Anyone assessing entry into the Chilean insurance market faces three linked decisions. The first is structural: incorporating a Chilean exclusive-purpose company for each group in which it operates, with its own capital and reserves and CMF authorization to exist. The second is solvency and reinsurance, where each foreign reinsurer must meet the minimum BBB rating and appoint a representative in Chile. The third is market conduct, with most of the book under the mandatory regime and CMF texts, distribution through registered brokers and arbitration above UF 10,000. Anyone entering as an investor in an existing company must also consider foreign investment and corporate control rules; DFL 251 requires authorization to transfer a significant stake. See the Business legal structures and Foreign investment chapters.
OGC view
Resolve in order the corporate vehicle, reinsurance and solvency, and the CMF requirements; that sequence avoids reworking the structure later. Does your insurance program cover your operation’s real SCHEDULE A MEETING risks in Chile?
CLOSING
2026 regulatory developments
Regulatory and legislative status verified as of June 22, 2026. No investment decision should rely on a bill as if it were law in force.
Executive matrix · Reconstruction Bill · Permitting reform · Personal data · Cybersecurity · Pensions · How to get ahead
The developments, by actual status Matter Status Key date Regulatory impact
Personal data protection (Law Published, pending Dec. 1, 2026 New Agency, higher lawfulness and security standards, No. 21,719) effect data subject rights and sanctions regime.
Permitting reform / LMAS (Law In force, gradual 2026+ Common permitting system, maximum deadlines, enabling No. 21,770) implementation techniques, administrative silence, SUPER platform and regulatory stability.
Cybersecurity (Law No. 21,663) In force, technical 2026 Risk management duties, standards and incident reporting; development technical regulation under public consultation.
Pension reform (Law No. 21,735) In force, gradual 2025–2033 Additional employer contribution rising in stages to its full rate.
Working-hours reduction (Law In force, gradual 2026 / 2028 Dropped to 42 hours on April 26, 2026, on track toward No. 21,561) 40 hours, with no pay cut.
Desalination (Law No. 21,813) Published, deferred 2026 Framework for seawater use; key for water-intensive effect projects.
National Reconstruction Bill In Congress 2026 IDPC reduction and reintegration, tax invariability, formal (Bulletin No. 18,216-05) employment credit and transitional windows. Not yet law.
The 2023 Economic Crimes Law No. 21,595 is not a 2026 development, but remains a compliance priority because its effects on prevention models and corporate criminal liability keep consolidating. The law substantially expanded the catalog of offenses that can trigger that liability and reorganized the penalty regime. Its detailed treatment is in the compliance chapter. The practical consequence is that the prevention model stopped being a formal document and became an operational defense; companies that designed it under the previous framework should review it in light of the new catalog.
National Reconstruction Bill The broadest potential change for 2026 is a bill, not a law. On April 22, 2026, the Executive submitted to the Chamber of Deputies, with utmost urgency, the National Reconstruction and Economic and Social Development Bill (Message No. 018-374, Bulletin No. 18,216-05). As of June 22, 2026, it was moving through Congress and did not constitute law in force. Its content may change or it may not pass at all. Despite its name, it gathers more than forty measures on reconstruction, tax competitiveness, formal employment, housing, permits and investment. Everything that follows is legislative proposals still in Congress.
The most significant piece is the reduction of the First Category Tax (IDPC) and the reintegration of the tax system. The bill proposes a single 23% IDPC rate for the general regime and SMEs, with a staged phase-in for the general regime reaching 23% from business year 2029, and moving toward reintegrating the semi-integrated regime by gradually eliminating the IDPC credit clawback obligation.
Business year Proposed IDPC rate for the general regime Comment
2026 27% Current rate maintained.
2027 25.5% First proposed reduction step.
2028 24% Second proposed reduction step.
2029 onward 23% Proposed steady-state rate.
All of the above are legislative proposals still in Congress, not law in force.
Permanent measures and transitional windows The bill includes other permanent measures. It proposes eliminating the special 10% tax on capital gains from exchange-traded securities, restoring the treatment prior to Law No. 21,420. It creates a tax invariability statute for investments above USD 50 million. It introduces a formal employment credit of up to 15% of pay in the lowest bracket, phasing down to 0% above 12 UTM, and eliminates the SENCE training franchise. In housing, it proposes a voluntary, temporary 12-month VAT exemption on the sale of new homes with final occupancy permits, and a single 5% tax on gross rent from the third DFL 2 home onward.
On the transitional front it opens short-window opportunities. A twelve-month extraordinary voluntary declaration to regularize undeclared assets, foreign currency, crypto-assets and foreign income, with a single 10% tax dropping to 7% if the assets enter Chile and stay invested for at least five years. A 10% substitute tax on accumulated profits (as of December 31, 2025 or 2026) and pending withdrawals, exercisable within eight months of the eventual law’s publication. And a Treasury power to waive up to 100% of interest and up to 80% of fines on lumpsum payment, for obligations due through December 31, 2025, for 180 days from publication. On permits, it proposes streamlining procedures and reimbursing expenses when a favorable RCA is annulled.
OGC view
Even though the bill is not law, its potential effects justify incorporating it into scenario-based financial modeling now. Build a base case on current law and an alternative case on the bill, and revisit both as it moves through Congress. Transitional windows reward advance documentary preparation. REFORMS IN FORCE C LO S I N G · 2 0 2 6 R E G U L ATO R Y D E V E LO P M E N T S Permitting reform and data protection Permitting reform — Framework Law on Sectoral Authorizations (in force, being implemented) Unlike the previous bill, permitting reform is already law. Law No. 21,770, the Framework Law on Sectoral Authorizations (LMAS), was published on September 29, 2025 and is in force, but its rollout is gradual and depends on regulations, decrees and platforms issued throughout 2026. The LMAS establishes a common system for processing sectoral permits, with a standardized procedure and mandatory maximum deadlines, alternative enabling techniques replacing certain low-risk permits with a notice or sworn declaration, the option to invoke administrative silence, a single digital platform (SUPER) progressively made mandatory, and a regulatory stability regime of up to eight years for projects with a favorable RCA. The law does not modify SEIA environmental assessment and limits sectoral review to non-environmental matters when a favorable RCA already exists. Implementation is verifiable, with the compliance phase-in regulated by a decree with force of law published on February 10, 2026.
OGC view
Before building a permitting timeline, confirm whether the relevant permit has already been classified, whether it admits an alternative enabling technique, whether it is on SUPER, and whether the project can access regulatory stability, which with a favorable RCA is a meaningful advantage against future changes. Personal data protection — toward December 1, 2026 (published, pending effect) The new personal data protection Law No. 21,719 is already published, but its effective date is deferred and it applies from December 1, 2026. Its full treatment is in the report’s personal data protection chapter. What matters is that the remaining time is an adaptation period, not a lull. The law creates the Personal Data Protection Agency, raises lawfulness and security standards, expands data subject rights and introduces a sanctions regime with fines and corrective measures graded by severity.
OGC view
Treat December 1, 2026 as a project deadline. A data mapping exercise and an adaptation plan take months, and arriving without a reasonable program exposes the company to the new regime’s sanctions. REFORMS IN FORCE C LO S I N G · 2 0 2 6 R E G U L ATO R Y D E V E LO P M E N T S Cybersecurity, pensions and other developments Cybersecurity and critical infrastructure (in force, technical development) Law No. 21,663, the Framework Law on Cybersecurity and Critical Information Infrastructure, is already in force and its institutions are operational. The National Cybersecurity Agency was staffed under 2024 and 2025 rules and during 2026 entered the phase of issuing technical regulation. Through a resolution published on May 30, 2026, it opened public consultation on the regulation setting mandatory baseline standards. The law imposes on public and private institutions within its scope, including vital operators, duties of risk management, adoption of standards, and incident reporting to the National CSIRT, all given concrete form through the regulations now being rolled out. A company operating sensitive services, networks, platforms or relevant infrastructure should check whether it qualifies as an obligated entity and follow the Agency’s technical regulation. Getting ahead of the standards before they become mandatory reduces exposure to incidents and sanctions. Pension reform (in force, gradual) The pension reform Law No. 21,735 was published in 2025 and its implementation is gradual. The additional employer contribution began applying from August 2025 payrolls and will keep rising progressively to its full rate. Its treatment is in the labor chapter. This contribution is a gradual increase in labor cost that should be built into personnel expense projections for coming years, alongside the working-hours reduction and minimum-wage adjustments. REFORMS IN FORCE C LO S I N G · 2 0 2 6 R E G U L ATO R Y D E V E LO P M E N T S Other labor and sectoral developments Working-hours reduction to 42 hours (in force). On April 26, 2026, the second milestone of Law No. 21,561 took effect, lowering the weekly maximum from 44 to 42 hours with no pay cut, on the path toward 40 hours. Minimum wage (in force). From January 1, 2026, the monthly minimum wage stood at CLP 539,000 for workers aged 18 to 65 under Law No. 21,751, and a subsequent statutory adjustment raised it to CLP 553,553 from May 1, 2026. Check it again when setting salary bands, since it may be subject to future adjustments. Desalination (published, deferred effect). Law No. 21,813 on the use of seawater for desalination was published on May 12, 2026 and has deferred effect, making it a framework to anticipate for water-intensive projects. Its treatment is in the water rights chapter. Employment incentives (in Congress). The National Reconstruction Bill contemplates a formal-employment tax credit. Until passed, it should be treated as a legislative proposal, not an incentive in force. HOW TO GET AHEAD C LO S I N G · 2 0 2 6 R E G U L ATO R Y D E V E LO P M E N T S 2026’s defining feature is not any single rule, but the speed and simultaneity of change. Some reforms in force are being implemented in stages, some regulations only now define the real content of already-published laws, and some far-reaching bills have an uncertain path to passage. The most common mistake is treating a bill as law, or a framework law as if it already operated fully; the opposite mistake — ignoring what is brewing — leaves the company with no reaction time once the rule finally takes effect. The practical rule is to always separate what is in force from what is pending, model the impact of each scenario, and prepare adaptation plans ahead of the deadlines. Beyond the matters in this section, 2026’s legislative volume spans public safety, State intelligence, territorial planning, education and energy. The useful approach is not to track every law, but to identify which ones touch your business line, your contracts or your cost structure, and to check their status and effective date before acting.
This chapter is informational and does not constitute legal advice for any particular case. A substantial part of its content refers to bills still in Congress, which are not law in force and may be amended or fail to pass. The already-published rules mentioned here are, in several cases, subject to a vacancy period, regulations or gradual implementation. Figures, rates, deadlines and legislative status should be verified against the official source in force at the time of acting. For any specific decision, consult a lawyer to assess your particular situation.
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