A package of amendment to various federal laws, including the Law for the Protection and Defence of Users of Financial Services, came into effect in February 2012, allowing for the filing of class actions against insurance companies. The amendments are part of a broader legislative reform that affects not only financial services legislation, but also consumer rights, antitrust and environmental law. Several procedural changes have also been implemented.

The amendments provide that class actions against insurers may be filed by:

  • the National Commission for the Protection and Defence of Users of Financial Services;
  • the Federal Competition Commission;
  • a common representative of a class consisting of at least 30 members;
  • a consumer association;(1) or
  • the attorney general.

The Federal Code of Civil Procedure identifies three types of class action:

  • An acción difusa is an indivisible action that is filed to protect the rights of an undetermined group. It aims to restore the prior state of affairs or, as the case may be, to ensure compliance with an alternative obligation. There is no need to demonstrate a prior legal relationship between the claimants and the defendant.
  • A collective class action (in the strict sense of the term) is an indivisible claim that is filed to protect the rights and interests of a determined (or determinable) group, based on common circumstances. The purpose of such a claim is to seek reparation for damage by requiring that a party perform (or refrain from performing) specific actions, and to recover damages caused to each member of the group. This type of claim assumes the existence of a legal relationship between the defendant and each member of the class.
  • A homogeneous individual action is a divisible claim which is filed to protect individual rights or interests, but which has a collective impact. The claimants are individuals who constitute a group on the basis of common circumstances and who seek to enforce compliance with the terms of an agreement or to rescind it (along with other applicable consequences).

The remedies available depend on the type of action. Among other things, they provide for the reparation of damages caused to individuals or members of a specific group. Preventive measures (including injunctions) may be used to compel defendants to desist from actions that are allegedly causing irreparable damage or to withdraw products from the market.

Although various factual circumstances may be relevant to a class action, insurers are most likely to face homogeneous class actions. Companies engaged in life insurance, medical expenses insurance or health insurance business are most vulnerable to such actions, given that most of their insureds are individuals. For instance, if an insurer is found to be consistently charging excess premiums for a particular form of coverage, all of the insureds affected may have grounds to constitute a homogeneous action. Insurers will also be particularly exposed in the case of life insurance products with savings components, when the insurer fails to invest savings properly or maintain the guaranteed return on a particular savings product. Health insurance entities may face a greater risk of being sued in respect of services supplied by their appointed service providers.

These amendments will materially affect the conduct of insurers in relation to their clients, not only in their promotion, sale and adjustment of insurance, but also in the assessment of coverage policies, as exposure will be increased significantly.

In order to assess and avoid the risks associated with class actions, insurers will need to improve their recordkeeping with respect to insureds, coverage and services provided. It is advisable to implement additional precautions and internal compliance reviews to detect and rectify any circumstances that may give raise to class actions.

For further information on this topic please contact Carlos Ramos Miranda at Barrera, Siqueiros y Torres Landa SC by telephone (+52 55 5091 0000), fax (+52 55 5091 0123) or email ([email protected]).


(1) Such associations must be civil associations that do not pursue economic activities and were formed at least one year before filing the action.