The Costa Rican Insurance Institutes’s future will be soon determined by the Sala IV.

Under the recently ratified Central America Free Trade Agreement, Costa Rica’s law making body must enact a series of laws to put them in accordance with the other treaty nations. Some of these individual laws will force previously-monopolized sectors (i.e. ICE’s former telecom monopoly) to open up to private national and international companies, causing quite a stir among the employees and advocates of these state-run institutions.

As CAFTA becomes law, the country’s insurance monopoly, the National Insurance Institute (INS), will also be broken. Like the new law to ensure ICE’s continued competitive potential, a similar law has been created to allow the INS to remain flexible and competitive in the new market.

However, the Costa Rican Comptroller said it objects to article 47 of the INS’s new policy, which shortens the amount of time necessary to carry out various company tasks and purchases, a change made to allow INS to be more efficient and remain competitive. According to CGR, while reducing wait times may be more efficient for INS, a huge reworking of government policies would be necessary. In a country infamous for its love of bureaucracy, such a change in public policy would be very expensive and time-consuming, and CGR said it cannot approve it.

In addition, CGR has asked the Sala IV to rule on whether or not INS can sell insurance outside of Costa Rica. Though CAFTA would seemingly allow such a change, Costa Rica’s Constitution must come first, and there is no greater authority on Constitutional law than the Sala Constitucional.

The decision over CAFTA, as many remember, created a wide rift between the country’s two largest political parties, PLN and PAC. And though CAFTA’s ratification was approved, many PAC leaders and activists have tried to slow the process down, watching every detail closely. For this reason, instead of attending to INS-related concerns one-by-one, the Sala IV has decided to wait until all complaints and issues are on the table before taking action.

It might be hard to imagine what a post-TLC (Free Trade Agreement in Spanish) Costa Rica will look like, though the hope is that Ticos and Costa Rica residents have only good surprises in store for them. As the insurance market opens, new options will be available - instead of having to insure your life’s belongings (and your life) with INS, you will be free to comparison shop, price compare, and determine which individual policies are best for you. As new companies arrive, expect to see more competitive services, better policies, and still-low prices, thanks to government regulation.

CAFTA was a contentious decision, and many Costa Ricans are still unsure of its benefits. However, as each new policy gets passed and the kinks are worked out, many hope that Costa Rica’s open market will be one of fair prices and good service.

Mentioned Governmental Agencies/Organizations

• La Contraloría General de la República: The Office of the Comptroller for the Republic [of Costa Rica], abbreviated to CGR. Regulates government funds.
• Instituto Nacional de Seguros de Costa Rica: The National Insurance Agency, abbreviated to INS. In charge of fire, car, home, life, and many other insurances. Not in charge of health insurance, which is controlled by “La Caja”).
• Sala IV: Pronounced “La Sala Cuarta,” and often called the “Sala Constitucional” this is the section of the Costa Rican Supreme Court that deals with the constitutionality of laws and actions.