by Rod Hughes

It’s official: By a 29 to 14 vote, the Legislative Assembly yesterday passed a bill to open up the insurance market which had been a monopoly of the National Insurance Institute (INS) since its creation in 1924. The bill is one of the original 13 pieces of legislation needed to bring Costa Rican law into accord with the Central American Free Trade Agreement (CAFTA).

Of the CAFTA implementation bills, this one and another to break ICE’s telecommunications monopoly had been the most hotly contested. Some bills have been passed, a couple were rejected by the Supreme Court’s Constitutional Chamber (Sala IV) for changes to articles, but slowly they are being cleared from the pipeline.

The new law sets up an insurance regulatory agency. National Liberation party deputy Maureen Ballastero told the morning paper La Nacion, “I’m totally satisfied. It’s an excellent bill. It creates an open market but very regulated, secure for customers, in accord with CAFTA and tries to preserve the principles of INS.”

One worry had been about the fate of the Fire Department (Bomberos), a branch of INS for 84 years. Now, the firemen will have more say in their affairs and will be financed by 4% of insurance premiums sold in the country.

Current INS CEO Guillermo Constenla had been lobbying the lawmakers hard for extra perks for his agency. INS still retains the sole source from which the government can buy insurance.

Chief opposition to the bill has been the Citizen Action Party (PAC) and leftist deputy Jose Merino, although no doubt existed that the President and his party had enough votes for passage. (PAC vigorously opposed passage of CAFTA in a nationwide referendum last October.) Final vote is scheduled for next Tuesday when 38 votes are needed for final passage. To accomplish this, all legislators from National Liberation, Social Christian Unity and the Libertaian parties will have to be mustered to overcome the opposition.