By judgment SL3101-2024 of November 19, 2024, the Labor Chamber of the Supreme Court of Justice (hereinafter, the “SCJ”) ruled on the cassation appeals filed by a pension fund administrator (hereinafter, the “PFA”) and an insurance company.
 

In the field of insurance law, the dispute revolved around determining whether the insurance company was obligated to cover the shortfall owed to the PFA to ensure the payment of a survivor’s pension under a pension insurance policy contracted by the PFA. Furthermore, it was debated whether the insurance company had standing to challenge the claimant's right to the pension.
 

The insurance company argued that the claimant had not sufficiently proven their economic dependence on the deceased affiliate, which is an essential requirement to access this benefit. Consequently, it maintained that there was no legal basis for recognizing the right or for paying the pension.
 

However, the SCJ rejected these arguments and confirmed the insurer’s obligation to cover the corresponding shortfall under the pension insurance policy. Among the main considerations of the SCJ, the following stand out:

1. Obligation of the insurer under Article 77 of Law 100 of 1993:
   
   The SCJ emphasized that the sole obligation of the insurer, as set forth in Article 77 of Law 100 of 1993, is to cover the shortfall in the savings account required to fund the survivor’s pension. Additionally, the insurer lacks standing to challenge the recognition of the right to said pension:
   
   "From the content of Article 77 of Law 100 of 1993 and the jurisprudential precedents described throughout the decision, it follows that the insurer’s responsibility is simply and solely to cover the shortfall necessary to complete the capital required to grant the requested survivor’s pension. This is because such coverage is the purpose of the insurance policy. Furthermore, the coverage of pension insurance in the social security system is automatic. Therefore, the company has a duty to analyze the new pension conditions, in light of the adjustment ordered, to determine whether an additional amount to the sum already paid at the time is required to fully meet the stipend with the established modifications."
    
2. Recognition of the pension by the PFA:
   
   In this specific case, the SCJ noted that the PFA had already recognized the right to the survivor’s pension, which automatically triggered the insurer’s coverage and its obligation to cover the shortfall required to fund the pension, in accordance with the terms and conditions of the insurance policy:
   
   "In the case under review, the 'triggering event' referred to in the cited ruling occurred because the entity responsible for paying the benefit accepted the obligation imposed by the judicial decision, which activated the automatic coverage of the guarantor. That is, the additional amount required to fund the pension, within the framework and terms of the collective policy arising from the pension insurance contract in force at the time of the event."
    
3. Disputes between the insurer and the PFA:
   
   Finally, the SCJ reiterated the legal precedent established in judgment SCJ SL6094-2015, which states that disputes between the insurer and the PFA constitute a separate controversy and should not affect the affiliates or contributors to the social security system:
   
   "[...] Once the pension administrator is ordered to recognize the periodic benefit, the insurer's obligation to cover the additional amount arises by operation of law (Article 77 of Law 100 of 1993). If any discrepancy arises between the pension fund administrator and the insurer in such cases, as it does not constitute a necessary joinder, it may be subject to a separate dispute between them. However, this should not affect the affiliates or their beneficiaries under the terms of the social security statute, which includes the financing of the judicially recognized right, especially as this pertains to a fundamental and inalienable guarantee with constitutional protection under Article 48 of the Constitution."
    

If you wish to consult judgment SL3101-2024 of November 19, 2024, click here.