The Chile Financial Market Commission issued two regulations under the new Law on Housing Co-ownership, setting out rules for contracting, renewing and cancelling fire insurance for condominiums and updating requirements for mortgage insurance tenders. The measures are designed to reduce duplicate insurance payments and allow condominium-level coverage to be used to meet lenders’ insurance requirements. General Rule No. 556 allows co-owners to present to loan-granting entities an insurance arrangement that combines a policy covering common property and facilities with a separate policy for individual units, and it also permits submission of the condominium’s insurance policy where its coverage is at least equivalent to that of the insurance tendered by the lender. General Rule No. 557 amends mortgage insurance tenders in line with the law’s approach, including permitting mortgage insurance to be submitted by condominium co-owners in place of insurance for individual units. The framework also reflects a legal provision requiring compensation for partial damage to an insured unit under a mortgage-linked policy to be applied first to repair the property rather than to repay the unit’s outstanding mortgage balance.

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