740.25112A/7–344: Telegram

The Ambassador in Chile (Bowers) to the Secretary of State

1153. The questions asked in Department’s telegram July 118 regarding insurance pool are answered as follows:

1.
Pool is to be made up of all national companies operating in Chile. No foreign companies will be involved. The national companies are divided into two categories: Companies controlled by Chilean capital and those controlled by foreign capital. The latter are generally referred to by the British as “affiliates”. See pages 35 despatch 7540 of September 13, 1943.19 Original plan was to allow all national companies to issue policies on a pro rata basis to listed nationals, following applications made by listed concerns to the control pool. Since the Department’s discussions with British, latter have indicated to their Embassy in Santiago the inadvisibility of permitting British “affiliate” companies to write direct insurance for listed nationals, and British Embassy has accordingly secured a modification of the pool idea. According to present plans, the Chilean controlled national companies only will write direct insurance for all listed persons and firms and assign it to the pool which will in turn redistribute such insurance among all national companies, including “affiliates”. Thus foreign controlled national companies, mostly British, will not issue policies directly to listed nationals, but they will participate as reinsurers.
2.
As above stated, foreign companies organized abroad will not participate in the pool. Also the pool could operate without the participation of British and American “affiliates”. Since British have heavy interest in “affiliates” they believe it inadvisable to advocate exclusion of British “affiliates” from pool on ground that they are in fact British companies as this would invite attention of Chilean Government to British control. From long range standpoint they feel this would be an invitation to completely nationalize such companies. Only two national companies, Italo Chilena and Condor, are American affiliates.
3.
Embassy feels it could probably exercise reasonable control over operations of pool if British and American affiliates did not participate in pool. However, with their participation it is believed more effective control would be assured.

Embassy also believes that commitment referred to in paragraph 3 of Department’s telegram of June 1220 can eventually be obtained, [Page 773] but this may entail revision of usual policy forms after consultation with companies.

British Embassy has been consulted and agrees with opinions herein expressed. Chilean Government has not been consulted.

As pertinent to above, I have unofficial information decree 345 enclosed in my despatch 10017 of June 1621 has been approved by Controller General, following a discussion I had with Minister of Foreign Affairs about controls program on June 24. This has not been officially confirmed and Controls Commission has not yet met with my representatives.

Bowers
  1. No. 769, supra.
  2. Not printed.
  3. Telegram 680, p. 767.
  4. Not printed.