Spain Insurance Information

CIA link to demographic/economic data on Spain

General Spain Insurance Information

• Compulsory Insurance:
  
  1. Third Party Automobile Liability;
  2. Workers’ Compensation (part of Social Security Scheme);
  3. Hunter’s Liability;
  4. Nuclear Liability;
  5. Insurance Brokers’ Professional Liability / Indemnity;
  6. Personal Accident - Public Transport;
  7. Consorcio de Compensacion de Seguros (see ‘Property’ section below).
• Non-Admitted Insurance:
  Permitted under the terms of the EU’s Freedom of Services Directive; otherwise, non-admitted insurance is generally prohibited.
• Policy Wordings & Rates / Tariffs Controlled:
  All wordings and tariff rating must in theory have been approved by the Insurance Authorities. The ‘Consorcio’ rates for catastrophic risks are mandatory. All other rates are used as guidelines.
• Policy Language:
  Spanish
• Types of Insurance Restricted to Government Institutions:
  “Consorcio’; Workers’ Compensation; Export Credit.
• Policy Currency:
  euro (EUR)
  note: on 1 January 1999, the European Monetary Union introduced the euro as a common currency to be used by the financial institutions of member countries; on 1 January 2002, the euro became the sole currency for everyday transactions with the member countries. As from 1995, risks located in Spain can be insured in most currencies.
• Currency Restrictions / Exchange Controls:
  None known.
• Policy Period:
  Annual. Longer terms policies are available for certain classes but Long Term Agreements (LTAs) are not.
• Cancellation Provisions:
  60 day written notice prior to expiration; otherwise tacit renewal provisions prevail.
• Premium Taxes, etc. paid by Insured: (see update at the bottom on this page)
  As from Jan 1, 1997, 4%
  0.5% premium tax - all lines;
  5% fire brigade charge - fire policies only;
  ‘Recargos Externos’ (administrative charge - negotiable) - up to 10% for industrial risks.
  
• Insurance Companies:
  Both local and foreign Insurers operate. The local Insurers often are substantially owned by Spanish banks.
• Brokers:
  Agents and Brokers are common in the Spanish Market.
• Brokerage Commissions:
  Most industrial / commercial lines pay 15% on average. Commissions cannot be paid to foreign brokers not registered with the ‘Direccion General de Seguros’.
• Broker of Record Letters:
  A recognized practice for industrial / commercial risks when either a broker or insurer is being replaced.
• Reinsurance:
  No restrictions known.
• Local Natural Hazards:
  None known.
• Other Information:
  

Property Insurance

The ‘Consorcio de Compensacion de Seguros’ is a compulsory Government catastrophic risk insurance applying to: Fire, Boiler & Machinery / Engineering, Goods in Transit, Personal Accident, Homeowners, Burglary and Employers’ Liability. Insured perils include: earthquake, flood, storm / tempest, burst water pipe, strike, riot / civil commotion, volcanic eruption, windstorm / hurricane, landslide. Note: This Government scheme covers direct physical damage. Any resulting Business Interruption losses would be covered under the commercial insurance policies.

• Fire:
  Standard fire perils include - fire, lightning, explosion. Aircraft, earthquake, flood, storm / tempest, burst water pipe, riot / civil commotion, windstorm / hurricane, vehicle impact, weight of snow / avalanche are available for an additional premium charge.
• All Risk:
  Available.
• Coinsurance:
  100%. Agreed Amount endorsement possible.
• Blanket Insurance:
  Can be written under special circumstances.
• Business Interruption:
  UK Loss of Profits form most widely used.
• Replacement Cost:
  Available.
• Discount for fire protection equipment / systems: Available up to maximum discount of approximately 60%.

Boiler & Machinery / Machinery Breakdown / Engineering

• Wordings:
  Generally follow UK forms but U.S. forms can be written. Full comprehensive coverage available including Business Interruption and Machinery Breakdown. Boiler Explosion can be insured under the Fire (Property) policy. Periodic inspections by Government (or other approved) inspectors are required.

General / Public Liability

• Available Wordings:
  Comprehensive General Liability (US-styled) and Public Liability forms can be used. Coverage extensions include, Product Liability, Employer’s Liability, Tenant’s and Neighbor’s Liability, etc.
• Comments:
  Coverage can be written on an occurrence basis.

Automobile / Motor

• Compulsory Limits:
  Bodily Injury: Euro 70 million per person. Property Damage: Euro 15 million per accident.
• Comments:
  It is recommended that unlimited coverage be purchased for each vehicle as the rates are not that much more and the market is competitive (each Insurer develops own rating). In addition, the policies can be endorsed to provide coverages for Towing and Criminal Defense Costs. Automobile policy coverages usually apply to the Insured and any licensed individual driving with the Insured’s permission. Passengers are considered Third Parties.

Workers’ Compensation

• Comments:
  This insurance is provided by the Government Social Security Scheme and covers all employees. Extra-Territorial benefits, Medical Expenses, and Occupational Diseases are covered under the Scheme. Employer’s Liability can be insured under the General / Public Liability Policy.

Marine

• Available Wordings:
  The Institute of London Underwriters clauses are best known and most common in the market. War and Strike rates follow London scale. Local forms have been adapted.

Crime

• Available Coverages:
  Theft, Burglary, Robbery, Fidelity (not all Insurers will write this coverage), Bankers Blanket Bonds.

Comment & Updates

July 17, 2009 - The Fondo del Consorcio de Compensacion de Seguros para la liquidacion is to be cut from 0.3% to 0.15%.  Also, the Fondo Nacional de Garantia on hunting and compulsory travel insurance are to be abolished.