Presentation, background and regulatory framework

Within the scope of motor liability insurance, and as an insurer, the Consorcio assumes the mandatory motor cover not accepted by insurance entities, as well as the cover for vehicles belonging to the State, the Autonomous Regions, Local Corporations and Public Organisms that should so request it. With respect to all of the abovementioned vehicles, the Law offers the Consorcio the possibility of accepting cover that is over and above that which is mandatory. And as regards subsidiary cover, the Consorcio will indemnify damages in the event of losses caused by unknown vehicles, those that are uninsured and those that have been stolen; or in cases where the insurance entity has been declared bankrupt, in administration, insolvent, is in a process of liquidation in which the Public Administration intervenes, or when the company has been taken over by the Consorcio itself. In certain cases it will also refund indemnities paid to affected parties that are resident in other Member States of the European Economic Area by their respective indemnification organisms.

Furthermore, the Consorcio is entrusted with the management of the Informative Record of Insured Vehicles (Fichero Informativo de Vehículos Asegurados - FIVA), apart from acting as an informative organism in the event of claims occurring in a State other than that of the residence State of the affected party.

Background

Law 122/1962, dated 24th December and relating to the Use and Traffic of Motorised Vehicles determined the creation in Spain of Mandatory Motor Insurance, with the aim of satisfying a social need that was highly felt at that time: the need to protect victims of traffic events, ensuring them that they would receive medical assistance and an indemnity that, up to the established limit, would be for the account of the company insuring the vehicle that caused the occurrence. Precisely, by making the insurance cover mandatory, the aim was that all those responsible for causing a traffic accident would, through their insurance, be able to face their obligation to repair the damage so caused.

In order to counter incidents and circumstances that left compliance with said obligations in a precarious situation (unknown responsible vehicle, or an uninsured or stolen vehicle, etc.), an instrument was devised that, in addition, had the aim of providing succour to the victims of such events. At first this instrument was the National Fund to Cover Traffic Risks (Fondo Nacional de Garantía de Riesgos de la Circulación), created by the very same Law 122/1962, which was absorbed on 1st January 1982 by the Consorcio de Compensación de Seguros by virtue of Royal Decree 2878/1981 dated 13th November.

The objective of protecting the victims of accidents occurring in the European Economic Area has made this type of cover evolve, following the corresponding Community Directives.

Regulatory framework

Within the context of Motor Insurance, the Consorcio de Compensacíón de Seguros' functions are defined by:

  • The LEGAL STATUTE Pdf file. Open in a new window (was approved by Law 21/1990 dated 19th December which, following subsequent modifications, is included in the redrafted text approved by Legislative Royal Decree 7/2004 dated 29th October, with modifications introduced by Law 12/2006 dated 16th May as well as by Law 6/2009 dated 3rd July).
  • The LAW Pdf file. Open in a new window relating to civil liability and insurance for motorised vehicle traffic (redrafted text approved by Legislative Royal Decree 8/2004, dated 29th October and modified by Law 21/2007 dated 11th July).
  • The REGULATION Pdf file. Open in a new window of mandatory third party liability for motorised vehicle traffic, approved by Royal Decree1507/2008, dated 12th September.