Contracts under the regime of right of establishment or under the regime of free provision of services

The insurance contract formalised under the regime of right of establishment or under the regime of free provision of services that may cover risks located in Spain or assume undertakings in Spain will be subject to the surcharges in favour of the Consorcio de Compensación de Seguros (Hereinafter the `Consorcio') to cover the needs of said body in the exercise of its functions of compensation of losses of extraordinary events occurring in Spain, of the guarantee fund in the insurance of liability derived from the use and circulation motor vehicles and as liquidator of insurance companies, as well as the other surcharges and tributes that can legally be demanded in the same conditions as the contracts subscribed with Spanish insurance companies (See article 82 of the law governing supervision of the private insurance sector, collated text approved by Royal Legislative Decree 6/2004, of 29th October).

From the moment of initiating their activity in Spain, insurance entities have the obligation to collect the surcharges and to pass them on to the Consorcio and, through the national organism that controls insurance activities in the country, the Dirección General de Seguros y Fondos de Pensiones, they will receive formal authorisations for registration and control.

For this reason it is appropriate that contact be established with the Consorcio before the activity starts so as to prevent any delays and unnecessary stoppages where the surcharges are concerned.

In all events whether the formal starting of the activity also entails formalising insurance contracts in the terms established in the first paragraph or not it is still necessary for a declaration of the activity to the made to the Consorcio.

The insurance company's representative.

The norms have progressively defined more clearly the need of the existence of the figure of representative of the insurance companies and its compulsory nature so as to perform different tasks and these aspects mean that the representative can be not just one person.

• Representative for the purposes of declaring and paying the compulsory surcharges:

   

  The procedure for collecting surcharges laid down by the Consorcio determines the need to appoint a representative for the purposes of being responsible for:
  
  • The formal process for declaring and paying regarding the contents of the data declared and settlement of the amounts in the way and within the period.
  • Documentary support of the contents of the declarations made.
  • Communications and updating of the contacts data.
  
  In this regard it is an essential condition for proceeding to comply with the obligation to collect and pay the surcharges to the Consorcio having designated and communicated to the Consorcio the name of the person who will act as the representative, on the part of the insurance company, before the settlement process can take place. The minimum essential data are described in the resolution of 9th October 2009 from the Consorcio de Compensación de Seguros.
  
  Likewise, the legislation for this purpose and specifically from the taxation point of view determines that: The insurance companies domiciled in another member State of the European Economic Space that aspire to operate in Spain under the regime of free provision of services will be obliged to designate a representative with a fiscal residence in Spain for the purpose of the tributary obligations referred to in the law governing the order and supervision of the private insurance sector.

   

• Representative for the purposes of settling and handling claims derived from the use and circulation of motor vehicles.

The insurance companies domiciled in another member State of the European Economic Space that aspire to operate in Spain under the regime of free provision of services in the insurance of liability derived from the use of terrestrial motor vehicles, excluding carrier's liability, must name a representative, with fiscal residence in Spain or a legal entity that is established in Spain.

System access codes

The codes for accessing the system will be sent by the Consorcio to the representatives of the insurance entities.

It is a condition prior to receiving the codes that the representatives should be inscribed in the Consorcio's register of representatives, which is held by the Consorcio, Sub-directorate of Collections, Accounts and Budgets

The Consorcio will hand over three codes to each entity and representative:

• Insurance entity
• User
• Password