Collection of surcharges. Fractions or instalments

Collection

All the surcharges in favour of The Consorcio de Compensación de Seguros (hereinafter the Consorcio) will be compulsorily collected by the insurance companies together with their premiums. The surcharges will be later paid to the Consorcio according to the date on which they were collected, according to the periods laid down for each surcharge and the model / form.

The surcharges are income of public right which determines in favour of the Consorcio a series of prerogatives aimed at facilitating their collection and that are justified by the public interest of the functions that said surcharges finance.

The Directorate General of Insurance and Pension Funds, through the insurance inspectorate and in accordance with the inspection plans approved at the Consorcio`s initiative will inspect insurance companies that collect surcharges in favour of the Consorcio with the objective of verifying effective compliance with this obligation.

Fractioning / instalments of the surcharges.

The insurance companies can choose to collect premium in instalments from the Policyholder and within this alternative, in turn, collect the Consorcio surcharges in instalments.

In the event of the insurance company choosing to charge the premium in instalments to the Policyholder but collecting the Consorcio surcharge all at one time, insurance companies will be obliged to pay into the Consorcio the totality of the surcharge with the collection of the first instalment premium.

In the event of the company choosing to collect the premium in instalments and also collect the compulsory surcharges b instalments according to the frequency shown below the surcharge can be paid to the Consorcio the partial payments of surcharges as and when these are collected with the premium instalments. The choice of this option, contrary to the preceding one, will generate financial interest in favour of the Consorcio.

The current rates of interest for instalments are:

  • Premium payable every six months 2 percent.
  • Premium payable quarterly 2.5 percent.
  • Premium payable every two months 3 percent.
  • Premium payable monthly 3.5 percent.

For the purposes of applying and calculating financial interest it is understood that instalments exist when periodic premiums are collected of lower amounts than that corresponding to the complete risk for the contracted period of cover, established in the policy.

The current rates are established on the basis of annual calculations, in such a way that those insurances that are contracted with a shorter interval, they will have to be referred to the proportional part of the year that they represent.

With respect to those covers that have instalment arrangements that differ from those mentioned in Art. 18.3 of the Consorcio's Legal Statutes, the instalment payment basis that most closely resembles the arrangement will be used as a basis for calculations (Resolution of the Consorcio's Presidency dated October 9, 2009).

In order to subscribe to the instalments method the insurance company must comply with the requirements listed in article 18 of the Consorcio`s legal statute in connection with prior communication to the Consorcio, express mention of the circumstanced in its technical basis and apply it systematically in the branch or risk from that time onwards.