INSURANCE COMPANIES

Types of insurance and branches subject to them

The Consorcio, forming part of the Ministry of Economy and Competitiveness, is a public entity inspired on the principle of compensation whose aim is to cover the insurance risks that its legal statutes determine.

For financing this body the law lays down the following surcharges:

Surcharge on the Extraordinary Risks Insurance, personal damage (life and accidents), property (direct material damage)and loss of profits.

Through the resolution of 27th November 2006 (State Gazette. nº 292, of 7th December2006), the Directorate General of Insurance and Pension Funds (Amended by Resolution dated november 12, 2008; BOE nº 280 dated november 20), approved the current tariff.

Surcharge in the insurance of compulsory motor liability derived from the use and circulation of motor vehicles.

The surcharge rate is fixed two percent (2%)of the commercial premium (DGSFP Resolution dated of 19th May 2009).

Surcharge used to finance the activity of liquidating insurance companies.

All insurance contracts that are formalised on risks located in Spain, other than life Insurance and export credit insurance on behalf of or with the support of the State are subject to said surcharge. Not subject to any surchage will be savings plan insurances, wichever of the 11 contingencies are covered, or policies that implement pension commitments. The rate of this surcharge is 1,5 per 1000 of the commercial premium before mentioned. (Law 6/2009 dated 3rd. July, which amends the Consorcio’s Legal Statute)

Surcharge on Obligatory Hunter's Liability cover.

The Consorcio's surcharge and the functions regarding this insurance have been suppressed by Law 6/2009 dated 3rd July, which amends the Consorcio's Legal Statute

Surcharge on Obligatory Passenger's Liability cover.

The Consorcio's surcharge and the functions regarding this insurance have been suppressed by Law 6/2009 dated 3rd July, which amends the Consorcio's Legal Statute.

This surcharge, as a modality of private individual accident cover, is still included in the regime and regulations with respect to the extraordinary risks cover, with the tariff included in the previously mentioned Resolution dated 27th November 2006 applying. (the Resolution was amended by Resolution dated 12th November 2008) This tariff has been established as five percent (5%) of the commercial premium.

These surcharges, which correspond to the Consorcio in its functions as liquidator of insurance companies, compensation and guarantee fund have the nature of income of public right that can be demanded through the administrative route of embargo when they have not been paid in by the insurance companies within the fixed period and for the purpose of executive title the certification of default issued by the Directorate General of Insurance and Pension Funds at the Consorcio's instigation, will suffice.

Consequently from the time any insurance company starts to operate in Spain it will be obliged to collect the surcharge and pay them to the Consorcio.

Below we show the obligatory surcharges and the forms which should be used to make declarations to the Consorcio for those branches of cover defined in Art. 6 of the L.O.S.S.P., Royal Decree Law. 6/2004.