Spain Insurance Industry – Governance, Risk and Compliance

Spain Insurance Industry Regulation Overview

Directorate General of Insurance and Pension Funds (DGSFP) regulates the Spain insurance industry along with other regulators and supervisors, including the International Association of Insurance Supervisors (IAIS), the European Insurance and Occupational Pensions Authority (EIOPA), and the Federation of European Risk Management Associations (FERMA).

The Spain insurance industry governance regulation research report provides a detailed analysis of the regulations for several insurance types including life, property, motor, and liability. The report also gives insights into recent and upcoming changes in non-admitted insurance regulations, taxation, and the legal system. Also, leverage our elaborate procedural review of new company registrations and operations based on key parameters such as license, FDI, minimum capital requirements, and solvency to better understand market avenues.

Spain Insurance Industry – Key Regulators and Legislation

Directorate General of Insurance and Pension Funds (DGSFP): The DGSFP is an independent body solely responsible for the regulation of private insurance, working under the MEC. It is responsible for ensuring compliance with legislation and if necessary, it can impose sanctions on insurers that fail to meet their regulatory obligations. It conducts training programs for intermediaries, brokers, reinsurance, and other persons directly involved in mediating private insurance and reinsurance.

International Association of Insurance Supervisors (IAIS): The IAIS is a membership-driven global organization representing insurance regulators and supervisors. It formulates and issues various global insurance principles, standards, and guidance, provides training and support on issues related to insurance supervision and organizes meetings and seminars for insurance supervisors. The IAIS works closely with other financial sector standard-setting bodies and international organizations to promote financial stability.

A few of the laws regulating the Spain insurance industry are:

• Law on Private Insurance and Reinsurance Mediation (LMSP)
• Law 50/1980 on Insurance Contracts (LCS)
• Royal Legislative Decree 8/2004 for Motor Third-Party Liability Insurance
• Law of Maritime Navigation
• Regulation 785/2004 for Air Carriers and Aircraft Operators’ Insurance

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Spain Insurance Industry - Compulsory Insurance

A few of the compulsory insurances required within the Spain insurance industry are:

• Motor Third-Party Liability Insurance
• Aviation Liability Insurance
• Marine Liability Insurance
• Professional Indemnity Insurance
• Social Security Insurance

Compulsory Insurances in Spain

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Spain Insurance Industry - Company Registration and Operation

A license is required to operate in the Spain insurance industry. Significantly, to advertise and sell insurance products in the country, insurers and reinsurers need to be authorized by the DGSFP. Insurers are only allowed to operate within those classes for which they have been granted a license. Companies are allowed to operate insurance activities within a single class or group of specific classes. LOSSEAR states the types of insurance licenses provided by the DGSFP following the law.

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Spain Insurance Industry – Taxation

Tax is imposed upon insurance premiums within the insurance industry in Spain. The other taxes imposed are corporate income tax, corporate capital gains tax, and value added tax.

Corporate Income Tax: In Spain, any company that is incorporated according to Spanish Law for tax purposes, has a registered office in the country, or has its effective management, which is considered a resident company. Resident companies are taxed on their worldwide income, whereas non-resident companies are taxed only on their income sourced from Spain. In addition, branches of foreign companies are subject to similar taxation as the subsidiaries.

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Scope

• The report covers details of the insurance regulatory framework in Spain.
• The report contains details of the rules and regulations governing insurance products and insurance entities.
• The report lists and analyzes key trends and developments pertaining to the country’s insurance regulatory framework.
• The report analyzes the rules and regulations pertaining to the establishment and operation of insurance businesses in the country.
• The report provides details of taxation imposed on insurance products and insurance companies.

Key Highlights

• The Directorate General of Insurance and Pension Funds regulates the Spanish insurance industry.
• The law prohibits non-admitted insurance. However, insurers from EEA/EU Member States and reinsurers are permitted to operate without obtaining a license in Spain.
• Composite insurance is not permitted in Spain. However, life insurance companies can underwrite health and accident insurance.
• Foreign direct investment is permitted in the Spanish insurance industry up to 100%.
• Solvency II was implemented from January 1, 2016.

Reasons to Buy

• Get FAQ-style analytical insights comprising 129 knowledge elements on insurance compliance applicable to the country.
• Gain insights into the insurance regulatory framework in Spain.
• Track the latest regulatory changes and expected changes impacting the Spain insurance industry.
• Gain detailed information about the key regulations governing the establishment and operation of insurance entities in the country.
• Understand key regulations and market practices pertaining to various types of insurance products.