Brief comments about the new Spanish Organisation, Supervision and Financial Solvency of Insurance and Reinsurance Companies Law 20/2015

by Bernardo Ruiz Lima and Juan Jose Bernardo

On 15 July 2015 the Spanish Official Gazette published a new legislation on Organisation, Supervision and Financial Solvency of Insurance and Reinsurance Companies Law 20/2015 (Ley de ordenación, supervisión y solvencia de las entidades aseguradoras y reaseguradoras). This new Law incorporates in Spain the (EU) Directive 2009/138 dated 25 November 2009.

The aim of this Law is to monitor and evaluate the financial risk of the insurance and reinsurance companies. It is based on three main pillars: a) uniform rules to evaluate the risks of the insurance companies; b) new supervision and control system which allow to internally asses their own financial risk; and c) to introduce several measures reaching transparency and public information about the risks entered into by the insurance companies.

On this regard, internal and external audits shall be made so they can bond and publicly show the financial situation and how they face their risks in the insurance market. Furthermore, an annual report shall be also made with their key financial information so it will be known to the public.

As a result of the above, the new organisation and supervising system requires disciplinary measures so new infringements and penalties are now considered. Henceforth, the Spanish Directorate-General of Insurance and Pension Funds (aka ‘DGS’) will be empowered to take different measures in order to guaranty the solvency and transparency of insurance companies.

The Organisation, Supervision and financial solvency of Insurance and Reinsurance Companies Law also have wide repercussions on other Spanish legal regulations, inter alia:

  • The Spanish Insurance Contracts Law: the assureds and the policy holders of health insurance policies will not have to inform to the insurance company about the change of the assured personal health status.
  • The Spanish Building Construction Law (‘Ley de Ordenación de la Edificación’) now allows the construction developer to guarantee its builder’s risks with bank bonds instead of the former obligation of underwrite a builder’s risk insurance policy. It will increase the guarantees of a house buyer in relation to possible claims against the builders and house sellers.
  • The Spanish Pension Plans and Funds Law: it helps to scale economy by extending the economic and financial transactions allowed over the pension funds.
  • The Spanish Bankruptcy Law updates the new competences of the Insurance Compensation Consortium into the insolvency proceedings.
  • The Spanish Motor Vehicles Public Liability and Insurance Law now force to the insurance companies to ratify the collective agreements of direct compensation to the individuals affected by motor vehicle accidents (regardless of which the insurance company is the actual liable for the injuries and damages due to internal compensation agreements between the insurance companies). It also will allow the insurance companies to ratify heath collective agreements so the personal assistance in case of accident can be performed quicker.

Policy holders, assureds and beneficiaries should be happy with all these new measures which increase the transparency and the solvency of the insurance companies so the financial risk is now monitored rising up the goal of a financial transparency and supervision.

This article is filed under:  Industry news

About the contributors

  • Bernardo Ruiz Lima Partner

    Bernardo deals regularly with insurance claims, logistics and transport issues, P&I and salvage proceedings.

    Read more


  • Juan José Bernardo Abogado

    Juan José deals regularly with all matters of Road Transport and Shipping Law as well as with International Trade Law and Insurance Law.

    Read more