New Spanish Insurance Distribution Act (DSIDA)

The Spanish Government is in the process of drafting a new Spanish Insurance Distribution Act (‘DSIDA’), which would replace the current Insurance Intermediaries Act. A first draft has been circulated within the insurance market, in order to obtain feedback from those insurance distributors who might be affected by the provisions of the proposed Act.

The main purpose of the new Act is to incorporate the regulations of the Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on Insurance Distribution into domestic law and these must be incorporated into the domestic regime of the Member States before 23 February 2018. This has also been identified as an opportunity to update certain elements of the existing Insurance Intermediaries Act which have become outdated.

Although it is just a first draft, it gives a general overview of the key elements which will be regulated, in particular, in respect of insurance or reinsurance distribution services to consumers through any kind of distribution channel.

Essentially, the main novelties of the draft can be summarised as follows:

  • The DSIDA will apply to those whose activity consists in providing insurance or reinsurance distribution services to third parties. This would include insurance companies that sell insurance services directly and that are not subject to provisions of the existing Act.
  • A new package of consumers’ rights will be incorporated into the new Act. Consumers will benefit from the same level of protection despite the differences between the various distribution channels. The draft enhances consumer rights by obliging the insurance distributors to adopt customer protection measures and rules of conduct which are similar to the ones implemented in the banking and finance sector.
  • The applicable sanctions are considerably higher in comparison with the current fines, which are limited to a maximum of EUR 30,000. In respect of companies, the DSIDA establishes fines up to EUR 5,000,000 or up to 5 % of the total annual turnover according to the last available accounts approved by the management body, whichever is the higher. In respect of individuals, the fines can reach EUR 700,000.
  • Both insurance intermediaries and agents who are involved in the design of insurance products for their sale will have to submit an application for the approval of the products by the General Directorate of the Insurance before commercialising them and, additionally, will have to undergo regular inspections and reviews of those insurance products.

Although it is still a draft, the DSIDA has introduced some new issues for consideration by the insurance market. In particular, the inclusion of insurance coverholders as insurance distributors, the amount of the fines set out and the sale of insurance through websites will, no doubt, form part of the debate in the forthcoming months.

This article is filed under:  Industry news, Press releases

About the contributors

  • Juan Alegre Partner

    Juan is the head of our Madrid office. He specialises in wet and dry shipping and is a member of our Emergency Response team. Juan has experience of a wide variety of shipping problems, particularly concerning the carriage of oil and gas.

    Read more

  • Ann Marsden Partner

    Ann is a partner in our Madrid office. She specialises in shipping and has particular expertise in all aspects of personal injury related matters.

    Read more

  • Ernesto Rivera Partner

    Ernesto advises on shipping matters, including marine insurance, charterparties and bills of lading disputes, pollution matters and international shipbuilding and financing contracts, for shipowners, cargo owners, insurance companies and P&I Clubs.

    Read more

  • Bernardo Ruiz Lima Partner

    Bernardo deals regularly with insurance and reinsurance 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

  • Antonio de la Campa Cervera Abogado

    Antonio regularly deals with Road Law and Wet and Dry shipping cases.

    Read more

  • Victor Mata Abogado

    Victor is normally involved in handling personal injury files, contractual disputes and salvage proceedings.

    Read more

  • Javier Hernández Valenciano Abogado

    Javier deals regularly with all matters of Shipping and International Trade Law. He is fluent in Spanish (mother tongue) and Italian.

    Read more

  • Maria Vidal Abogado

    María deals regularly with Road and Air Transport and Shipping Law, as well as with Insolvency Law matters. She is fluent in Spanish (mother tongue).

    Read more