Regulatory Alerts2015-07-15
Law 20/2015 of 14 July on the Regulation, Supervision and Solvency of Insurance and Reinsurance Undertakings
The Spanish State issued Law 20/2015 to transpose the Solvency II Directive, establishing a comprehensive regulatory framework for the authorization, governance, and supervision of insurance and reinsurance undertakings. The law mandates strict capital adequacy requirements, robust risk management systems, and enhanced transparency obligations to ensure the financial stability of entities operating in Spain and the European Union. It further defines the powers of supervisory authorities, outlines procedures for handling financial deterioration, and establishes a detailed regime for sanctions and liquidation to protect policyholders and market integrity.
OFFICIAL STATE GAZETTE
No. 168 Wednesday, July 15, 2015 Sec. I. Page 58455
I. GENERAL PROVISIONS
HEAD OF STATE
7897 Law 20/2015, of July 14, on the regulation, supervision and solvency of insurance and reinsurance undertakings.
FELIPE VI
KING OF SPAIN
To all who see and understand this.
Know ye: That the General Courts have approved and I come to sanction the following law.
INDEX
Preliminary Title. General Provisions. Chapter I. Object and scope of application. Article 1. Object and purpose of the Law. Article 2. Subjective scope of application. Article 3. Objective scope of application. Article 4. Excluded activities. Article 5. Prohibited operations for insurance undertakings. Chapter II. Definitions. Article 6. Undertakings. Article 7. National supervisory authority. Article 8. Home Member State, host Member State and activities under the right of establishment and the freedom to provide services. Article 9. Participation or control relationships between undertakings. Article 10. Regulated markets. Article 11. Large risks. Article 12. Community co-insurance. Article 13. Governance system and outsourcing of functions. Article 14. Risks. Article 15. Sanitation measures and liquidation procedures.
Title I. Supervisory bodies and competences. Chapter I. Competences of the General State Administration. Article 16. Supervisory competences of the General State Administration. Article 17. Directorate-General of Insurance and Pension Funds. Article 18. Advisory Board for Insurance and Pension Funds. Chapter II. Competences of the Autonomous Communities. Article 19. Distribution of competences.
Title II. Access to the insurance and reinsurance activity. Chapter I. Access to the activity of Spanish insurance and reinsurance undertakings. Section 1. Conditions for access to the activity. Article 20. Administrative authorization. Article 21. Scope of the authorization.
Section 2. Requirements for obtaining the authorization. Article 22. General requirements for the authorization of insurance and reinsurance undertakings. Article 23. Denial of authorization. Article 24. Operations carried out without administrative authorization. Article 25. Organizations and groupings. Article 26. Prior consultation with supervisory authorities. Article 27. Nature, form and name of insurance and reinsurance undertakings. Article 28. Constitution. Article 29. Name. Article 30. Registered office. Article 31. Corporate purpose. Article 32. Business plan. Article 33. Share capital. Article 34. Mutual Fund. Article 35. Limitations on the distribution of dividends, calls for capital or any other type of remuneration linked to share capital. Article 36. Partners. Article 37. Close links. Article 38. Honesty and suitability of those exercising effective direction or performing functions that make up the entity's governance system. Article 39. Responsibility and duties of the administrative or management bodies of insurance or reinsurance undertakings. Article 40. Administrative register.
Section 3. Insurance mutuals, insurance cooperatives and social security mutual funds. Article 41. Insurance mutuals. Article 42. Insurance cooperatives. Article 43. Social security mutual funds. Article 44. Scope of coverage and benefits of social security mutual funds. Article 45. Mutual funds authorized to operate in insurance branches.
Section 4. Activity of Spanish insurance and reinsurance undertakings under the right of establishment and freedom to provide services in the European Union. Article 46. Spanish entities that may operate in the European Union. Article 47. Conditions for the establishment of branches. Article 48. Notification to operate under the freedom to provide services. Article 49. Statistical information relating to the cross-border activities of Spanish insurance undertakings.
Section 5. Activity of Spanish insurance and reinsurance undertakings in third countries. Article 50. Creation of entities and other operations in third countries.
Chapter II. Access to the activity in Spain of insurance and reinsurance undertakings from other states of the European Union. Section 1. General provisions for insurance and reinsurance undertakings. Article 51. Insurance and reinsurance undertakings from other Member States that may operate in Spain.
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Article 52. Compliance with legal provisions by insurance and reinsurance undertakings operating in Spain under the right of establishment or freedom to provide services. Article 53. Taxes and surcharges. Article 54. Liability insurance for motor vehicles.
Section 2. Activity under the right of establishment of insurance and reinsurance undertakings domiciled in other Member States. Article 55. Conditions for access to the activity under the right of establishment. Article 56. Supervision of branches in Spain by the authorities of the home State.
Section 3. Freedom to provide services activity of insurance and reinsurance undertakings domiciled in other Member States. Article 57. Conditions for access to the activity under the freedom to provide services. Article 58. Specific requirements for liability insurance for motor vehicles. Article 59. Tax obligations. Article 60. Underwriting agencies.
Chapter III. Access to the activity in Spain of insurance and reinsurance undertakings from third countries. Section 1. Insurance undertakings from third countries. Article 61. Authorization of branches of insurance undertakings from third countries. Article 62. Limitations on the activity in Spain of insurance undertakings from third countries.
Section 2. Reinsurance undertakings from third countries. Article 63. Branches of reinsurance undertakings from third countries. Article 64. Activity in Spain of reinsurance undertakings from third countries from the home country.
Title III. Exercise of the activity. Chapter I. Governance system of insurance and reinsurance undertakings. Article 65. General requirements of the governance system. Article 66. Risk management system, internal assessment of risks and solvency, internal control system and functions of the governance system. Article 67. Outsourcing of functions.
Chapter II. Valuation of assets and liabilities, financial guarantees and investments. Section 1. Valuation of assets and liabilities, and rules on technical provisions. Article 68. Valuation of assets and liabilities. Article 69. Technical provisions. Article 70. Requirement and increase in the amount of technical provisions.
Section 2. Own funds. Article 71. Determination of own funds. Article 72. Classification of own funds into tiers. Article 73. Admissibility of own funds.
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Section 3. Mandatory solvency capital. Article 74. Calculation of mandatory solvency capital. Article 75. Methods for calculating mandatory solvency capital. Article 76. Requirement of additional mandatory solvency capital. Article 77. Responsibility of the administrative body regarding internal models.
Section 4. Minimum mandatory capital. Article 78. Minimum mandatory capital.
Section 5. Investments. Article 79. Rules on investments of insurance and reinsurance undertakings.
Chapter III. Public information on the financial and solvency situation. Article 80. Report on the financial and solvency situation. Article 81. Dispensation from disclosure of information in the report on the financial and solvency situation. Article 82. Updates of the report on the financial and solvency situation and additional voluntary information.
Chapter IV. Accounting obligations. Article 83. Accounting of insurance and reinsurance undertakings. Article 84. Formulation of consolidated accounts of groups of insurance and reinsurance undertakings.
Chapter V. Regime of holdings in insurance and reinsurance undertakings. Article 85. Obligations relating to the acquisition of holdings in insurance and reinsurance undertakings. Article 86. Effects of non-compliance. Article 87. Obligations relating to the reduction of a significant holding in an insurance or reinsurance undertaking. Article 88. Additional information obligations.
Chapter VI. Corporate operations. Section 1. Portfolio transfer. Article 89. Portfolio transfer between insurance undertakings.
Section 2. Structural modifications. Article 90. Structural modifications. Article 91. Exceptional cases of structural modifications.
Section 3. Statutory modifications. Article 92. Statutory modifications.
Section 4. Groupings and temporary unions of insurance or reinsurance undertakings. Article 93. Economic interest groupings and temporary unions of insurance or reinsurance undertakings.
Chapter VII. Market conduct. Section 1. Policies and tariffs. Article 94. Premium tariffs and technical bases. Article 95. Control of policies, tariffs and technical documentation of the activity.
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Section 2. Duty of information. Article 96. General duty of information to the policyholder.
Section 3. Conflict resolution mechanisms. Other provisions. Article 97. Conflict resolution mechanisms. Article 98. Advertising. Article 99. Protection of personal data. Article 100. Fight against insurance fraud.
Chapter VIII. Special solvency regime. Article 101. Scope of application. Article 102. Conditions for the exercise of entities subject to the special regime.
Chapter IX. Community co-insurance. Limited reinsurance. Article 103. Regime of community co-insurance. Article 104. Technical provisions of community co-insurance. Article 105. Limited reinsurance.
Chapter X. Conditions relating to the exercise of the activity by branches and subsidiaries of insurance and reinsurance undertakings from third countries. Article 106. Financial guarantees of branches of insurance and reinsurance undertakings domiciled in third countries. Article 107. Regime of branches of entities domiciled in third countries authorized in several Member States. Article 108. Equivalence of the solvency regime of reinsurance undertakings from third countries.
Title IV. Supervision of insurance and reinsurance undertakings. Chapter I. General principles. Article 109. Subjective and objective scope of supervision. Article 110. Proportionality of the actions of the Directorate-General of Insurance and Pension Funds. Article 111. Transparency of supervisory action. Article 112. Convergence of supervisory practices. Article 113. General supervisory powers. Article 114. Information to be provided for supervisory, statistical and accounting purposes. Article 115. Supervision of insurance and reinsurance undertakings of the European Union operating in Spain under the right of establishment or freedom to provide services. Article 116. Supervision of Spanish branches established in another Member State.
Chapter II. Financial supervision. Article 117. Content of financial supervision.
Chapter III. Supervision of market conduct. Article 118. Content of supervision of market conduct. Article 119. Administrative protection. Article 120. Prohibition of policies and tariffs.
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Chapter IV. Supervision by inspection. Article 121. Inspection actions. Article 122. Subjects of the inspection activity. Article 123. Inspector personnel. Article 124. Inspector powers. Article 125. Documentation of inspection actions. Article 126. Supervision procedure by inspection.
Chapter V. Duty of professional secrecy and use of confidential information. Article 127. Duty of professional secrecy. Article 128. Exchange of confidential information. Article 129. Cooperation with the European Insurance and Occupational Pensions Authority. Article 130. Cooperation agreements with third countries.
Title V. Supervision of groups of insurance and reinsurance undertakings. Chapter I. General provisions on groups. Article 131. Definitions and rules on the supervision of groups of insurance and reinsurance undertakings. Article 132. Groups subject to supervision. Article 133. Scope of application of group supervision.
Chapter II. Exercise of group supervision. Section 1. Functions and powers of the Directorate-General of Insurance and Pension Funds as group supervisor. Article 134. Exercise of group supervisor functions by the Directorate-General of Insurance and Pension Funds. Article 135. Powers of the Directorate-General of Insurance and Pension Funds as group supervisor. Supervisory College. Article 136. Access to information and verification.
Section 2. Collaboration with other supervisory authorities. Article 137. Convening and consultation between supervisory authorities. Article 138. Information requested from other supervisory authorities. Article 139. Cooperation with supervisory authorities of credit institutions and investment service firms.
Section 3. Levels of supervision. Article 140. Ultimate parent undertaking in the European Union. Article 141. National sub-group of insurance or reinsurance undertakings. Article 142. Sub-group of entities comprising national sub-groups of several Member States.
Chapter III. Financial situation of the group. Section 1. Group solvency. Article 143. Supervision of group solvency. Article 144. Report on the financial and solvency situation at group level. Article 145. Calculation of solvency at group level of participating entities. Article 146. Calculation of group consolidated solvency: method based on accounting consolidation. Article 147. Internal model of consolidated group and of the insurance and reinsurance undertakings of the group.
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Article 148. Requirement of additional mandatory solvency capital of consolidated group. Article 149. Deduction and aggregation method. Article 150. Regime of groups with centralized risk management.
Section 2. Risk concentration and intra-group transactions. Article 151. Supervision of risk concentration and intra-group transactions.
Section 3. Risk management and internal control. Article 152. Supervision of group governance system.
Section 4. Non-compliance with group solvency. Article 153. Measures intended to address non-compliance.
Chapter IV. Groups with parent entities outside the European Union. Article 154. Verification of equivalence.
Title VI. Situations of financial deterioration. Special control measures. Chapter I. Situations of financial deterioration. Article 155. Financial deterioration of insurance and reinsurance undertakings. Article 156. Non-compliance with mandatory solvency capital. Article 157. Non-compliance with minimum mandatory capital. Article 158. Content of the plan.
Chapter II. Special control measures. Article 159. Situations giving rise to the adoption of special control measures. Article 160. Special control measures that may be adopted. Article 161. Additional special control measures. Article 162. Collaboration of the Insurance Compensation Consortium in the execution of special control measures adopted. Article 163. Intervention of the insurance undertaking. Article 164. Procedure for adopting special control measures. Article 165. Provisional substitution of the administrative bodies. Article 166. Effects of special control measures in other Member States. Article 167. Measures adopted regarding insurance undertakings domiciled in other Member States. Article 168. Bankruptcy proceedings.
Title VII. Revocation, dissolution and liquidation. Chapter I. Revocation of administrative authorization. Article 169. Causes of revocation and their effects. Article 170. Revocation of administrative authorization to insurance undertakings domiciled in other Member States. Article 171. Revocation of administrative authorization of branches of entities domiciled in third countries.
Chapter II. Dissolution and liquidation of insurance and reinsurance undertakings. Section 1. Dissolution. Article 172. Causes of dissolution. Article 173. Resolution of dissolution. Article 174. Administrative dissolution.
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Section 2. Liquidation. Article 175. General rules of liquidation. Article 176. Effects in other Member States of the liquidation of Spanish entities. Article 177. Effects in Spain of the liquidation of insurance undertakings domiciled in other Member States and operating in Spain under the right of establishment or freedom to provide services. Article 178. Supervision of liquidation. Article 179. Protection of claims by insurance contract. Article 180. Legal regime of liquidators. Article 181. Liquidation process. Article 182. Effects on actions against insurance undertakings in liquidation.
Section 3. Liquidation by the Insurance Compensation Consortium. Article 183. Action of the Insurance Compensation Consortium in the liquidation of insurance and reinsurance undertakings. Article 184. General substantive rules. Article 185. General procedural rules. Article 186. Purchase of claims from the resources of the Insurance Compensation Consortium. Article 187. Payments from the resources of the entity. Article 188. General meeting of creditors. Article 189. Action of the Insurance Compensation Consortium in bankruptcy proceedings.
Title VIII. Offences and sanctions. Chapter I. Offences. Article 190. Offending subjects. Article 191. Responsibility of participants, liquidators or administrative and management officers. Article 192. Sanctioning power regarding insurance undertakings domiciled in other Member States. Article 193. Types of offences. Article 194. Very serious offences. Article 195. Serious offences. Article 196. Minor offences. Article 197. Statute of limitations for offences.
Chapter II. Sanctions. Article 198. Administrative sanctions on entities for very serious offences. Article 199. Administrative sanctions on entities for serious offences. Article 200. Administrative sanctions on entities for minor offences. Article 201. Responsibility in case of merger, global transfer of assets and liabilities or spin-off. Article 202. Sanctions for very serious offences committed by participants, liquidators, by those who, under any title, exercise effective direction and by those who perform the functions that make up the governance system. Article 203. Sanctions for serious offences committed by participants, liquidators, by those who, under any title, exercise effective direction and by those who perform the functions that make up the governance system. Article 204. Sanctions for minor offences committed by participants, liquidators, by those who, under any title, exercise effective direction and by those who perform the functions that make up the governance system.
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Article 205. Criteria for grading sanctions. Article 206. Measures inherent to the imposition of administrative sanctions. Article 207. Concurrence of administrative procedures and criminal proceedings. Article 208. Exercise of activities and use of designations reserved for insurance and reinsurance undertakings. Article 209. Statute of limitations for sanctions.
Chapter III. Sanctioning procedure. Article 210. Regulation of the sanctioning procedure. Article 211. Public complaint. Article 212. Administrative competences. Article 213. Time limits.
Additional Provision First. Regime applicable to the States of the European Economic Area that are not part of the European Union.
Additional Provision Second. Establishment and information on mandatory insurance.
Additional Provision Third. Validity of administrative authorization throughout the European Union.
Additional Provision Fourth. Validity of authorizations for extension of benefits granted to social security mutual funds.
Additional Provision Fifth. Information to the European Commission and the European Insurance and Occupational Pensions Authority regarding difficulties of Spanish insurance or reinsurance undertakings.
Additional Provision Sixth. Entities with special purpose.
Additional Provision Seventh. Revision of amounts expressed in euros.
Additional Provision Eighth. Obligations of the auditors of accounts of insurance and reinsurance undertakings.
Additional Provision Ninth. Insurance actuaries.
Additional Provision Tenth. Insurance experts, Loss Adjusters and Casualty Adjusters.
Additional Provision Eleventh. Agreements of insurance undertakings with bodies of the Social Security Administration.
Additional Provision Twelfth. Communications between supervisors on matters of sanctions.
Additional Provision Thirteenth. Surety insurance in favor of Public Administrations.
Additional Provision Fourteenth. Additional information obligations of insurance undertakings operating in the fire and natural elements branch.
Additional Provision Fifteenth. Technical bases and calibration of risks of funeral insurance.
Additional Provision Sixteenth. Progressive introduction of the authorizations established by this Law and other adaptation measures to Solvency II.
Additional Provision Seventeenth. Obligation of communication through electronic means.
Additional Provision Eighteenth. Regime for the calculation of technical provisions for accounting purposes.
Additional Provision Nineteenth. References to the norm