Trends and prospects
What are the current trends in and future prospects for the insurance and reinsurance markets in your jurisdiction?
Contrary to insurance industry expectations, Spain has not yet implemented the EU Insurance Distribution Directive (IDD). EU member states had to transpose the IDD into their national law by 1 July 2018 and had to apply the national rules by 1 October 2018 at the latest. It is expected that the new Spanish Act on Distribution of Private Insurance and Reinsurance will be approved in the next year, although the political situation does not allow for reliable predictions. The new act will replace the Private Insurance and Reinsurance Mediation Act 2006.
In addition, a regulatory sandbox will be implemented in Spain with the goal of facilitating innovation in and the development of financial services in line with existing regimes in the United Kingdom, the Netherlands and Denmark.
What is the primary legislation governing the (re)insurance industry in your jurisdiction?
The (re)insurance industry is governed by Law 20/2015 on the regulation, supervision and solvency of insurance and reinsurance entities. Law 20/2015 transposed the EU Solvency II Directive into Spanish law, and entered into force on January 1 2016. At the same time, the previously applicable regulations were abrogated, except for a few provisions that are still in force.
Law 20/2015 also amended several provisions of the Insurance Contract Act – namely, on:
- the transparency of policies regarding coverage, limitations and exclusions;
- the aggravation of risk; and
- the timings for policyholders to oppose the extension of a policy.
Law 20/2015 was implemented by Royal Decree 1060/2015 on the regulation, supervision and solvency of insurance and reinsurance entities.
Which government bodies regulate the (re)insurance industry in your jurisdiction and what is the extent of their powers?
The Ministry for the Economy and Competitiveness governs the regulation of insurers within the Spanish territory.
Responsibility for the day-to-day regulation of insurance and reinsurance business conducted in Spain is delegated to the Directorate General for Insurance and Pension Funds (DGIPF), a division of the Ministry for the Economy and Competitiveness.
The main focuses of the DGIPF are:
- the control of insurance activities;
- the competence and suitability of the directors and certain other senior managers;
- the appropriateness and robustness of the systems and controls that the insurer has in place for the conduct of its business;
•the administrative protection of the insured, beneficiaries, injured third parties and participants in pension plans through the attention and resolution of complaints; and
•the oversight and punishment of certain infractions.
Other areas such as policy terms and wordings, technical issues and the rate of premiums and commissions are more lightly regulated and are not subject to authorisation or filing, although the DGIPF may require insurers to submit this information at any time.
Ownership and organisational requirements
Ownership of (re)insurers
Are there any restrictions on ownership of or investment in (re)insurers in your jurisdiction, including any limits on foreign ownership/investment?
Law 20/2015 on the regulation, supervision and solvency of insurance and reinsurance entities lays down some specific requirements for the acquisition of stakes in (re)insurers.
What regulations, procedures and eligibility criteria govern the transfer of control of/acquisition of a stake in a (re)insurer?
(Re)insurers must comply with notification requirements in regard to certain transactions:
- Any acquisition of shares that involves obtaining a percentage of a company’s share capital or voting rights equal to or greater than 5% must be notified to the DGIPF within 10 working days of the acquisition.
- Any acquisition or increase of a significant shareholding that involves obtaining a percentage of a company’s share capital or voting rights equal to or greater than 20%, 30% or 50%, or obtaining a dominant position, is subject to prior notification to the DGIPF, which may oppose or object to the acquisition.
- Any disposal of shares that involves ceasing to have a significant shareholding or a dominant position is subject to prior notification to the DGIPF.
Insurers must notify the DGIPF of the identity of shareholders with significant stakes, the amount of those holdings and any changes in the shareholding percentages. Significant shareholding data must be disclosed at shareholders’ meetings.
Must (re)insurers adopt a certain legal structure in order to operate? If no mandatory company organisation applies, what are the common structures used?
Insurers must adopt one of the corporate structures allowed under Law 20/2015:
- a public limited company;
- a European company,
- a mutual company;
- a cooperative;
- a European cooperative society; or
- a social welfare mutual association.
Reinsurers must take the corporate structure of a public limited company or an European company.
Do any particular corporate governance requirements apply to (re)insurers, including any eligibility criteria for directors and officers?
(Re)insurers must have an effective system of governance in place that ensures a sound and prudent management of the business. That system must at least include an adequate transparent organisational structure with a clear allocation and appropriate segregation of responsibilities and an effective system for ensuring the transmission of information.
Regarding directors and officers, Law 20/2015 establishes that those who are in charge of the effective management of the insurer or reinsurer must be commercially and professionally trustworthy, and have the appropriate professional qualifications, knowledge and experience to ensure sound and prudent management.
In addition, where applicable, directors and officers must comply with the duties of diligence and loyalty set out in the Capital Companies Law.
Which (re)insurers must obtain authorisation from the regulator before operating on the market and what is the procedure for doing so?
Insurers or reinsurers based in the European Economic Area (EEA) which are duly authorised to write business in their countries will be entitled to carry out business in Spain under either the freedom of establishment regime (as a branch) or the freedom to provide services regime (FOS) subject to compliance with the EU notification procedure. In both cases, they must abide by the regulations dictated by Spain, as the host member state, for reasons of the general good, as well as the applicable regulatory rules. To set up an insurance branch, after the appropriate EU notification procedure has been completed and all other applicable requirements have been met, the DGIPF must enter the branch office in the Administrative Register of Insurance Entities. Further, the branch office must be recorded in the Companies Register. Insurers acting under FOS will be entered in an administrative register kept by the DGIPF.
However, reinsurers willing to write business in Spain may do so by setting up a branch in Spain or under the FOS regime without obtaining prior administrative authorisation or giving prior notification to the DGIPF.
Foreign insurers and reinsurers other than EEA companies must obtain authorisation from the Ministry for the Economy and Competitiveness if they wish to set up a branch in Spain.
What are the minimum capital and solvency requirements for (re)insurers operating in your jurisdiction?
Under the EU Solvency II Directive, (re)insurers must comply with minimum capital and solvency capital requirements.
In terms of the minimum capital requirements, their own funds must reach the following amounts:
- €2.5 million for non-life insurance undertakings, including captive insurance undertakings;
- €3.7 million for life insurance undertakings, including captive insurance undertakings;
- €3.6 million for reinsurance undertakings, except in the case of captive reinsurance undertakings, in which case no less than €1.2 million; and
- for both life and non-life insurance undertakings, the sum of the first two amounts set out above (ie, €6.2 million).
These amounts represent the lowest possible capital that any (re)insurer should hold. Not reaching this minimum level of financial resources will imply that policyholders and beneficiaries are exposed to an unacceptable level of risk. Capital minimum must be calculated at least quarterly and the results reported to the DGIPF.
In regard to the solvency capital requirements, (re)insurers must meet a solvency margin calibrated to ensure all of the quantifiable risks to which an (re)insurer is exposed, as well as new business expected to be written over the following year. Solvency margin must be calculated at least once a year and reported to the DGIPF.
Do any other financial requirements apply?
Aside from minimum capital and solvency requirements, (re)insurers companies must establish technical provisions to cover all of the obligations assumed under their insurance and reinsurance contracts. The value of technical provisions must correspond to the amount that a (re)insurer would have to pay if it were to transfer its (re) insurance obligations immediately to another (re)insurer.
Are personnel of (re)insurers subject to any professional qualification requirements?
Law 20/2015 on the regulation, supervision and solvency of insurance and reinsurance entities establishes that those who are in charge of the effective management of the insurer or reinsurer must be commercially and professionally trustworthy, and have the appropriate professional qualifications, knowledge and experience to ensure sound and prudent management.
What rules and requirements govern the business plans of (re)insurers?
Law 20/2015 establishes that a business plan is a compulsory requirement to obtain the authorisation to operate in the insurance sector in Spain. The business plan must outline:
- the intended lines of business;
- the project objectives;
- the nature of the risks;
- the territories in which the company intends to do business;
- the distribution and sales system;
- operational structuring; and
- the financial and technical resources available.
What risk management systems and procedures must (re)insurers adopt?
(Re)insurers must establish an effective risk-management system covering the strategies, processes and reporting procedures necessary to identify, measure, monitor, manage and report, on a continuous basis, the risks to which they are or could be exposed. This system must be effective and well integrated into the organisational structure and in the decision-making processes of the (re)insurer.
Regarding this risk-management system, every (re)insurer must:
- conduct its own risk and solvency assessment regularly and without delay following any significant change in the risk profile;
- establish an effective internal control system with regulatory compliance functions;
- provide for an effective internal audit function that will include an evaluation of the adequacy and effectiveness of the internal control system and other elements of the system of governance; and
- provide for an effective actuarial function.
Reporting and disclosure
What ongoing regulatory reporting and disclosure requirements apply to (re)insurers?
(Re)insurers must disclose publicly and submit to the DGIPF, on an annual basis, a solvency and financial condition report.
The report must include descriptions of:
- the business and its performance;
- the system of governance;
- the risk-management system;
- the bases and methods used for financial valuation; and
- the capital management.
The non-disclosure of information is permitted by the DGIPF where:
- by disclosing such information, competitors would gain a significant undue advantage; or
- there are obligations to policyholders or other counterparty relationships binding an undertaking to secrecy or confidentiality.
Where non-disclosure is permitted, a (re)insurer must make a statement to this effect in its solvency and financial condition report stating the reasons.
Regarding updates, in the event of a major development significantly affecting the relevance of the information disclosed in the solvency and financial condition report, a (re)insurer must disclose appropriate information as to the nature and effect of that major development. A ‘major development’ is defined as involving non-compliance with the minimum capital requirement or significant non-compliance with the solvency capital requirement.
Concerning additional voluntary information, (re)insurers may disclose any information or explanation related to their solvency and financial conditions which is not already required to be disclosed in accordance with Law 20/2015 and Royal Decree 1060/2015.
Do any other operating requirements apply in your jurisdiction?
(Re)insurers must also comply with certain accounting requirements to ensure that their accounts books clearly reflect the actual financial situation.
What are the consequences of non-compliance with the operating requirements applicable to (re)insurers?
Without prejudice to civil or criminal provisions, a (re)insurer that fails to comply with operating requirements laid down by Law 20/2015 will be subject to the administrative penalties prescribed for that infringement.
Administrative infringements and their penalties are classified depending on the seriousness of the infringement:
•Very serious infringements are penalised by:
orevocation of the authorisation;
osuspension of the authorisation to operate in one or several insurance classes for five to 10 years;
opublication of the infringement in the Official State Gazette; or
oa fine of between 1% of the entity's equity or €240,001.
Very serious infringements are time barred after five years.
•Serious infringements are penalised by:
osuspension of the authorisation to operate in one or more insurance class for up to five years;
opublication of the infringement in the Official State Gazette; or
oa fine amounting of between €60,000 and €240,000.
Serious infringements are time barred after four years.
•Minor infringements are penalised by:
oa fine of up to €60,000; or
oa private admonition.
Minor infringements are time-barred after two years.
What general rules, requirements and procedures govern the conclusion of (re)insurance contracts in your jurisdiction?
The main substantive insurance and reinsurance rules are contained in the Insurance Contract Act 1980. Generally, all of the act’s provisions are mandatory and will prevail over the terms and conditions of the policy unless the latter are more favourable to the insured. Regard should also be had to the Civil Code.
The conditions of the insurance contract must be written in a clear and precise way, and signed by the insured (there are special rules for electronic contracts).
Further, clauses that limit or restrict the rights of the insured must be highlighted and written in bold, and explicitly accepted by the policyholder or insured. Otherwise, the clause may be null and void. It is a requirement to include a statement that the policyholder or insured has read the limitative clauses, if any, and agrees to them. The policy must describe, in a clear and comprehensive manner, the guarantees and covers and the applicable exclusions and limitations, which must be highlighted.
Regarding large risks insurance, as defined by Law 20/2015 on the regulation, supervision and solvency of insurance and reinsurance entities, the provisions of the Insurance Contract Act are not mandatory and parties may depart from them. Reinsurance is also not subject to the mandatory provisions of the act.
Marine insurance is regulated by the Maritime Navigation Act 2014, which abrogated the former rules contained in the Commerce Code.
Are (re)insurance contracts subject to any mandatory/prohibited provisions?
In general, all of the provisions of the Insurance Contract Act are mandatory, with some exceptions.
Regarding large risks insurance, the provisions of the Insurance Contract Act are not mandatory and parties may depart from them. The fundamental effect of an insurance contract involving a large risk is that the parties are free to agree as they wish, subject to the general limits to party autonomy and to the fundamental principles of insurance. However, the act may apply to a large risk on a supplementary basis if no other provision is made in the insurance contract.
As for reinsurance contracts, reinsurance is regulated as a type of casualty insurance and is not subject to the mandatory provisions of the act. Therefore, party autonomy fully operates subject to the general limits to party autonomy (ie, the law, public morality and public policy).
Can any terms be implied into (re)insurance contracts (eg, a duty of good faith)?
Terms implied by statute are fairly common under Spanish civil law. Notably, this is the case of contracts for sale. There are some limited cases in insurance law (data protection rules and protection for extraordinary risks in connection with certain lines) and virtually none with regard to reinsurance contracts.
The courts could imply and incorporate terms when interpreting, construing or integrating the contract, but this is rare. In principle, incorporation by usage of principles such as ‘follow the fortunes’ or ‘follow the settlements’ would be feasible, subject to evidence and consistent observance in the relevant market.
What standard or common contractual terms are in use?
The policy is usually divided into general, particular and special conditions. Under normal circumstances, particular and special conditions prevail over the general conditions. Particular conditions (the schedule) concern:
•the parties’ names;
•the risks insured;
•the sum insured;
•the inception date and duration; and
Standard terms concern:
•the description of the risk;
•payment of the premium;
•the effects of non-payment of premium;
•notification of losses and claims;
•claims procedures; and
What is the state of development in your jurisdiction with regard to the use of ‘smart’ contracts (ie, blockchain based) for (re)insurance purposes? Are any other types of financial technology commonly used in the conclusion of (re)insurance contracts?
In Spain, smart contracts are still in their infancy and currently there is no specific legislation governing their specific issues. Nevertheless, smart contracts are considered as electronic contracts; hence electronic contracts regulation governs them (the Act 34/2002 on Information Society Services and E- Commerce, the Act 59/2003 on Electronic Signature and the Act 21/2011 on Electronic Money). The general rules on contracts and legal business are also applicable.
According to insurance literature, these new technologies are resulting in a new business model which is moving towards a more widespread use of smart contracts foreseeably from 2020 onwards.
Electronic means are used to conclude insurance contracts, namely in the field of motor insurance, although a combination of electronic, telephone and physical means are used. .
According to the Law on Information Society Services and E-Commerce, contracts concluded by electronic means are valid when all legal requirements for their validity are met. Particularly relevant are the rules governing consent expressed electronically.
What rules and procedures govern breach of contract (for both (re)insurer and insured)?
Breach of re(insurance) contracts is governed by the Insurance Contract Act and the Civil Code.
What consumer protection regulations are in place to safeguard the rights of purchasers of insurance products and services?
The Spanish legal system endeavours to protect consumers, so the following consumer protection regulations apply to insurance contracts:
•the consolidated text of the Law on the Protection of Consumers and Users;
•the General Conditions of Contracts Act; and
•the Distance Commercialisation of Services for Consumer Act.
Regarding interpretation of contracts, ambiguous clauses may not be construed in favour of the drafter of the contract. In the case of a contract with consumers, which are characterised as an ‘adhesion’ contract by case law, the courts apply the contra proferentem rule and usually find in favour of the insured.
What general rules, requirements and procedures govern the filing of insurance claims?
As a general rule, insurance claims must be reported within seven days of the insured becoming aware of the loss. A longer term can be agreed for the benefit of the insured. Shorter terms could be agreed in the case of a large risk. However, in practice, many policies insert imprecise wording along the lines of “as soon as possible or practicable”, which could conceivably be longer than the statutory seven days.
Late notification of the loss does not per se entitle the insurer to rescind the contract, but only to claim damages, if any. As an exception to the general rule, the prompt notification of the loss can be made a condition precedent to the insurer’s liability if the risk in question is a “large risk”.
The policyholder or the insured must provide all information available on the circumstances and consequences of the loss. Breach of this duty through gross negligence or bad faith on the part of the insured would release the insurer from its obligation to indemnify.
What is the time bar for filing claims?
The time bar is:
•two years for claims relating to casualty and property insurance contracts; and
•five years for claims relating to life, accidents and health insurance.
Denial of claim
On what grounds can the (re)insurer deny coverage?
According to the Insurance Contract Act, the insurer will be released from its obligation to indemnify if the insured acts with gross negligence, bad faith or with the intent to prejudice the insurer, as follows:
•Before concluding the contract, the policyholder must disclose to the insurer, pursuant to the risk questionnaire submitted by the insurer, all of the circumstances known by the policyholder that may be relevant for the evaluation of the risk. Regarding ‘inaccuracies’ (misrepresentations) or ‘reservations’ (concealment or non-disclosure) in the information provided when completing the questionnaire or proposal form:
- if the insurer becomes aware of the inaccuracies or reservations before the loss takes place, it will be entitled to rescind the contract within one month of learning about the misrepresentation or reservation; or
- if the loss occurs before the rescission is notified or if the misrepresentation or non-disclosure is discovered after the loss takes place, the insurer will be released from its obligation to indemnify if it proves that the policyholder acted in bad faith or with gross negligence. Otherwise, the indemnity shall be reduced proportionally to the premium the insurer would have charged had the real entity of risk been disclosed to it.
•Regarding premiums, if the first or single premium has not been paid before the loss takes place, the insurer will be released from its obligation to indemnify.
•The policyholder or the insured have the duty to provide all information available on the circumstances and consequences of the loss. The breach of this duty with gross negligence or bad faith on the part of the insured would release the insurer from its obligation to indemnify.
•The policyholder must diminish or minimise the loss. If the policyholder breaches this duty with intent to prejudice the insurer, the latter will be released from its obligation to indemnify.
Aside from the compliance of policyholders’ duties, the insurer may deny coverage if:
•the action is time barred;
•exclusions apply (in the context of third-party liability insurance, exclusions may not be raised against the injured third party); or
•civil liability of the responsible person has not been proven (eg, amount of the loss or causal link).
What rules and procedures govern the insured’s challenge of the denial of a claim?
Law 20/2015 on the regulation, supervision and solvency of insurance and reinsurance entities provides for dispute resolution mechanisms in insurance matters. These are litigation, arbitration (subject to certain limitations in the case of consumers) and mediation.
Regarding litigation before the civil courts, the insured can bring an action against the insurer proving that the loss is covered by the insurance contract and it did not act with bad faith, gross negligence or with the intent to prejudice the insurer regarding its duties of disclosure information, payment the premium or diminish or minimise the loss.
On what grounds can a third party file a claim directly with the (re)insurer?
Under Article 76 of Insurance Contract Act, the injured third party has a direct action against the third-party liability insurer. The insurer will be bound within the limits and conditions set out in the policy.
Are punitive damages insurable?
The concept of punitive damages, which are awarded to punish or deter particularly injurious or wilful misconduct of the party, is generally not admitted in Spanish law. Damages are compensatory in nature. It is usual that policies exclude punitive damages in certain jurisdictions (the United States and Canada). However, as an exception to this general principle, unjustified delays in the payment of claims by insurers are subject to a special rate of interest which is punitive in nature as has been characterised by case law since the punitive interest rate is unrelated to the actual cost of money.
What regime governs (re)insurers’ subrogation rights?
Once the insurer has paid the insured, it may be subrogated to the legal position of the insured and exercise the rights and claims that the insured would have against the party responsible for the loss up to the limit of the indemnity paid. The insured will be responsible for any damage caused by its acts or omissions that affect the insurer subrogation’s rights.
The insurer cannot exercise any subrogation rights that might prejudice the insured. The insurer also cannot exercise any subrogation rights against the person for whose actions the insured is liable, nor relatives of the insured.
These restrictions will not apply when liability derives from an act in bad faith of this person or if such liability is covered by an insurance contract. In the latter case, subrogation is limited to the terms and conditions of that insurance contract.
How are the services of insurance intermediaries regulated in your jurisdiction?
The Private Insurance and Reinsurance Mediation Act 2006:
•regulates access to the profession of insurance or reinsurance intermediary. Insurance intermediaries are subject to qualification and training requirements as set out in the Resolution of the Insurance Authority dated 2011 and in Royal Decree 764/2010;
•regulates the operations of insurance and reinsurance intermediaries; and
•classifies intermediaries in insurance agents, insurance brokers and reinsurance brokers.
What tax liabilities arise in the conduct of (re)insurance business?
The insurance premium tax (IPT) is 6% of all premiums collected in Spain in non-exempt lines. The IPT is ultimately paid by the insured, but the insurer must collect and deliver it to the Treasury. For this purpose, the insurer must file returns on a periodical basis (monthly plus an annual summary).
The following transactions are exempt from the IPT:
•those related to the compulsory social security insurance and collective insurances for alternative systems to pension plans and pension funds;
•capitalisation operations based on actuarial techniques;
•export credit insurance;
•insurance operations relating to international transport of goods or passengers;
•insurance operations relating to international shipping or air travel, with the exception of private navigation or aviation for leisure purposes;
•insurance operations of medical care assistance and disease; and
•operations relating to insured prevision plans.
Insurers must also pay to the Insurance Compensation Consortium (ICC) a levy or surcharge of 0.15% on all premiums for the insurance of risks located in Spain other than premiums for life and export credit insurance, which is intended to finance the winding up of insurers.
Finally, insurers must collect from the insured and turn over to the ICC a tariff (in reality, a premium) for the coverage of extraordinary risks. This tariff is paid only on certain lines.
The levies and tariffs payable to the ICC are ultimately payable by the insured, but the insurer is directly liable to the ICC.
What regime governs the insolvency of (re)insurers?
The legal framework of insolvency of (re)insurers comprises the Insolvency Act 2003, Law 20/2015 on the regulation, supervision and solvency of insurance and reinsurance entities and the Insurance Compensation Consortium (ICC) Statute (approved by Royal Legislative Decree 7/2004, as amended).
There are two main options for insolvency:
•Dissolution and liquidation agreed by the Ministry for the Economy and Competitiveness. The liquidation shall be entrusted to the ICC. The ICC is in charge of the liquidation of insurers with the ICC undertaking the role of liquidator in cases set out by Law 20/2015 and the ICC Statute.
•Insolvency proceedings subject to the Insolvency Act and carried out by the Commercial Courts. The Insolvency Act applies for all types of company, but there are some particular provisions regarding (re)insurers, including that the ICC conducts the liquidation.
Effect on insureds
How does a (re)insurer’s insolvency affect insureds and the (re)insurer’s obligations to insureds?
The main goal of the winding-up proceedings as handled by the ICC is the timely payment of the creditors’ rights under the relevant insurance policies (the insured, beneficiaries and injured third parties). The ICC purchases the creditors’ rights in accordance with the foreseeable net liquidation balance without having to wait for the winding-up procedure to be completed. Payments are made with the ICC’s resources and the ICC is subrogated to the creditors’ rights. Any recoveries will belong to the ICC. This is a significant improvement to the ordinary insolvency proceedings.
Are there any compulsory or preferred venues for insurance litigation in your jurisdiction?
There are no special procedures for insurance litigation.
Insurance disputes relating to consumers (mass claims) are normally resolved by litigation in court, although arbitration is also available in certain circumstances. Insurance disputes concerning large risks tend to be (but are not always) resolved by arbitration.
In regard to venues, within the Spanish territory any disputes arising out of the contract between the insurer and the insured must be referred to the courts in the domicile of the insured. Parties to a large risk insurance may agree otherwise.
The civil first-instance courts are the competent courts to hear insurance disputes.
How are insurance disputes with a cross-border element handled in your jurisdiction?
Concerning cross-border contractual disputes, the starting point is to check whether there is a proper and valid choice of law and dispute resolution method, whether through the courts or arbitration, in the relevant contract. Many difficulties may be avoided if this concern is adequately dealt with. If no courts have been chosen, jurisdiction should be established in accordance with EU Regulation 1215/2012 or, if inapplicable, in accordance with Spanish international jurisdictional rules. Other important aspects are:
•the service of the defendant;
•the need for translations, which can delay proceedings;
•application and enforcement of interim and provisional measures;
•the taking of evidence abroad; and
•the enforcement of the relevant judgment or award eventually.
Concerning cross-border non-contractual (tort) disputes, namely where the injured third party sues in its own country, there can be issues relating to the applicable law and jurisdiction.
What issues are commonly the subject of insurance litigation?
The most common issues are coverage (scope of risk and exclusions) and the quantum of damages.
What is the typical timeframe for insurance litigation?
The length of the proceeding depends on several varying factors, from the complexity of the case to the courts’ workload. The law provides for fixed deadlines but these are rarely (if ever) met.
According to the last available national judicial statistics published by the General Council of the Judiciary Power in 2018, the average length of proceedings were:
- seven months at the first-instance civil courts;
- eight months at the Court of Appeal (in case of subsequent appeal); and
- 18.9 months for a Supreme Court appeal, if applicable.
However, this data is not entirely comprehensive, as it includes different kinds of proceeding and cases settled or adjudicated. Nonetheless, it provides a certain type of overview, albeit optimistic.
What regime governs the arbitrability of insurance disputes?
The Arbitration Act 2003 (as amended) recognises the freedom of parties to submit to arbitration any disputes relating to matters which they can freely dispose of in accordance with the law.
In the case of insurance, this general principle has been confirmed by Law 20/2015 on the regulation, supervision and solvency of insurance and reinsurance entities, both with regard to large and mass (consumer) risks, although the latter with qualifications. In the event of mass risks (consumers), any disputes between insurers and consumers may be referred to the Consumers Arbitration System as set out in the Law on the Protection of Consumers and Users. Insurance disputes concerning large risks tend to be (but are not always) resolved by arbitration. The parties to a contract involving a large risk are free to submit their disputes to arbitration having regard to the general rules set out in the Arbitration Act.
The parties to a reinsurance contract are free to refer the dispute to the courts of their choice, or to arbitration or any other alternative dispute resolution method.