During the last decades we have witnessed a proliferation of compulsory insurance legally required for the exercise of different professions, the performance of activities or for the ownership of movable or immovable assets. This phenomenon is due to the existence of a number of global tendencies that have led the various national (and international) legislators to impose this obligation: consumers protection, increase of the risk of the ordinary life or the proliferation of the strict liability systems.
However, in addition to these global circumstances, in Spain, there are certain particular circumstances that will also have an influence on the creation and demand of compulsory insurances:
- A high degree of delegation of powers that translates into the existence of four regulatory levels requiring compulsory insurances: European, national, regional and local.
- A high degree of state interventionism that makes an increasing number of economic, entrepreneur and even leisure activities subject to administrative authorization which goes hand in hand with the purchase of a compulsory insurance.
The confluence of these national circumstances together with the previously referred global tendencies, has led Spain to a situation of legislative hypertrophy in the area of compulsory insurance as gives evidence the study carried out in 2014 by the Spanish branch of the German insurer HDI, in which more than 800 compulsory insurances were identified.
Although this proliferation in mandatory insurances creates various problems in practical terms, these requirements nonetheless are constantly opening new business opportunities and markets to insurers that operates in Spain.
However, these business opportunities are limited by the difficulties that exists in accessing information on new compulsory insurances. Even though there exist since 2015 an official registry and an on-line data base, the current list is not updated, which makes it absolutely useless to insurers and particularly, as a reference for international insurers who might be interested in developing and market new specialized products in Spain.
Therefore, we have considered it appropriate to prepare a brief summary of some of the most relevant regulations approved in Spain between November / December 2017 and December 2018, in which insurance contracting are required.
Finally, it is necessary to point out that the legislative dispersion that we have identified makes it extremely difficult to prepare a comprehensive list and consequently, it is merely indicative.
II.- COMPULSORY INSURANCES REQUIRED BY NATIONAL RULES.
(i) AVIATION – Drones: Royal Decree 1036/2017, of December 15th, which regulates the civil use of aircrafts operated by remote control.
Royal Decree 1036/2017, of December 15, which regulates the civil use of aircraft operated by remote control, is intended to establish the legal regime applicable to drones where (EC) 216/2008 does not otherwise apply. Consequently, this Royal Decree will only apply to commercial flights and to specialized air operations, understood as technical, scientific or aerial works, commercial or non-commercial, other than transport operations.
In accordance with this Royal Decree the operator of aircraft operated by remote control must purchase an insurance policy or lodge other financial guarantee in order to cover its civil liability vis-à-vis third parties for damages that may be caused by the execution of specialized air operations and/or experimental flights. The coverage or the financial guarantee must comply with economical limits established:
- In Royal Decree 37/2001, of January 19th, which updates the amount of compensation for damages provided for in Law 48/1960, of July 21st, on Air Navigation, for aircraft less than 20 kg of maximum take-off mass.
- In Regulation (EC) No 785/2004 of the European Parliament and of the Council of 21 April 2004 on insurance requirements for air carriers and air operators, for those aircraft with a maximum take-off mass or greater than 20 kg.
(ii) AVIATION – Unmanned balloons: Royal Decree 1180/2018, of September 21st, which develops the Rules of the Air and the common operational provisions for air navigation services and procedures.
The Rules of the Air establishes in its Third Additional Provision that operators of unmanned free balloons, as defined in Appendix 2 of the Standardized European Rules of the Air, are subject to assure its civil liability insurance against third parties for damages through insurance policy or other financial guarantee, according to the coverage limits established in Regulation (EC) No. 785/2004 on the insurance requirements of airlines and air operators.
(iii) RAILWAY – Liability on cargo, passengers and third parties: Royal Decree 271/2018, of May 11th, which modifies the Regulation of the Railway Sector.
The Regulation of the Railway Sector, in its original wording, imposed on owners of freight and passenger wagons operating through railroad companies the obligation to have civil liability insurance covering the damages to passengers, to the railway infrastructure or to third parties in case of a railway accident. However, this requirement was not properly developed, leaving the limits, coverage, etc. in the air.
Royal Decree 271/2018 covers this gap and establishes that the owners of passenger wagons will comply with this obligation if they have contracted a civil liability insurance or financial guarantee covering the following amounts:
- A minimum coverage of € 3,000,000 per claim for personal damages.
- A minimum coverage of € 14.50 per gross kilogram of missing or damaged luggage with a maximum of € 600 per traveller.
In the case of the owners of freight wagons, it will be understood that they have complied with their obligation to assure its liability for damages suffered by the carried cargo as long as they have included in the contracts agreed with the corresponding limitation of liability clause.
Lastly, the owners of freight or passenger wagons will be considered to have sufficient coverage to respond to damages to the railway infrastructure or to third parties if they have underwritten an insurance policy or lodge a financial guarantee that covers the following amounts per claim:
- € 2,000,000 for damage to the infrastructure.
- € 500,000 for damages to the property of third parties.
- € 900,000 euros for death or injury to third parties that are not travellers of other railway companies.
In the case of transport of dangerous goods, the coverage must be double that provided in letters b) and c).