- The objective of the standard is the protection of consumers and the transparency and development of the insurance activity
- The solvency regime of the entities, the government system and the information and transparency requirements are developed
The Council of Ministers has approved the Royal Decree for the Development of the Law on the Regulation, Supervision and Solvency of Insurance and Reinsurance Entities. This regulation completes the adaptation of the insurance sector to Solvency Directive II, partially transposed by Law 20/2015, of July 14, on the same subject.
The ultimate goal of the standard is the protection of consumers and promote transparency and the development of insurance activity.
The novelties are the following:
- Solvency regime: the new solvency regime is developed by setting the rules for the proper calculation of technical provisions, the determination, classification and admissibility of own funds and the calculation of mandatory solvency capital, among others.
- Special solvency regime: a special national regime is established to which entities that do not exceed certain quantitative limits in their activity and entities of fixed characteristics may be eligible.
- Government system: The importance of the government system of insurance entities is recognized. The general requirements that the government system must meet to ensure a healthy and prudent management of the activity are established. The specific criteria of each of the fundamental functions that integrate it are also detailed (risk management, compliance verification, internal audit and actuarial function).
- Honorability: the requirements of honorability and aptitude demanded to the partners who have significant participation in the entity (10%) and to those who exercise the effective direction or the fundamental functions that make up the government system are developed.
- Group Supervision: It strengthens and demands close collaboration between the supervisory authorities under whose jurisdiction different entities belonging to the same group operate. This implies the appearance of new figures such as the supervisors' school or the group supervisor.
- Consumer protection: the duty of information to the policyholder is reinforced, especially in relation to the specific regulation in death and health insurance.
- Measures to be taken in situations of financial deterioration: the content of the recovery plan and the short-term financing plan that entities must submit when their eligible own funds are not enough to cover the mandatory solvency capital or the mandatory minimum capital, respectively, are regulated.
Additionally, through the additional and final provisions the mandatory insurance record and modify other standards such as the Social Security Mutual Insurance Regulation, the Extraordinary Risk Insurance Regulation and the Pension Plans and Funds Regulation. In addition, the necessary adaptations are made in the Accounting Plan of the Underwriters
