The fourth final provision of Law 44/2002, of 22 November, of measures to reform the financial system, authorized the government to produce a consolidated text of the law within one year of its entry into force. 30/1995, of 8 November, for the management and supervision of private insurance, and empowered it to regularise, clarify and harmonise the legal texts to be recast.

For its part, the final provision of Law 34/2003 of 4 November, amending and adapting to the Community legislation of the private insurance legislation, provided that the authorization to the Government for the elaboration of a recast text of the Law on the Management and Supervision of Private Insurance, in accordance with the fourth final provision of Law 44/2002 of 22 November, of measures to reform the financial system, including the incorporation of amendments contained in that law, as well as those arising from the provisions of Law 22/2003, 9 of In July, the court established, and established, at the time, that the period of one year fixed in the fourth final provision of Law 44/2002, of 22 November, will be computed from the entry into force of Law 34/2003 of 4 November.

The implementation of the mandate contained in both provisions is due to this real legislative decree approving the recast of the Law on the Management and Supervision of Private Insurance, which it intends to offer to the a systematic and unified text, comprehensive of the rules applicable to the management and supervision of private insurance, regularizing, harmonizing and clarifying, where necessary, the texts that are recast.

The recast text of the Law on the Management and Supervision of Private Insurance maintains the structure and systematic of Law 30/1995, of 8 November, of the ordination and supervision of private insurance.

Your dispositive part is organized into a total of three titles.

The same division in chapters and sections as provided by Law 30/1995, of 8 November, is maintained within each title.

The recast text is completed with the additional, transient, and final provisions.

In its virtue, on the proposal of the Minister of Economy and Finance, in agreement with the Council of State and after deliberation of the Council of Ministers at its meeting on October 29, 2004,

D I S P O N G O:

Single item. Approval of the recast of the Law on the Management and Supervision of Private Insurance.

The recast text of the Private Insurance Planning and Supervision Act is approved, which is inserted below.

Single additional disposition. Regulatory referrals.

The regulatory references made in other provisions of Law No 30/1995 of 8 November 1995 on the management and supervision of private insurance shall be construed as referring to the relevant provisions of the recast text which approves.

Single repeal provision. Repealed rules.

All provisions of equal or lower rank shall be repealed as set out in the recast text of the Law on the Management and Supervision of Private Insurance, which is adopted and in particular:

(a) Law 30/1995 of 8 November of the management and supervision of private insurance, except the following provisions:

1. Paragraph 4 of its fifth additional provision, 'Contributors in the insurance business', whereby certain amendments are made to the additional provision of Law No 3/1994 of 14 April 1994, for which the adapts the Spanish legislation on credit institutions to the Second Banking Coordination Directive and other amendments relating to the financial system are introduced.

2. th Your additional sixth provision, "Amendments to the Insurance Contract Act", as well as the mention of this provision in the final provision of law 30/1995, dated November 8.

3. Its additional seventh provision, "Amendments to the Private Insurance Mediation Act", as well as its consideration of the basis for the management of the insurance contained in the first provision of Law 30/1995, of 8 November.

4. Its additional eighth provision, "Amendments to the Law on the Use and Movement of Motor Vehicles", until the adoption of the recast of the Law on Civil and Safe Liability in the Movement of Motor Vehicles provided for in the first provision of Law No 34/2003 of 4 November of 4 November amending and adapting to Community legislation on private insurance legislation, as well as the particulars referred to in paragraph 2 (a) and (c) thereof, the first provision of Law No 30/1995 of 8 November.

5. th Your additional ninth provision, "Amendments to the Legal Statute of the Insurance Compensation Consortium", until the approval of the recast text of the Legal Statute of the Insurance Compensation Consortium, provided for in the the final provision of Law 34/2003 of 4 November, amending and adapting to the Community rules of private insurance legislation, as well as the reference to this provision in the final provision of Law No 30/1995, of 8 November.

6. th His additional provision, tenth, "Amendments to the Combined Agricultural Insurance Act", as well as the reference to this provision in the final provision of law 30/1995, dated November 8.

7. Paragraph 1 of its additional twelfth provision, whereby certain amendments are made to the 11th additional provision of the recast text of the General Law on Social Security, approved by the Royal Legislative Decree 1/1994 of 20 June, in accordance with the wording of Article 35 of Law 42/1994 of 30 December 1994 on fiscal, administrative and social measures.

8. Its additional 15th provision, "Integration in the Social Security of Collegiates in Professional Colleges".

(b) of Law 44/2002 of 22 November 2002, of measures for the reform of the financial system, Article 9; the first paragraph of Article 11; Article 32; the third paragraph of Article 35; Article 44; its additional sixth provision, and its additional seventh provision.

c) Of Law 22/2003, of July 9, Bankruptcy, its final disposition twenty-seventh.

(d) Law 34/2003 of 4 November amending and adapting to the Community rules of private insurance legislation, its first article and the first and second transitional provisions.

e) Of Law 62/2003, of 30 December, of fiscal, administrative and social order measures, Article 90.

Single end disposition. Entry into force.

This royal legislative decree and the recast text it approves will enter into force on the day following its publication in the "Official State Gazette".

Given in Madrid, 29 October 2004.

JOHN CARLOS R.

The Second Vice President of the Government and Minister of Economy and Finance,

PEDRO SOLBES MIRA

RECAST TEXT OF THE PRIVATE INSURANCE PLANNING AND SUPERVISION ACT

Index

EXPLANATORY STATEMENT

TITLE I

General provisions

Article 1. Object of law and definitions.

Article 2. Subjective scope and principle of reciprocity.

Article 3. Objective and territorial scope.

Article 4. Prohibited operations and penalty of nullity.

TITLE II

From the activity of Spanish insurance entities

CHAPTER I

Access to the insurance activity

Article 5. Need for administrative authorization.

Article 6. Insurance classes.

SECTION 1. LEGAL FORMS OF INSURANCE INSTITUTIONS

Article 7. Nature, form and name of the insurance entities.

Article 8. Close links.

Article 9. Mutual and cooperative at fixed premium.

Article 10. Mutual and cooperative at variable premium.

SECTION 2. REMAINING REQUIREMENTS

Article 11. Social object.

Article 12. Program of activities.

Article 13. Social capital and mutual fund.

Article 14. Partners.

Article 15. Effective management of the insurance entities.

CHAPTER II

Conditions for the exercise of the insurance activity

SECTION 1. FINANCIAL GUARANTEES

Article 16. Technical provisions.

Article 17. Solvency margin.

Article 18. Guarantee fund.

Article 19. Limitation of distribution of surpluses and activities.

SECTION 2. OTHER SPECIFIC REQUIREMENTS

Article 20. Accounting and consolidation duty.

Article 21. Consolidated accounts of the consolidable groups of insurance entities.

Article 22. Arrangements for significant shareholdings.

Article 23. Disposal of portfolio.

Article 24. Transformation, Merge, Split, and Pool.

Article 25. Statutes, policies and fees.

CHAPTER III

Intervention of insurance entities

SECTION 1. REVOCATION OF ADMINISTRATIVE AUTHORITY

Article 26. Causes of the revocation and its effects.

SECTION 2. TERMINATION AND SETTLEMENT OF INSURANCE ENTITIES

Article 27. Dissolution.

Article 28. Settlement of insurance entities.

Article 29. Actions against insurance institutions subject to insolvency proceedings or in liquidation.

Article 30. Consign procedures.

SECTION 3 LIQUIDATION BY THE INSURANCE COMPENSATION CONSORTIUM

Article 31. Performance of the Insurance Compensation Consortium in the liquidation of insurance entities.

Article 32. General settlement rules.

Article 33. Benefits of settlement.

Article 34. Settlement procedure Article 35. Settlement plan.

Article 36. General meeting of creditors.

Article 37. Advance payment of settlement and credit satisfaction expenses.

SECTION 4 SPECIAL CONTROL MEASURES

Article 38. Measures to guarantee the future solvency of insurance institutions.

Article 39. Special control measures.

SECTION 5 RULE OF VIOLATIONS AND SANCTIONS

Article 40. Administrative violations.

Article 41. Administrative penalties.

Article 42. Responsibility of those who are in charge of administration and management.

Article 43. Criteria for the graduation of sanctions.

Article 44. Measures inherent in the imposition of administrative sanctions.

Article 45. Limitation of infringements and penalties.

Article 46. Administrative powers.

Article 47. Additional rules for the exercise of sanctioning powers.

Article 48. Exercise of activities and use of names reserved for insurance companies.

CHAPTER IV

Of the activity under the right of establishment and under the freedom to provide services in the European Economic Area

SECTION 1

Article 49. Authorised insurance entities.

Article 50. Disposal of portfolio.

Article 51. Intervention measures.

Article 52. Duty of information to the Ministry of Economy and Finance.

Article 53. Duty of information to the policyholder.

Article 54. General remission.

SECTION 2. ESTABLISHMENT OF THE RIGHT OF ESTABLISHMENT

Article 55. Establishment of branches.

SECTION 3. FREEDOM TO PROVIDE SERVICES

Article 56. Activities under the freedom to provide services.

CHAPTER V

Reinsurance

Article 57. Reinsurers entities.

Article 58. Retention sessions.

CHAPTER VI

Securing the insured

Article 59. Ranking of credits.

Article 60. Duty of information to the taker.

Article 61. Conflict resolution mechanisms.

Article 62. Administrative protection.

Article 63. Department or customer service. Client defender.

CHAPTER VII

Social Welfare Mutuals

Article 64. Concept and requirements.

Article 65. Scope of coverage and benefits.

Article 66. Extending capabilities.

Article 67. Mutual fund and financial guarantees.

Article 68. Applicable rules.

CHAPTER VIII

Ordering and monitoring competencies

SECTION 1. COMPETENCIES OF THE STATE AND THE AUTONOMOUS COMMUNITIES

Article 69. Distribution of competencies.

SECTION 2. TH COMPETENCIES OF THE GENERAL ADMINISTRATION OF THE STATE

Article 70. Control of the insurance activity.

Article 71. Control of insurance entities.

Article 72. Insurance Inspection.

Article 73. Advisory Board of Insurance and Pension Funds.

Article 74. Administrative records.

SECTION 3 GENERAL RULES

Article 75. Duty of professional secrecy.

Article 76. Insurance in third countries.

Article 77. Duty of cooperation with the Member States of the European Economic Area and obligations of information and reciprocity.

TITLE III

From the activity in Spain of foreign insurance entities

CHAPTER I

Of the activity in Spain of insurance companies domiciled in other Member States of the European Economic Area

SECTION 1

Article 78. Management and supervision of authorised insurance entities.

Article 79. Disposal of portfolio.

Article 80. Intervention measures.

Article 81. Duty of information to the policyholder.

Article 82. Taxes and compulsory membership.

SECTION 2. ESTABLISHMENT OF THE RIGHT OF ESTABLISHMENT

Article 83. Determination of exercise conditions.

Article 84. Inspection of branches by the supervisory authority of origin.

SECTION 3. FREEDOM TO PROVIDE SERVICES

Article 85. Starting and modifying the activity.

Article 86. Representative for tax purposes and in car insurance.

CHAPTER II

Of the activity in Spain of insurance entities domiciled in third countries

Article 87. Establishment of branches.

Article 88. Conditions for the exercise of the insurance activity.

Article 89. Special rules for branch intervention.

Article 90. Special arrangements for Swiss insurance companies.

Additional disposition first. Security of caution in favour of public administrations.

Additional provision second. Currency payable on commitments and risks.

Additional provision third. Contributors to the insurance activity.

Additional provision fourth. Concerts of insurance companies with agencies of the Administration of Social Security.

Additional provision fifth. Validity of the administrative authorisation throughout the European Economic Area.

Additional provision sixth. Amendments required by the adaptation to Law 30/1995 of 8 November of the management and supervision of private insurance.

Additional provision seventh. Insurance entities authorized to operate in life insurance and in insurance other than life insurance.

Additional disposition octave. Insurance entities authorised to operate in part of the risks of the disease class.

Additional provision ninth. Adaptation of social security mutual societies.

Additional provision 10th. Preferred credit coverage.

First transient disposition. Transitional arrangements for the amendments made to measures for the reorganisation and liquidation of insurance institutions, by Law 34/2003 of 4 November, amending and adapting to Community legislation on private insurance.

Second transient disposition. Adaptation of the insurance companies to the new guarantee fund requirements introduced by Law 34/2003 of 4 November, amending and adapting to the Community rules of private insurance legislation.

Transitional provision third. Temporary adequacy of references to Article 10 of Law 47/2003 of 26 November, General Budget.

Final disposition first. Bases for the management of insurance and exclusive competencies of the State.

Final disposition second. Regulatory authority.

EXPLANATORY STATEMENT

I

As already stated in the explanatory memorandum of the Law on the Management of Private Insurance in 1984 and is reiterated in that of the Law on the Management and Supervision of Private Insurance in 1995, the insurance legislation In the case of the private sector, it is an institutional unit which, consisting of rules of private law and public law, has been characterised in this last area by its task of protecting the insured and beneficiaries covered by a contract of insurance.

In fact, that the insurance contract involves changing a present and certain benefit (premium) for another future and uncertain (indemnity), requires ensuring the effectiveness of the compensation when the contract is eventually produced. disaster. It is this public interest that justifies the management and supervision of the insurance companies by the Public Administration to verify that they maintain a sufficient solvency situation to fulfil their social object.

State planning and supervision, which call for market unity and the principles of division and dispersion of risks, takes place through the system of permanent link administrative authorisation, under which the financial, technical and professional requirements for access to the insurance market are examined; financial guarantees and compliance with the insurance and actuarial contract rules are monitored during their performance in the insurance market; and, finally, the measures of intervention on the entities are determined insurance companies which do not adjust their performance to those rules, and may even be able to revoke the administrative authorisation granted or the dissolution of the insurance undertaking when they lack the minimum requirements to maintain the market.

This regulatory framework for the control of solvency and protection of the insured is of general application, and it is adjusted to the almost totality of the free economy states.

Now, in order for the system of management and supervision to be effective, it is necessary to act on real and in-force situations at every moment, so that its legal order must be adapted to the constant changes of every order that The passage of time reveals how necessary.

The Law of 14 May 1908, which began in Spain the ordination of private insurance, was a very effective instrument in the nearly 50 years of life.

Their fundamental bases, which focused on prior control, while guaranteeing, to a certain extent, that there would be no reckless actions by the insurance companies, limited their field of action, with injury to the business initiative.

The following Law of 16 December 1954 did not have a systematic development, so that, in maintaining the same conception of control, without giving it the means and instruments to take the appropriate corrective measures, it has diminished the effectiveness of the management and administrative supervision action. The length of time revealed the separation of this law from the actual market situation, which was never allowed to be shortened, despite the profusion of rules, since the precise definition of the solvency control, as well as the adoption of measures that will streamline the insurance market, giving it greater competitiveness and transparency.

Law 33/1984 of 2 August on the management of private insurance was the ideal instrument for resolving the problems that had arisen under the law of 1954. The Law 33/1984, of 2 August, was based on a double order of principles: the management of the insurance market in general and the control of the insurance companies in particular, with the ultimate aim of protecting the insured. This basic scheme was added to the existence of new needs for risk coverage, innovations in the field of insurance with effect in international areas, the necessary market unit that imposed not only economic reality, but also the also, then, possible accession of Spain to the Economic Community

European with the reception of the regulations in force in the latter. It was possible, precisely, that the effective accession of the European Union in 1986 to the present European Union would require few amendments, which were followed by the Royal Decree-Law 1255/1986 of 6 June amending certain articles of the Law 33/1984 of 2 August to adapt it to the commitments arising from the Treaty of Accession of Spain to the European Economic Community.

Regarding the management of the insurance market in general, Law 33/1984 of 2 August set the following objectives:

(a) Normalize the market, giving all insurers the possibility to participate in the same regime of absolute concurrency and without discriminatory legal treatments. In this sense, it included in its regulation the social welfare mutual societies, in their day covered by the Law of 6 December 1941, in order to subject them to solvency control, as well as the other insurance companies.

b) To encourage the concentration of insurance companies and, consequently, the restructuring of the sector, to give way to more competitive groups and insurers, nationally and internationally, and with lower costs management.

(c) To power the national reinsurance market through which the full national retention period is taken to the fullest extent.

d) To achieve greater specialization of insurance companies, especially in the field of life, in accordance with the requirements of the European Union and international trends in the field.

e) Clarify the regime of legal forms that can be adopted by the insurance companies, ordering the structure of the insufficiently regulated social welfare institutions and giving entry to the insurance cooperatives.

In order to achieve all these ends, and under the terms of Article 149.1.6., 11. and 13. of the Constitution, Law 33/1984, of 2 August, gave the basis for the ordination of insurance, with the necessary scope for the activity to be carried out. The insurance company was developed in compliance with the law of the large numbers and was in keeping with its international perspective. This was demanded at the time of this law-and today it is maintained in its full force-a certain uniformity of the rules governing the management and supervision of the insurance business, in order to facilitate the relationship of insurance companies In this context, the insurance sector is one of the most harmonised of European Community law through the system of directives-and in the European Economic Area-and in the European Economic Area, and in the European Economic Area. all of them with international markets, whose practices it is essential to respect. In addition, given the financial importance of the insurance sector within the national economy and its primarily commercial character, which must be regarded as a market unit, the powers of the autonomous communities must be respected. In the case of the Commission, the Commission has been able to submit to the Council a decision on the implementation of the Treaty on European Union, which will be held in Brussels on 1 March. necessary coordination of the overall planning of the economic activity referred to in the Article 149.1.13. of the Constitution.

As for the second of the aspects, referring to the concrete administrative control of the insurance companies, Law 33/1984, of August 2, was based mainly on the following guidelines:

1. Regulate the conditions of access and exercise of the insurance activity, enhancing the prior financial guarantees of the insurance companies and enshrining the principle of solvency, accentuated and especially projected to its technical and financial aspects.

2. Sanear the sector, avoiding, as far as possible, the insolvency of the insurance companies.

In cases of difficulty for these, take corrective measures that produce the minimum damage to your employees and the insured.

3. The maximum protection of the interests of the insured and beneficiaries covered by insurance, not only through the generic administrative control of the insurance companies, but by the regulation of specific measures In the case of the insurance company, the insurance company is also entitled to the insurance and insurance contracts, and to the insurance and insurance companies, as well as the insurance and insurance companies. measures, including penalties, in cases where the insured and the beneficiaries communicate to the General Directorate of Insurance and Pension Funds the practices of insurance companies that are contrary to the law or that affect their rights.

This basic outline of guiding principles and guidelines, which opened Law 33/1984 of 2 August, remains in the subsequent reforms and its essence was kept alive and in the present day in Law 30/1995, of November 8, for the management and supervision of private insurance. The amendments which it introduced with regard to the regulation of Law No 33/1984, of 2 August, were in line with the double foundation of the European Union's adaptation of directives and the incorporation of the European Economic Area and the convergence line. they had drawn the member countries of both, which demanded that the public management and supervision of the insurance activity be parallel to its dynamics, one of the most advanced of our financial system.

It was, therefore, these two aspects which demanded a new Law on the ordination and supervision of private insurance, which would replace Law 33/1984 of 2 August, since the variety and intensity of the amendments which were They operated necessary and advisable to regulate the matter in a new law.

II

In the specific order of the European Union's adaptation of directives, Law 30/1995 of 8 November, of the management and supervision of private insurance, incorporated into Spanish law, as regards control and the supervision of insurance institutions, the rules contained in the following:

(a) Council Directive 92/96/EEC of 10 November 1992 (Third Life Insurance Directive). Their adaptation to Spanish law meant that the concept of "single administrative authorisation" in life insurance was received. This meant that the Spanish insurance companies could operate in the whole area of the European Economic Area under the right of establishment or under the freedom to provide services subject exclusively to the control of the of the Spanish authorities. The same applies to insurance companies domiciled in any Member State of the European Economic Area, which could operate in the rest of the European Economic Area-and therefore also in Spain-under the right of establishment and in the freedom to provide services subject to the financial control of the State of origin.

(b) Council Directive 92/49/EEC of 18 June 1992 (Third Directive on insurance other than life assurance). It was the same innovation as the previous directive, but referred to direct insurance other than life insurance.

(c) Council Directive 90 /619/EEC of 8 November 1990 (Second Life Insurance Directive). Their introduction into our legal system involved, as far as life insurance is concerned, the collection of the rules of private international law applicable to insurance contracts and the right of the taker to unilaterally settle the contract, and it is necessary to determine the rules applicable to companies dominated by entities subject to the right of a non-Member State of the European Union and to the acquisition of significant holdings by such dominant companies, all in the area of direct life insurance.

(d) Council Directive 91 /674/EEC of 19 December 1991 on the annual accounts and consolidated accounts of insurance undertakings.

Its incorporation into Spanish law clarifies the regulation of the accounting of the insurance companies and admits, without a doubt, the specialty of some regulatory norms of the accounting of such entities required by European Community law.

(e) Directive 95 /26/EC of the European Parliament and of the Council of 26 June 1995 amending, inter alia, Directives 73 /239/EEC and 92 /49/EEC on direct insurance other than life assurance and the Directives 79 /267/EEC and 92 /96/EEC on direct life insurance. This Directive, as far as insurance companies are concerned, introduces the concept of 'close links' as an instrument of management and supervision, requires the registered office and the scope of the duty of professional secrecy and, finally, the obligation of auditors to cooperate with the supervisory authorities.

But Law 30/1995, of 8 November, introduced in respect of Law 33/1984, of 2 August, a second block of normative modifications demanded, not by the adaptation or incorporation of directives of the European Union, but, in greater or less, by the line of convergence which the Member States of the European Economic Area had drawn up. These amendments, which were incorporated into Law 30/1995 of 8 November, basically concern the following matters:

(a) Requirements for the administrative authorisation of Spanish insurance companies and for the acquisition in these of significant holdings.

b) The protection of the insured. The experience gained has enabled the institutions which tend to be protected to be purged, and the protection of third parties in the area of liability insurance has been extended, as both protections are identical to the same basis; the protection mechanisms have been improved, both in the singularly privileged credit referred to in Article 59, and in the adequacy of the dispute settlement mechanisms set out in Article 61, taking into account the new regulation of arbitration; and finally, it was introduced, albeit with a potential Figure of the 'insured person' in his Article 63.

c) The administrative and management procedures. It was considered necessary to establish clearly the regulation to be used for the handling of the various activities and mechanisms of management and supervision that the administration is entrusted with in the law regarding the insurance companies. For these purposes, the basic principle which guided the procedural regulation was that the activities of ordination and supervision should be exercised as quickly as possible, but without forgetting, in no case, the respect of all the guarantees of the insurance entities, and a singular importance was granted to the processing of such entities.

Separate consideration deserves the regimes of revocation of the administrative authorisation, dissolution and liquidation of insurance entities and adoption of special control measures. The aim of all of them is to adapt the causes and the procedure of revocation and dissolution, as well as the regime of liquidation, to the general of commercial societies-taking inspiration from the Law of Companies Anonymous- (i) to take into account those which need to be specialised in the insurance sector itself As far as the administrative dissolution procedure is concerned, it coordinates the guarantees to the insurer itself-through the imposition of the obligation to the administrators, together with the right of the partners, to urge the dissolution- with effective action by the Administration when neither one nor the other has taken place. And as regards the liquidation of the insurance undertaking, it clarifies and specifies the arrangements for management and supervision of the institution in liquidation and its liquidators in particular, and regulates, in the case of administrative liquidation, the performance of the Insurance Compensation Consortium, with a potential interest, also allowing the appointment of other liquidators by the Minister of Economy and Finance.

As regards the special control measures introduced by Law 30/1995 of 8 November, which came to replace the hitherto so-called precautionary measures, those measures are specified and specified and established a correlation between the factual assumptions of their adoption and the measures to be taken, as required by legal certainty and Community directives.

In addition to the basic guidelines outlined above, also Law No 30/1995 of 8 November, it introduced other changes of a very different nature, from which it cannot fail to be highlighted, in the field of (i) supervision, the reference to the amendment of the legal system of social security mutual societies.

III

The two basic aspects of the Law 30/1995 of 8 November 1995, the requirement for the adoption of the new Community legislation in the internal law, as well as the constant evolution of the insurance business and the need for adapt their regulations, they were repeated during their term, which originated after their approval various reforms and modifications. These include, by their scope, those mentioned below.

Law 44/2002, of November 22, of measures of reform of the financial system, introduced several amendments in Law 30/1995, of 8 November.

On the one hand, the need to transpose Community legislation into national law, such as Directive 2000 /26/EC of the European Parliament and of the Council of 16 May 2000 (Fourth Motor Insurance Directive), and the Directive 2000 /64/EC of the European Parliament and of the Council of 7 November 2000 on the exchange of information with third countries. On the other hand, to promote the efficiency of the insurance market, such as the disappearance of the Liquidator Commission of Insurance Entities and the assumption of its functions by the Insurance Compensation Consortium.

In addition, relevant innovations were introduced in relation to the protection of service clients

financial, by establishing the obligation for financial institutions to address customer complaints and complaints, for which they must have a department or customer service; likewise, The Commissioners for the protection of the financial services client, specific organs of defense of the users of financial services, are created and regulated in a common way for the entire financial system. It is also important to highlight the criminalisation of breaches of administrative organisation and internal control deficiencies of insurance institutions, and the updating of penalties for the commission of insurance infringements.

On the other hand, Law 22/2003, of 9 July, Insolvency, has introduced amendments to Law 30/1995, of 8 November, of management and supervision of private insurance, to adapt the wording of some of its precepts to the new regulation on insolvency. This adaptation has also been extended to the Legal Statute of the Insurance Compensation Consortium, which has also been amended by Law 22/2003, dated July 9, Bankruptcy.

This, irrespective of the fact that, in accordance with its second additional provision, in the case of contracts of insurance undertakings, the specialities which are established in their legislation are applied in the case of a specific, except those relating to the insolvency administration. For these purposes, the said additional provision considers special legislation, as far as the insurance companies concerned are concerned, Law 30/1995 of 8 November 1995 for the management and supervision of private insurance (Articles 25 to 28, 35 to 39 and 59), and Law 21/1990 of 19 December, to adapt Spanish law to Directive 88 /357/EEC on the freedom of services in insurance other than life and the updating of private insurance legislation (Article 4).

Recently, Law 34/2003 of 4 November, amending and adapting to the Community legislation of private insurance legislation, has introduced major amendments to the Law 30/1995 of 8 November the need to adapt it to the most recent Community directives adopted in the field of insurance: Directive 2001 /17/EC of the European Parliament and of the Council of 19 March 2001 on the consolidation and settlement of the insurance companies; Directive 2002/13/EC of the European Parliament and of the Council of 5 In March 2002, Council Directive 73 /239/EEC was amended as regards the requirements of the solvency margin of insurance undertakings other than life insurance and, finally, Directive 2002/83/EC of the European Parliament and of the European Parliament and of the Council of the Council of 5 November 2002 on life assurance. This last Directive recasts the Community rules on life assurance, including Directive 2002/12/EC of the European Parliament and of the Council of 5 March 2002 amending Council Directive 79 /267/EEC as regards the the requirements of the solvency margin of life assurance undertakings.

The incorporation into the Spanish legal system of the content of the directive on reorganisation and liquidation resulted in the amendment of the legislation intended to regulate the liquidation of insurance institutions, as well as certain aspects of the special control measures to be taken in respect of such entities, in order to establish coordinated rules for mutual recognition and cooperation at Community level, both for the liquidation as for the reorganisation measures, in order to achieve a proper functioning of the internal market and improve the protection of creditors.

In relation to this last aspect of protection in the case of liquidation of insurance institutions, the express recognition of the credits of the insured, beneficiaries and third parties is of special importance. (a) a loss of absolute priority over all other claims against the insurer in respect of the assets representing the technical provisions.

In the area of solvency control, the amendments introduced by Law 34/2003 of 4 November were aimed at strengthening the guarantees for the insured through the strengthening of the margin requirements. In particular, in respect of the guarantee fund, both in terms of the increase in its amount and the regular and automatic updating of the guarantee fund, as well as the preventive control measures to be taken to ensure solvency. the future of the insurance companies which present difficulties, inter alia.

It should be noted that with these directives on solvency margin, the regulation of a basic element of the supervision of insurance companies, which was introduced in the regulations, was closed in its current conception. Spain, with a general character, by Royal Decree 3051/1982 of 15 October, and enshrined in Law 33/1984 of 2 August, of the organisation of private insurance, and its implementing rules.

The regulation of the solvency margin and the guarantee fund has since constituted an effective element to guarantee and monitor the solvency of institutions, without prejudice to the fact that their current configuration is being subject to a thorough review at Community level to bring more precisely the capital requirements to the risks actually borne by the institutions.

On the other hand, Directive 2002/65/EC of the European Parliament and of the Council of 23 September 2002 on the distance marketing of financial services intended for consumers introduced a change in Council Directive 90 /619/EEC of 8 November 1990 on the coordination of provisions laid down by law, regulation or administrative action relating to direct life insurance (Second Life Insurance Directive). necessary to collect in the internal right.

Together with the reforms introduced by the legal texts cited above, it is worth noting that through various laws, concrete precepts of Law 30/1995, of 8 November, have been modified with a more limited scope. Among them are the laws of fiscal, administrative and social measures that have also introduced amendments to Law 30/1995, of 8 November; thus, Law 13/1996, of December 30, amended Article 13 and the provision of Third, the Law 50/1998 of 30 December amended Articles 29 and 30 and the additional provision 15th; Law 14/2000 of 28 December, amended Articles 62 and 63; Law 24/2001 of 27 December amended the 65; and finally, Law 62/2003, of December 30, created a new article 20a.

The orderly and harmonised reception in a single text of these reforms and modifications constitutes the object of this recast text, in compliance with the legal mandate for its elaboration.

TITLE I

General provisions

Article 1. Object of law and definitions.

1. This law aims to establish the management and supervision of private insurance and other operations

listed in Article 3.1, in order to protect the rights of policyholders, to facilitate the transparency and development of the insurance market and to promote private insurance activity.

2. The general scheme and special schemes which make up the compulsory social security system are expressly excluded from the scope of this law.

3. For the purposes of this law and the other provisions governing the management and supervision of insurance and the procurement of private insurance, the following definitions shall

:

(a) Commitment: any agreement materialised in one of the forms of life insurance contract, other operations of the life class or operations described in Article 3.1.b) and c).

(b) Establishment of the right of establishment: the activity developed in a Member State of the European Economic Area by a branch established in that of an insurance institution domiciled in another Member State.

(c) 'freedom to provide services' means the activity carried out by an insurance undertaking domiciled in a Member State of the European Economic Area from its place of residence, or by a branch of that State in another Member State; assuming a risk or contracting a commitment in a different Member State.

d) Member State of location of risk: this is understood as:

1. The one in which the goods are found, when the insurance relates to real estate, or to the real estate and its contents, if the latter is covered by the same insurance policy.

Where insurance relates to movable property located in a building, and for the purposes of legally enforceable taxes and surcharges, the Member State in which the property is situated, even if it and its contents are not are covered by the same insurance policy, with the exception of goods in commercial transit.

2. The Member State of registration, where insurance relates to vehicles of any kind.

3. The person in whom the policyholder has signed the contract, if the duration of the contract is less than or equal to four months, and relates to risks that arise during a trip or out of the usual domicile of the policyholder, whatever the affected branch is.

4. The person in whom the policyholder has his habitual residence or, if he is a legal person, the person in which his registered office or branch is located, in all cases not explicitly referred to in the preceding paragraphs.

(e) Member State of the undertaking: the Member State of the European Economic Area in which the policyholder has his habitual residence, if he is a natural person, or his registered office or a branch, in the event of the The contract relates to the latter, if it is a legal person. In all cases, in the case of a life insurance contract, other operations of the life class or operations described in Article 3.1.b) and c).

(f) Member State of origin shall mean the Member State of the European Economic Area in which the insurance undertaking covering the risk is registered or entered into the undertaking.

The management and management of the business of the insurance undertaking shall be centralised in the same Member State where its registered office is located, competent to grant the authorisation. administrative.

g) Member State of the branch: the Member State in which the branch is situated which covers the risk or contracts the undertaking.

(h) Member State of provision of services: the Member State of the European Economic Area where the risk is located or the commitment is assumed, where such risk is covered or the undertaking is assumed by any entity insurer from his or her home or a branch of that located in another Member State.

Article 2. Subjective scope and principle of reciprocity.

1. They are subject to the provisions of this law:

(a) Entities performing the operations or activities referred to in Article 3.1.

(b) Natural or legal persons who, under any title, are charged with the management or direction of the insurance institutions; the professionals and entities who subscribe to the documents provided for in this law or in their additional development provisions; liquidators of insurance entities; and persons for whom a prohibition or mandate is legally established in relation to the objective scope of this law.

(c) Organisations incorporated as a stay for the distribution of the risk cover or the provision to insurance entities of common services related to the insurance business, is its nature and legal form.

2. By virtue of the principle of reciprocity:

(a) Where in fact or in third countries outside the European Economic Area, the Spanish entities or natural persons, as referred to in paragraph 1, are required to have greater guarantees or requirements than to their nationals, or recognise lower rights, the Minister for Economic Affairs and Finance shall, on the basis of reciprocity, establish other equivalent conditions in terms of, or in terms of, their effects on the national entities or natural persons of the country concerned.

(b) The Directorate-General for Insurance and Pension Funds shall cooperate with the supervisory authorities of third countries outside the European Economic Area, provided that there is reciprocity and those authorities are subject to the professional secrecy under conditions which, at least, are comparable to those established by the Spanish laws.

(c) In the case of insurance institutions, the provisions of subparagraph (a) shall apply only to branches of third countries not members of the European Economic Area.

Article 3. Objective and territorial scope.

1. They are subject to the provisions of this Law:

(a) The activities of direct life insurance, of direct insurance other than life insurance and reinsurance.

(b) Capitalization operations based on actuarial techniques that consist of obtaining specific commitments as to their duration and their amount in exchange for single or previously fixed disbursements.

c) Preparatory operations or

complementary to those of insurance or capitalization that insurance entities practice in their channelling function of savings and investment.

d) Damage prevention activities linked to the insurance activity.

2. The activities and operations defined in paragraph 1 shall comply with the provisions of this law:

a) When they are performed by entities

Spanish insurers.

(b) Where they are carried out in Spain by insurance companies domiciled in the territory of any of the other Member States of the European Economic Area or in third countries.

Article 4. Prohibited operations and penalty of nullity.

1. Insurers shall be prohibited, and their performance shall determine their full nullity, the following operations:

(a) Those without actuarial technical basis.

(b) The exercise of any other commercial activity and the provision of guarantees other than those of the insurance business.

Not included in such a prohibition shall be collaboration with non-insurance entities for the distribution of the services produced by them.

(c) Private insurance mediation activities as defined in Law 9/1992, of 30 April, of mediation in private insurance.

2. Insurance contracts and other operations subject to this law concluded or carried out by an unauthorised entity, the administrative authorisation of which has been revoked, or which transgress the limits of the authorisation, shall be null and void. Administrative Any person who has contracted with it shall not be obliged to fulfil his obligation to pay the premium and shall be entitled to the refund of the premium paid, unless a claim has taken place before a claim has taken place; If the contract has been valid, the obligation of the entity which would have concluded it to satisfy an indemnity whose amount shall be fixed in accordance with the rules governing the payment of the benefit under the contract shall be incurred. of insurance, without prejudice to the duty to indemnify the remaining damages cause.

This obligation and liability shall be in solidarity with the entity and those who are in the same management or management positions as authorized or permitted to hold such contracts or operations.

TITLE II

From the activity of Spanish insurance entities

CHAPTER I

Access to the insurance activity

Article 5. Need for administrative authorization.

1. Access to the activities defined in Article 3.1 by Spanish insurance institutions shall be subject to the prior authorisation of the Minister for Economic Affairs and Finance.

2. The following requirements will be required to obtain and retain the administrative authority:

(a) Adopt one of the legal forms provided for in Article 7 and, where appropriate, provide information on the existence of close links with other persons or entities.

b) Limit its social object to the insurance activity and operations defined in Article 3.1 of this law, excluding any other commercial activity, in the terms of Articles 4 and 11.

(c) Submit and abide by a programme of activities in accordance with Article 12.

(d) Have the social capital or mutual fund required by Article 13 and the guarantee fund provided for in Article 18. Until the granting of the authorization, the social capital or mutual fund disbursed shall be kept in the assets that are regulated, among which are eligible for coverage of technical provisions.

e) To indicate the contributions and participations in the social capital or mutual fund of the partners, who shall meet the requirements set out in Article 14.

(f) Be effectively directed by persons who fulfil the necessary conditions of good repute and professional qualifications or experience.

g) If the entity intends to cover the risks of the civil liability class in motor vehicles, excluding the liability of the carrier, it shall communicate the name and address of the designated representative in each of the States of the European Economic Area other than Spain, which is responsible for the processing and settlement of claims which have occurred in a State other than the State of residence of the injured party or in a signatory country of the certificate system international car insurance (green card).

(h) Insurance companies which intend to operate in the legal defence branch shall have to opt for one of the following management arrangements:

1. To entrust the management of the claims of the legal defense branch to a legally distinct entity, which must be mentioned in the contract. If that institution is linked to another undertaking which has a business other than life insurance, the members of the staff of the first person dealing with the management of claims or the legal advice relating to such management shall not be entitled to simultaneously exercise the same or similar activity in the second. Also, persons who perform management positions of both entities may not be common.

2. Guarantee in the insurance contract that no member of staff dealing with the management of legal advice relating to such management exercises a similar activity in another class if the insurance undertaking operates in several or for another entity operating in a class other than life and having with the legal defence insurer financial, commercial or administrative links irrespective of whether or not it specialises in such a class.

3. Preview in the contract the right of the insured to entrust the defense of his interests, from the moment he has the right to claim the intervention of the insurer as provided in the policy, to a lawyer of his choice.

The three management procedures are without prejudice to the fact that the insured person, when affected by any proceedings, makes cash the right conferred on him by Article 76,d of Law 50/1980 of 8 October, insurance contract.

3. Administrative authorisation shall also be required for an insurance undertaking to extend its business to other classes other than those authorised and for the extension of an authorisation comprising only a part of the risks included in a (a) a class of insurance companies or a group of insurance companies, or a group of companies, which are not included in the contract; The extension of the administrative authorisation shall be subject to compliance with the following requirements by the insurance undertaking:

(a) Have their technical provisions covered and have the solvency margin provided for in Article 17 and, in addition, if for the classes to which the extension of activity applies, Article 13 and Article 18 require a capital (i) a social or mutual fund and a minimum guarantee fund which is higher than the previous ones, must be available to them.

b) Submit a program of activities in accordance with Article 12.

4. The application for authorisation shall be submitted to the Directorate-General for Insurance and Pension Funds and shall be accompanied by the supporting documents relating to the fulfilment of the requirements referred to in paragraphs 2 or 3. Such a request shall be settled within six months of the date of submission of the application for authorisation.

In no case shall an insurance institution be deemed to be authorised under alleged acts for the duration of the period referred to.

5. The authorisation shall be valid throughout the European Economic Area. It shall be granted by the Minister for Economic Affairs and Finance by classes, and shall cover the full range and cover of the ancillary or ancillary risks, as appropriate, included in another class, and shall enable the insurance undertaking to carry out European Economic Area activities under the right of establishment or under the freedom to provide services, unless the applicant wishes only to cover part of the risks associated with the authorised branch, to carry out his activities in a territory which is smaller than that of the national territory, or carries out operations within the territory of Article 49.2.

6. The application for authorization shall be denied when:

(a) The entity does not adopt one of the legal forms provided for in Article 7, its statutes do not conform to this law or it lacks any of the other legal requirements for the valid and effective constitution in the form chosen.

(b) Exist close links to those referred to in Article 8 of this law which impede the proper exercise of management and supervision, or are hindered by the provisions of a third country which regulate one or more of persons with whom the insurer has close links.

c) Your social object does not conform to the provisions of paragraph 2.b) of this article.

d) Do not present a programme of activities or the presentation does not contain all the indications or justifications required pursuant to Article 12, or even containing them, are insufficient or inadequate to the object or purpose intended by the institution or, even if it is presented, does not correspond to the actual situation of the institution, so that it lacks a good administrative and accounting organisation, or adequate internal control procedures or the means intended to cover the financial, financial, solvency or, where appropriate, the provision of assistance to ensure the sound and prudent management of the institution.

e) Lack of the required minimum social capital or mutual fund.

(f) Do not require social contributions or the suitability of the partners to have a significant participation, as defined in Article 14, as defined in Article 14, in the light of the need to ensure management, is not considered appropriate. sound and prudent of the entity.

g) Those who are to lead effectively do not meet the necessary conditions of good repute or professional qualifications or experience.

7. The authorisation shall determine the entry in the register referred to in Article 74 and allow the insurance undertakings to carry out operations only in the classes for which they have been authorised and, where appropriate, in the case of ancillary risks. or complementary to those, as appropriate, and shall adjust their performance arrangements to the programme of activities, statutes and other requirements determining the granting of the authorisation.

The authorisation of the coverage of only part of the risks associated with a class shall be adjusted to the provisions of the regulations.

8. The creation by Spanish insurance companies of foreign-dominated companies, the acquisition of the dominant position in foreign companies, the establishment of branches and, where appropriate, the activity under the freedom to provide services Services in non-member countries of the European Economic Area will require communication from the Directorate-General for Insurance and Pension Funds, one month in advance. The establishment of branches and the activity under freedom to provide services in the territory of other Member States of the European Economic Area shall be in accordance with the provisions of Sections 2 and 3 of Chapter IV of this Title.

9. No prior administrative authorization shall be required for organizations, whether or not they have legal personality, which are believed to remain for the distribution of the risk coverage between insurance institutions or for the provision of common services related to their business, as well as the groupings of insurance entities referred to in Article 24 (5), but in one and another case they shall communicate it to the Directorate-General for Insurance and Pension Funds with a one-month advance to the initiation of the organized or grouped activity.

The Directorate-General may suspend the activities referred to in this paragraph or require amendments thereto, when it appreciates that they do not comply with the regulatory provisions governing the management and supervision of the activity. insurance or insurance contract rules.

Article 6. Insurance classes.

1. In the case of direct insurance other than life insurance, the classification of risks by classes, as well as the name of the authorisation granted simultaneously for several classes and, finally, the concept of ancillary risks, will be adjusted to next:

a) Classification of risks by classes.

1. Accidents.

The benefits in this class may be: flat-rate, compensation, mixed of both and cover of vehicle occupants.

2. Disease (including healthcare).

The benefits in this class may be: flat-rate, repair and mixed of both.

3. Ground vehicles (non-rail).

Includes any damage suffered by land vehicles, whether or not they are automobiles, except for railroads.

4. Railway vehicles.

5. Air vehicles.

6. Maritime, lake and river vehicles.

7. Goods transported (including luggage and other goods carried).

8. Fire and natural elements.

Includes all damage suffered by property (other than those covered in classes 3, 4, 5, 6 and 7) caused by fire, explosion, storm, natural elements

different from the storm, nuclear power and ground subsidence.

9. Other damage to property.

Includes any damage suffered by the goods (other than those covered by classes 3, 4, 5, 6 and 7) caused by hail or frost, as well as by theft or other events other than those included in class 8.

10. Civil liability in motor vehicles (including carrier liability).

11. Civil liability in air vehicles (including carrier liability).

12. Civil liability in maritime, lake and river vehicles (including the civil liability of the carrier).

13. Civil liability in general.

Comprises all responsibility other than those mentioned in the classes 10, 11 and 12.

14. Credit.

Comprises general insolvency, installment sale, export credit, mortgage credit and agricultural credit.

15. Caution (direct and indirect).

16. Miscellaneous pecuniary losses.

Includes employment risks, insufficient income (in general), bad weather, loss of benefits, temporary deprivation of driving licence, persistence of overheads, unforeseen commercial expenses, loss of the venal value, loss of rent or income, indirect commercial losses other than those mentioned above, non-commercial pecuniary losses and other pecuniary losses.

17. Legal defence.

18. Assistance.

Assistance to persons who are in difficulty during displacements or absences from their home or from their permanent place of residence.

It shall also include assistance to persons who are in difficulties in different circumstances, as determined by regulation, provided that they are not covered by other insurance classes.

19. Deaths.

Includes insurance operations that guarantee only benefits in the event of death, where these benefits are met in kind or where their amount does not exceed the average value of funeral expenses for a death.

The risks included in a class may not be classified in another class, without prejudice to the provisions of paragraph C.

(b) Name of the authorisation granted simultaneously for several classes. When the authorization refers simultaneously:

1. To classes 1 and 2, the name "Accidents and disease" shall be given.

2. The term "Car Insurance" shall be given to the cover of vehicle occupants of class 1 and classes 3, 7 and 10.

3. The term "Maritime and transport insurance"

be given to the cover of vehicle occupants in class 1 and to classes 4, 6, 7 and 12.

4. The term "Aviation Insurance" shall be given under the name "Aviation Insurance". The name "Aviation Insurance" shall be given to the cover of occupants of class 1 vehicles and classes 5, 7 and 11.

5. To classes 8 and 9, the name "Fire and other damage to property" shall be given.

6. To classes 10, 11, 12 and 13, the name "Civil liability" shall be given.

7. To classes 14 and 15, it will be given with the

name "Credit and caution".

8. To all classes, the name "General insurance" will be given.

c) Accessories hazards.

The insurance undertaking which obtains an authorisation for a principal risk belonging to a class or group of classes may also cover the risks included in another class without the need to obtain authorisation for such risks. risks, where they are linked to the main risk, relate to the object covered by the main risk and are covered by the contract covering the main risk, provided that for the authorisation in the class to which the risk belongs (a) no further financial guarantees are required prior to the principal, except, as regards the latter requirement, that the ancillary risk is that of civil liability, the coverage of which does not exceed the limits to be determined.

However, the risks included in classes 14, 15 and 17 may not be considered ancillary to other classes, except for class 17 (legal defence), which, where the conditions laid down in the preceding paragraph are met, may be considered as an ancillary risk to class 18 if the main risk concerns only the assistance provided to persons in difficulty on the occasion of travel or absence from the place of permanent residence or place of residence, and as a risk Class 6 accessory when it relates to disputes or risks arising from the use of maritime vessels or related to such use.

2. Direct life insurance shall be included in a single class, the life class, with the scope of all the classes of direct life insurance listed in the Community directives governing the activity of direct life insurance.

A. Scope of the business class.

The branch of life will comprise:

(a) Life insurance, both for death and for survival, or both together, including for the survival of income insurance; insurance on life with insurance; insurance for "marriage"; and the "birth rate" insurance. It also includes any of these insurance when linked to investment funds.

b) The capitalization operations of Article 3.1.b) of this law.

c) The management of collective retirement and management of tontin operations.

the following definitions shall apply:

1. º retirement collective fund management operations those that assume for the insurance institution to manage the investments and, in particular, the assets representative of the reserves of the entities they grant benefits in the event of death, in the event of life or in the event of cessation or reduction of activities. Such transactions shall also be included where they bear a guarantee of insurance, whether on the conservation of the capital, on the perception of a minimum interest. The management of pension funds, governed by the recast of the Law on the regulation of pension plans and funds, approved by the Royal Legislative Decree 1/2002 of 29 November, will be

.

reserved for pension fund management entities.

2. Tone operations, those that carry with them the formation of associations that gather participants to capitalize in common their contributions and to distribute the asset thus constituted among the survivors or between their heirs.

B. Complementary risks.

Entities authorised to operate in the life class may cover as additional risks those covered by the accident and disease class, provided that the following conditions are met:

a) That are linked to the main risk and are complementary to it.

b) That refer to the object covered against the main risk.

c) That they are guaranteed in the same contract with this one.

(d) Where the supplementary branch is the disease, which does not include health care benefits.

SECTION 1. LEGAL FORMS OF INSURANCE INSTITUTIONS

Article 7. Nature, form and name of the insurance entities.

1. The insurance activity may be carried out only by private entities that adopt the form of public limited liability company, mutual, cooperative, and social welfare insurance. Mutual societies, cooperatives and social security mutual societies may operate at a fixed premium or at variable premium.

2. Institutions which adopt any form of public law may also carry out the insurance business, provided that they are intended to carry out insurance operations under conditions equivalent to those of the insurance companies private.

The entities referred to in the preceding paragraph shall be in full accordance with this law and shall also be subject, in the course of their insurance business, to Law 50/1980 of 8 October of the insurance contract, and to the jurisdiction of the courts of civil order.

3. The insurance institutions shall be constituted by public deed, which must be entered in the Register. With such registration, the legal personality shall be acquired by public limited liability companies, mutual insurance companies and social security mutual societies.

4. The application for administrative authorisation as referred to in Article 5 may be submitted only after the acquisition of legal personality.

5. The term 'insurance' or 'reinsurance' shall be included in the social name of the insurance institutions, or both at the same time, in accordance with its social object, which are reserved exclusively for those entities. Also mutual, cooperative and social security mutual societies shall record their nature in the name and indicate whether they are 'at fixed premium' or 'at variable premium'.

Article 8. Close links.

1. For the purposes of this law, any relationship between two or more natural or legal persons is understood to be a close link if they are linked through a participation or through a control link.

It is participation, for these purposes, to hold, directly or indirectly, 20 percent or more of the voting rights or capital of an insurance institution; and it is the link of control that exists between a company dominant and one dominated in all cases referred to in Article 42.1 and 2 of the Trade Code.

Also, a close link between two or more natural or legal persons between whom an insurance institution is located shall be understood to be the situation in which such persons are permanently linked to a same natural or legal person for a control link.

2. Close links between the insurance undertaking and other natural or legal persons, if they exist, shall not impede the proper exercise of the organisation and supervision of the insurance undertaking. The provisions of a third country outside the European Economic Area which regulate one or more of the persons with whom the insurance undertaking maintains close links or the application of those provisions shall also not impede the good exercise of the management and supervision of the insurance undertaking.

3. The conditions imposed by paragraph 2 are permanent in the course of the financial year. And, for these purposes, the insurance institutions shall provide the Directorate-General for Insurance and Pension Funds with the necessary information to ensure compliance.

Article 9. Mutual and cooperative at fixed premium.

1. A fixed premium is a non-profit private insurance undertaking which is covered by the cover of its members, natural or legal persons, of the risks insured by a fixed premium payable at the beginning of the period of the risk.

2. The following rules shall apply to the mutual premium:

(a) The lack of profit-making and each of them count, at least, with 50 mutualists.

b) The condition of mutualist shall be inseparable from that of the policyholder or policyholder. In no case shall the entities from which the reinsurance accepted by the mutual insurance companies acquire a status of mutualists.

(c) Mutualists who have made contributions to constitute the mutual fund may receive interest not exceeding the legal interest of the money, and may only obtain the reimbursement of the amounts provided in the referred to in paragraph (f) of this paragraph or when the general assembly agrees to be replaced with surplus of the financial years.

(d) The mutualists shall not be liable for social debts unless the statutes establish such liability; in such a case, the latter shall be limited to an amount equal to that of the premium which they pay annually, and shall be highlighted in the insurance policies.

e) The results of each financial year shall give rise to the corresponding active spill or return which, as soon as the premiums are not consumed, shall not be considered as the return on capital for the mutualists; or its case, passive, which shall be individualized and made effective in the following financial year; or shall be transferred to the accounts of the relevant financial year.

(f) Where a mutualist causes a loss in the mutual fund, it shall be entitled to the recovery of the active duties and the obligation to pay the agreed and unsatisfied liabilities; it shall also be entitled to the following, after the approval of the accounts for the financial year where the discharge occurs, the amounts which it has contributed to the mutual fund shall be returned to it, unless they have been consumed in compliance with their specific function, and always with deduction of the amounts due to them.

the entity. No other liquidation shall be carried out in favour of the social estate in favour of the mutualist which causes a loss.

g) In the event of the dissolution of the mutual, the mutualists who integrate it at the time the dissolution is agreed will participate in the distribution of the estate and those who, not belonging to it at the time, would have been in the previous period laid down in the statutes; all without prejudice to the right of the members to the mutual fund.

3. In the regulation implementing this law, the rights and obligations of the mutualists will be regulated, without the possibility of establishing privileges in favor of any person; the former time of belonging to the entity to be entitled to the participation in the distribution of the assets in the event of dissolution; the governing bodies, which must have democratic functioning, management and control; the minimum content of the social statutes, and the other extremes relating to the scheme legal status of these entities.

4. The fixed premium cooperatives shall be governed by the following provisions:

(a) The rules laid down in paragraphs (a), (b), (c), (d), (e) and (f) of paragraph 2 of this Article shall apply to them, but the references to mutual, mutual, mutual fund and derbranches shall be construed as made to cooperatives, cooperatives, social capital and cooperative return.

(b) Registration in the Register of Cooperatives shall take place prior to the application for administrative authorisation as referred to in Article 5.

(c) In other words, they shall be governed by the provisions of this law and by the precepts of the recast text of the Law of Companies, approved by the Royal Decree of Law 1564/1989 of 22 December 1989, to which it refers, as well as by the regulatory provisions that develop it and, in an additional way, by the legislation of cooperatives.

Article 10. Mutual and cooperative at variable premium.

1. Each variable premium is a non-profit private insurance undertaking founded on the principle of mutual aid, which covers, on a common account, its members, natural or legal persons, of the risks insured. by the recovery of claims after the claims, and the liability of which is joint, proportional to the amount of the respective capital insured in the institution itself and limited to that amount.

2. In addition to the rules laid down in Article 9 (2) (a), (b), (c), (e), (f) and (g) and those contained in paragraph 3 of the same Article, the following shall apply:

(a) They shall require the input of an entry fee to acquire the status of a mutualist and shall constitute a wiggle fund that allows claims and expenses to be paid without waiting for the recovery of the branches.

(b) Administrators shall not receive any remuneration for their management and the production of insurance shall be direct, without mediation, and without any remuneration.

3. The risks they ensure must be

qualitative and quantitatively homogeneous, and the insured capital and administrative expenditure may not exceed the limits to be determined by regulation.

Such mutuals may operate only in a class of insurance other than direct life insurance, except those of caution, credit and all those in which the risk of civil liability is covered. However, they may operate in civil liability insurance as an accessory to the "fire and natural elements" class, always within the limits of the value of the insured property.

They may yield reinsurance operations, but they will not be able to accept them in any case.

4. They shall carry out their activities and locate their risks in a territorial area which is the least of the following two: two million inhabitants or a province, except in the case of sickness or death benefits persons joined by a professional link.

5. The variable premium cooperatives shall be governed by the following provisions:

(a) The rules contained in the preceding paragraphs of this Article shall apply to them, but the contribution of the entry fee referred to in paragraph 2 (a) shall be made as a constituent of the share capital; and the references in those paragraphs to mutual, mutual and mutual funds shall be construed as references to cooperatives, cooperatives and social capital.

(b) Registration in the Register of Cooperatives shall take place prior to the application for administrative authorisation as referred to in Article 5.

(c) In other words, they shall be governed by the provisions of this law and by the precepts of the recast text of the Law of Companies, approved by the Royal Decree of Law 1564/1989 of 22 December 1989, to which it refers, as well as by the regulatory provisions that develop it and, in an additional way, by the legislation of cooperatives.

SECTION 2. REMAINING REQUIREMENTS

Article 11. Social object.

1. The social object of the insurance institutions shall be exclusively the practice of insurance and other operations as defined in Article 3.1, as well as those permitted by Article 4 in the terms expressed therein.

2. The social object of the insurance companies which intend to operate in any form of the class of life shall be solely the carrying out of operations of that class and the coverage of supplementary risks in the field of life. In addition, after obtaining the relevant administrative authorisation, they may carry out operations in the fields of accidents and sickness, without, in this case, subject to the limitations and requirements of the risk cover. complementary.

The social object of the insurance institutions which intend to operate in any of the classes of direct insurance other than life insurance shall not be able to understand the performance of the operations of the class of life. However, if they are only authorised for the risks included in the classes of accidents and disease, they may operate in the life field if they obtain the relevant administrative authorisation.

Article 12. Program of activities.

1. The programme of activities shall contain indications or justifications for at least the nature of the risks or commitments which the insurance undertaking intends to cover; the guiding principles and the geographical scope of its action; the structure of the organisation, including the marketing systems; the means to cover the economic, financial and solvency requirements and to assist in the undertaking, where appropriate, of the undertaking. In addition, it will contain the justification for the forecasts it raises and the adequacy to these of the resources and resources

available. The requirements contained in this provision may be developed in accordance with each of the insurance classes.

In addition, for the first three social exercises, in the case of life insurance, it must contain a plan in which the estimates of revenue and expenditure are indicated in detail, both for direct operations and for (a) the amount of the amount of the amount of the total cost of the total expenditure incurred by the Member State in which the expenditure is incurred, and, in the case of insurance other than life insurance, the provisions relating to management costs other than installation costs, in particular current general expenditure and commissions, and forecasts for premiums or quotas and claims.

And, in both cases, the forecasts concerning the financial means for the coverage of the commitments and the solvency margin and, finally, the likely cash position.

2. The Directorate-General for Insurance and Pension Funds shall check the technical means available to the insurance institutions which intend to operate in the sickness field, providing health care benefits, in order to carry out the operations which have been committed to carry out and request from the health authorities a report on the adequacy of the means and the intended operation of the media to the benefits it intends to provide and to the health legislation corresponding.

The Ministry of Economy and Finance and the health authorities will establish the necessary coordination to comply with this precept.

Article 13. Social capital and mutual fund.

1. Public limited liability companies and insurance cooperatives shall have the following minimum social capital when they intend to operate in the classes listed below:

a) 9,015,181,57 euros in the classes of life, caution, credit, any of those that cover the risk of civil liability and exclusively reinsurer activity.

(b) EUR 2,103,542,37 in the classes of accidents, sickness, legal defence, assistance and death.

In the case of insurance companies that only practice sickness insurance by providing health care benefits and limit their activity to a territorial area with less than two million inhabitants, it will be sufficient half of the capital or mutual fund provided for in the preceding paragraph.

c) 3.005.060.52 euros, in the remaining ones.

The minimum social capital will be fully subscribed and disbursed at least 50 percent. Capital disbursements above the minimum shall be in accordance with general commercial law. In any event, the capital shall be represented by nominative securities or notes.

2. The fixed-premium mutual funds shall provide proof of permanent mutual funds, provided by their mutual funds or made up of surpluses from the social exercises, the minimum amounts of which, according to the classes in which they are intended to operate, shall be those specified in the the previous paragraph as the paid-up capital of the public limited liability companies. However, for the mutual benefit of a passive spill-over scheme provided for in Article 9 (2) (e), three-quarters of that amount shall be required.

3. The variable premium insurance cooperatives shall credit a registered and fully paid-up share capital of EUR 300,506,05, and the mutuals at variable premium shall credit a permanent mutual fund whose minimum amount shall be 30,050,61 euro.

4. The social security mutual funds shall establish a permanent mutual fund, the minimum amount of which shall be as set out in Article 67.

5. Institutions carrying out their business in several direct insurance classes other than life insurance shall have the capital or mutual fund corresponding to the class for which the largest amount is required.

If, in accordance with Article 11 (2) or Article 11 (3), the capital or mutual fund is also an activity in the life field, it shall be the sum of those required for the class of life and for one of the classes. different to the life of those who operate.

Article 14. Partners.

The natural or legal persons who, directly or indirectly, participate in the establishment of the insurance undertaking by means of a significant participation in it, must be suitable for the management of that entity to be sound and prudent.

Among other factors, suitability or non-suitability will be appreciated based on:

a) Partners ' good repute and professional qualifications or experience.

(b) The heritage resources that these partners have to meet the commitments they have made.

c) The lack of transparency in the structure of the group to which the entity may eventually belong, or the existence of serious difficulties in obtaining the necessary information on the development of its activities.

(d) The possibility of the institution being inappropriately exposed to the risk of non-financial activities of its promoters; or where, in the case of financial activities, the institution's stability or control may be be affected by the high risk of those.

Article 15. Effective management of the insurance entities.

1. Those who, under any title, carry the effective management of the insurance undertaking shall be natural persons of recognised good repute and with the necessary conditions of professional qualification or experience and shall be registered in the Register (a) the administrative authorities of the insurance companies referred to in Article 74

In any event, it is understood that the effective management of the management or management positions, considering those referred to in paragraph (a) of Article 40.1, is deemed to be effective. Legal persons may be charged with administration, but in this case they shall designate a natural person who meets the above requirements in their representation.

2. Honorability must refer to the commercial and professional scope, and concurs in those who have been observing a personal trajectory of respect for the commercial laws and the others that regulate the economic activity and the life of the business, thus as well as good business, financial and insurance practices.

It is presumed that they have professional qualifications who have obtained a bachelor's degree degree in legal, economic, actuarial and financial sciences, administration and management of companies or in (a) specific private insurance matters, and have professional experience to perform their duties who have performed, for a period of not less than five years, functions of senior management, management, control or advisory financial management and supervision of solvency by the administration public, or similar responsibilities in other public or private entities of dimensions

and requirements analogous to those of the entity that you intend to create.

3. In no case shall they be able to carry out the effective management of insurance undertakings:

(a) Those with a criminal record for crimes of falsehood, violation of secrets, discovery and disclosure of secrets, against public finances and against social security, embezzlement of public funds, and any other offences against property; those disabled for public office or administration or management in financial institutions, insurers or insurance brokers; those disabled under Law 22/2003 of 9 July, until the period of disablement fixed in the judgment of the qualification of the competition; and, in general, the incourses in incapacity or prohibition under the legislation in force.

b) Those that, as a consequence of an

sanctioning procedure or by virtue of a special control measure, they would have been suspended in the exercise of the position or separated from it, or suspended in the exercise of the activity, in the terms of Article 39.2 (d) of the this law or Articles 25.2 and 27 of Law 9/1992, of 30 April, of mediation in private insurance, during the enforcement of the sanction or until the measure of special control is left without effect.

CHAPTER II

Conditions for the exercise of the insurance activity

SECTION 1. FINANCIAL GUARANTEES

Article 16. Technical provisions.

1. Insurance institutions shall be obliged to constitute and maintain at all times sufficient technical provisions for all their activities.

For these purposes, they shall be adequately calculated, accounted for and invested in assets eligible for coverage.

These are technical provisions for unconsumed premiums, ongoing risks, life insurance, the participation of insured persons in benefits, benefits, stabilisation and those other than, in accordance with the the development of this law, are necessary for the purpose of fulfilling the purpose referred to in the preceding paragraph.

2. The amount of such provisions shall be determined on the basis of prudent and reasonable assumptions.

The methods and procedures for calculating the technical provisions and the amount of the technical provisions to be covered by the insurance undertaking shall be fixed.

3. The assets representative of the technical provisions shall take into account the type of transactions carried out by the insurance undertaking to ensure the security, performance and liquidity of the institution's investments, with an appropriate diversified distribution of such investments.

4. In life insurance, the insurance undertaking must have at the disposal of those who are interested the bases and methods used for the calculation of the technical provisions, including the provision for the participation of the insured persons in the benefits.

5. The assets eligible for the coverage of the technical provisions shall be determined, the maximum percentages of those assets which may be invested in each type of these assets, the other conditions to be met by such investments. as the criteria for valuation of these and the rules and limits for compliance with the principle of monetary congruence.

Article 17. Solvency margin.

1. Insurance institutions shall have at all times a sufficient solvency margin for all their activities.

2. The solvency margin shall be constituted by the equity of the insurance undertaking free of any foreseeable commitment and deduction of intangible assets.

3. The consolidable groups of insurance institutions shall at all times, as a solvency margin, have a consolidated non-committal estate, which shall be subject to the provisions of Article 20 (2), sufficient to cover the sum of the assets. of the legal solvency requirements applicable to each of the entities in the group

If they are part of the group of other entities, specific requirements for the sufficiency of consolidated own resources may be established.

4. Compliance by the group with the provisions of the previous paragraph shall not exempt financial institutions which are part of the group from fulfilling individual or subconsolidated own resources requirements. To this end, such entities shall be individually supervised by the relevant public body or body in accordance with their specific legislation.

5. The amount and the constituent elements of the solvency margin payable to insurance institutions and to the consolidable groups of insurance institutions shall be determined in accordance with the requirements to be met by those elements. limits applicable to them and the definition of intangible elements for the purposes of the solvency margin shall be fixed.

6. The rules contained in this Article on consolidated solvency margin and the management and supervision of the consolidated groups in the terms to be set shall apply to the consolidated sub-groups of insurance institutions. regulentarily.

Article 18. Guarantee fund.

1. The third part of the minimum amount of the solvency margin is the guarantee fund, which may not be less than EUR 3 million for institutions operating in one of the classes of life, security, credit and any of the cover the risk of civil liability, as well as those engaged in exclusively reinsurer activities, and EUR 2 million for the remainder.

2. For the mutual benefit of the passively and the cooperatives, the minimum guarantee fund shall be three quarters of the requirement for the remaining entities.

When such entities do not operate in the fields of civil liability, credit, caution or exclusively reinsurer activities, and their annual amount of premiums or quotas does not exceed EUR 5 million for three years. For consecutive years, the guarantee fund may not be less than EUR 800 000 if they operate in the life field, EUR 200,000 if they operate in the classes of other damage to property, legal defence or death, and EUR 300,000 if they operate in the other. In case the institution exceeds the amount of EUR 5 million for three consecutive years, the minimum amount provided for in the preceding subparagraph shall apply with effect from the fourth year.

However, the mutual benefit of such a scheme shall be exempt from the minimum guarantee fund where they do not operate in the life-classes, civil liability, credit or caution or carry out exclusively reinsurer activities and its annual amount of premiums or contributions does not exceed EUR 750,000.

3. The amounts referred to in paragraph 1 shall be reviewed annually from 20 September 2003 in order to take account of changes in the European consumer price index published by Eurostat.

The amounts will be automatically adjusted, increasing their initial amount in euro by the percentage change of that index during the period between 20 March 2002 and the review date, rounding up to a multiple of 100,000 euros. If the percentage change since the last update is less than five percent, no update will be made.

To facilitate their knowledge and implementation, these updates will be made public by resolution of the General Directorate of Insurance and Pension Funds.

Article 19. Limitation of distribution of surpluses and activities.

1. The profits or surpluses arising in the first three full years of activity and also in the initial year, if not complete, may not be distributed and shall be applied in full to the allocation of the legal reserve in public limited liability companies, a reserve with the same regime in mutual societies and the compulsory incorporation of social capital into cooperatives.

2. Insurance undertakings which do not have their technical provisions fully covered or whose solvency margin or guarantee fund does not meet the legal minimum may not distribute dividends or branches or extend their business to other insurance classes, neither its territorial scope nor the extension of its activity under the right of establishment or freedom to provide services, nor, finally, to extend its commercial network.

SECTION 2. OTHER SPECIFIC REQUIREMENTS

Article 20. Accounting and consolidation duty.

1. The accounting of the insurance institutions and the formulation of the accounts of the consolidated groups of insurance entities shall be governed by their specific rules and, failing that, by those laid down in the Trade Code, in the General Plan (a) Accounting and other provisions of commercial law on accounting matters. Insurance undertakings authorised to operate simultaneously in the life field and in the classes of accidents or diseases, in accordance with Article 11 (2) or (3), shall keep separate accounts for those entities.

The specific accounting standards referred to in the preceding paragraph, the accounting obligations of the insurance institutions, the accounting principles of compulsory application, the rules on the accounting system, the rules on drawing up of its annual accounts, the criteria for the assessment of the constituent elements of the accounts and the arrangements for the approval, verification, deposit and publicity of those accounts. Such regulatory powers shall be exercised on a proposal from the Ministry of Economic Affairs and Finance and after reporting by the Accounting and Audit Institute of Accounts and the Advisory Board of Insurance and Pension Funds.

The Minister of Economy and Finance, prior to the same reports, is empowered to develop these specific accounting standards.

2. In order to comply with the solvency margin and, where applicable, the other limitations and obligations laid down in this law, the insurance institutions shall consolidate their accounting statements with those of the other insurance institutions or financial institutions. which constitute a decision unit with them.

For these purposes, it is understood that a group of entities constitutes a unit of decision when one of them exercises or is able to exercise, directly or indirectly, the control of the others, or when such control corresponds to one or more several natural persons acting systematically in concert.

It shall be presumed that there is in any case a unit of decision when one of the cases referred to in Article 42 (1) and (2) of the Trade Code is present.

For the purposes of the preceding two paragraphs, the rights of the parent shall be added to the rights of the parent through other controlled entities or through persons acting on behalf of the parent or other entities. dominated, or those you have in concert with anyone else.

3. The consolidated groups of insurance institutions are subject to the duty of consolidation in accordance with the provisions of this Article, the rules to be laid down in their development and, in the alternative, the rules contained in Articles 42 to 49 of the Treaty. Trade code and other applicable code of trade legislation.

The following rules apply:

(a) A group of financial institutions is considered to be a consolidated group of insurance institutions, whose types of integrated entities will be determined in a regulatory manner, when any of the circumstances following:

1. An insurance entity controls the other entities.

2. The parent entity is an entity whose principal activity is to have holdings in insurance entities.

3. A natural person, a group of natural persons acting systematically in concert or a non-financial institution dominates several entities, all of which are insurers.

When any of the last two circumstances apply, it shall be for the Directorate-General for Insurance and Pension Funds to designate the person or entity required to formulate and approve the annual accounts and the management report. the consolidated accounts and the deposit, and the obligation to appoint the auditors shall be the responsibility of the auditors. For the purposes of this designation, the insurance institutions belonging to the group shall report the existence of the group to the Directorate-General for Insurance and Pension Funds, with an indication of the address and the social reason of the institution which exercises the control, or its name if it is a natural person.

In no case, credit institutions and securities companies and agencies shall be part of the consolidated group of insurance entities.

(b) The General Directorate of Insurance and Pension Funds may require institutions subject to consolidation in a consolidated group of insurance entities to be required to verify the consolidations. carried out and analyse the risks taken by the whole of the consolidated entities, as well as, with the same purpose, to inspect their books, documentation and records. In addition, it may require natural persons or non-financial institutions not to be part of the consolidated group of insurance institutions, but in respect of which, as provided for in this law, there is a unit of decision, as many as information may be useful for the exercise of the management and supervision of the consolidable groups of insurance entities and to inspect them for the same purposes.

(c) When of the economic, financial or managerial relationships of an insurance undertaking with other entities, the existence of a consolidated group of insurance entities or other unit of

decision, without the entities having proceeded to the consolidation of their accounts, the Directorate-General for Insurance and Pension Funds may request information from or inspect those entities for the purposes of determining the provenance of the consolidation.

(d) The same obligations imposed in this paragraph 3 shall apply to the consolidated sub-groups of insurance institutions. For such purposes, a set of financial institutions shall be defined as the configuration of which is in accordance with one of the types referred to in subparagraph (a) above, which in turn is integrated into a higher-spread and different-type consolidable group. Notwithstanding the foregoing, the dominant insurer of a group of companies shall not be subject to the duty of consolidation where it is, in turn, a company dominated by a dominant insurer of a group of companies.

The way in which the subgroup is integrated into the group and the collaboration, if any, between the supervisory bodies and bodies can be regulated.

e) When foreign entities exist

likely to be integrated into a consolidated group of insurance institutions, the scope of the consolidation duty as referred to in this paragraph 3 shall be determined in accordance with, inter alia, the domicile of entities in one of the Member States of or outside the European Economic Area, to their legal nature and to the degree of control.

4. The General Directorate of Insurance and Pension Funds may authorise the individual exclusion of an insurance or financial institution from the consolidable group of insurance entities where the inclusion of that entity in the consolidation is inadequate to meet the objectives of the management and supervision of that group.

5. If a consolidated group of insurance institutions are part of an entity subject to control by a supervisory authority other than the Directorate-General for Insurance and Pension Funds, the latter shall act in a coordinated manner. with that supervisory authority. For these purposes, the Minister for Economic Affairs and Finance may lay down precise rules to ensure proper coordination.

6. Any regulatory rule for the development of this law regulating the consolidation of consolidated groups of insurance entities that may directly affect other financial institutions subject to the management and supervision of the Bank of Spain or the National Securities Market Commission shall be given prior report of these bodies.

7. The financial year of all insurance institutions shall coincide with the calendar year.

Article 21. Consolidated accounts of the consolidable groups of insurance entities.

1. The obligation laid down in paragraph 2 of the previous Article for the consolidable groups of insurance institutions is independent of the obligation to make the consolidated annual accounts established by the Trade Code for the groups of companies that integrate insurance entities.

In order to comply with the obligation to formulate the consolidated accounts established by the Code of Commerce, the rules contained in the Code of Commerce shall apply in full. However, where the accounting standards approved by the European Commission regulations are not applied, the consolidation rules developed by the Trade Code shall be determined in accordance with the same established procedures and criteria. in Article 20 (1), in compliance with the principles on the presentation of the accounts of the groups of companies in the first book of the Trade Code and its implementing provisions, although the the necessary adjustments to be made necessary for the insurance institutions, in groups of companies:

a) Cuya parent company is an insurance entity,

(b) A parent company is an entity whose principal activity is to have holdings in insurance institutions, and

c) In which, including one or more insurance entities, the activity of these entities is the most important of the group.

2. The consolidated statements provided for in paragraph 2 of the preceding Article shall be signed by the administrators of the institution of the consolidated group of insurance companies required for their formulation; however, in the case referred to in the Paragraph 3 (a) (3) (a) of the previous Article, the required entity shall be designated by the Directorate-General for Insurance and Pension Funds between the insurance institutions of the group.

3. The Directorate-General for Insurance and Pension Funds may require that the consolidated statements for the financial year referred to in the preceding paragraph, if they do not coincide with those of the group of companies established by the Code of Commerce, are subject, with the scope to be determined, to the audit of the auditors of the entity required to produce them.

Article 22. Arrangements for significant shareholdings.

1. For the purposes of this law, significant participation is defined as being a holder in an insurance institution, directly or indirectly, of a percentage equal to or greater than 10% of the share capital, mutual fund or voting rights. It also has the consideration of significant participation, in terms to be determined by regulation, any other possibility of exercising a significant influence on the management of the insurance institution in which a participation.

2. Any natural or legal person who intends to acquire, directly or indirectly, even in the case of capital increase or reduction, mergers and divisions, a significant participation in an insurance undertaking shall inform prior to the General Directorate of Insurance and Pension Funds, and shall record the amount of such participation, the terms and conditions of the acquisition and the maximum period for which the operation is intended. The same duty of information shall be subject to such natural or legal persons when they intend to increase their significant participation, so that the proportion of their voting rights or shares in the capital becomes equal. or greater than the 20 percent, 33 percent, or 50 percent limits, and also when the insurer becomes a society dominated by those.

In order to determine the application of this obligation, all those held by the group shall be deemed to belong to the acquirer or the transfer of the shares in the capital, according to the definition of this in Article 20.2 of this Law, to which it belongs or on behalf of which it acts.

The Directorate-General for Insurance and Pension Funds shall have a period of three months from the date of submission of the information required by the preceding paragraph, in order to oppose the acquisition of significant participation or of each of its increments which match or exceed the above limits or which make the insurer in the holding company dominated by the holder of the significant holding; the opposition

should be based on the fact that the person seeking to acquire it is not suitable to ensure sound and prudent management of the insurance undertaking. If the Directorate-General for Insurance and Pension Funds does not decide within three months, the acquisition or increase of participation may be taken. If that Directorate-General expresses its conformity with the acquisition or increase of significant participation, it may set a maximum period of time other than the statement to make the acquisition.

3. Where one of the acquisitions or increases referred to in paragraph 2 is carried out in breach of the provisions of paragraph 2, the following effects shall occur:

(a) In any event and automatically, no political rights may be exercised corresponding to the shares acquired irregularly. If, however, they are to be exercised, the corresponding votes shall be void and the agreements shall be impugable in accordance with the provisions of Articles 115 to 118 and 122 of the recast of the Law of Companies, approved by the Royal Decree Legislative 1564/1989, of 22 December, for which the General Directorate of Insurance and Pension Funds will be entitled.

(b) If necessary, special control measures shall be taken on the insurance undertaking.

(c) In addition, the administrative penalties provided for in Articles 41 and 42 of this Law may be imposed.

4. Any natural or legal person who intends to cease to have, directly or indirectly, a significant participation in an insurance undertaking shall inform the Directorate-General of Insurance and Pension Funds in advance of this. the expected amount of the decrease in their participation. The same obligation of information will have those who intend to reduce their significant participation, provided that the proportion of their voting rights or of participations in the capital falls from the limits of 50 percent, 33 percent or 20 percent. one hundred, or that the insurer ceases to be a society dominated by the one with significant participation.

Failure to comply with this duty of information shall be sanctioned as provided for in Section 5. of Chapter III of this Title II.

5. The obligation referred to in paragraphs 2 and 4 above also applies to the insurance undertaking from which the significant participation is acquired, increased, decreased or no longer involved.

In addition, the insurance companies will communicate, at the time of filing their periodic information, and whenever they are required for the purpose by the General Directorate of Insurance and Pension Funds, the identity of the shareholders or members holding significant holdings, the amount of such holdings and any changes in the shareholding. In particular, the data on significant participation shall be obtained from the annual general meeting of shareholders or partners, or from information received pursuant to the obligations arising from Law 24/1998, of 28 July, of the Securities Market.

6. Where it is established that the holders of a significant holding have an influence which is detrimental to the sound and prudent management of an insurance undertaking, which will seriously damage its financial situation, the Minister for Economic Affairs and Hacienda, on a proposal from the Directorate-General for Insurance and Pension Funds, may adopt some or some of the following measures:

(a) Those provided for in paragraphs (a), (b) and (c) of paragraph 3 of this Article, while the suspension of voting rights may not exceed three years.

b) By way of exception, revocation of the authorization.

7. The provisions of this Article for the insurance institutions shall be without prejudice to the application of the rules on public takeover bids and information on significant holdings contained in Law 24/1988 of 28 July 1988. of the Stock Market.

Article 23. Disposal of portfolio.

1. The Spanish insurance institutions may transfer all the insurance contracts which are part of the portfolio of one or more branches in which they operate, with the exception of mutual and cooperative to variable premiums and social security mutual funds, which may only acquire the portfolios of entities of the same class. This general portfolio transfer of one or more classes shall be in accordance with the following rules:

(a) It shall not be the cause of termination of the insurance contracts provided that the transferee insurer is subrogated in all the rights and obligations incumbent upon the transferor in each of the contracts, unless it is whether they are mutual and cooperative at a variable premium or social welfare mutual societies.

(b) After the transfer, the transferee shall have sufficient technical provisions in accordance with Article 16, and shall exceed the solvency margin set out in Article 17.

(c) The transfer must be authorized by the Minister of Economy and Finance, after the publication of the transfer agreement and the period of one month from the last announcement during which the right to exercise the right of of opposition. However, such public information may be dispensed with when the authorisation is refused because it does not meet the legally enforceable requirements for disposal. Once authorized, the cession will be formalized in public deed, which will be entered in the Mercantile Register.

(d) The labor relations existing at the time of the transfer shall be governed by the provisions of Article 44 of the recast text of the Law of the Workers ' Statute, approved by the Royal Legislative Decree 1/1995, of 24 March.

2. Partial disposals of the portfolio of a branch shall also be admissible in cases that are determined to be regulated; in that case, the policyholders may terminate the insurance contracts.

3. Where the portfolio to be granted includes contracts entered into under the right of establishment or under the freedom to provide services, the provisions of Article 50 shall also apply.

Article 24. Transformation, Merge, Split, and Pool.

1. The social welfare mutual societies and the mutual and cooperative insurance at variable premium may be transformed into mutual and cooperative at fixed premium, and those and mutual and cooperative at fixed premium may be transformed into public limited liability companies. insurance.

Any transformation of an insurance entity into a type of company other than those previously provided, whether or not it is an insurer, shall be void.

In the transformation of insurance entities, the provisions of Article 23 (1) (b), (c) and (d) shall apply, and the policyholders may terminate their insurance contracts.

2. Any insurance institution may merge into an insurance company and the

companies.

anonymous insurance companies may absorb insurance entities, whatever form they may be. The mutual and cooperative fixed premium may, in addition, be merged into companies of the same nature and form, and may only absorb other insurance undertakings in a manner other than that of a public limited liability company. Mutual insurance and cooperative mutual funds and social security mutual societies may also be merged into companies of the same nature and form, and may only absorb insurance entities in their own legal form.

Insurance entities may not merge with non-insurance entities, or be absorbed or absorbed by non-insurance entities.

In the merger and absorption of insurance institutions, the provisions of Article 23 (1) (a), (b), (c) and (d) shall apply.

3. The division of insurance entities shall be subject to the same limitations and must meet the same requirements as the merger of those entities.

In addition, it may not be spun off from a non-insurance entity part of its assets to be transferred en bloc to an insurance institution, unless the Minister for Economic Affairs and the Finance Minister, by way of exception, authorises it, provided that the the transfer of assets arising from the division allows an exercise of the most appropriate activity and the insurance undertaking benefiting from the division does not assume obligations under that division, without prejudice to the joint and several liability in respect of Article 259 of the recast text of the Law of Companies, approved by the Royal Decree Legislative 1564/1989 of 22 December.

4. In any case not expressly regulated in this law, and in so far as it does not object to it, it shall apply to the transformation, merger and division of insurance entities into the rules of the recast text of the Law on Companies, approved by the Royal Legislative Decree 1564/1989 of 22 December 1989.

5. Insurance institutions may constitute economic interest groups and temporary joint ventures, in the latter case exclusively with each other, in accordance with the general legislation governing them and subject to the supervision of the Directorate-General for Insurance and Pension Funds, in addition to that provided for in that legislation.

6. Exceptionally, the Minister for Economic Affairs and Finance may authorise the conversion, merger and absorption of insurance undertakings in cases other than those provided for in paragraphs 1 and 2 of this Article, as well as the temporary unions of undertakings in which insurance undertakings are integrated with other undertakings other than where they are covered by the special circumstances in which the insurance undertaking applies for processing, merger, absorption or temporary union, as the case may be; obtain a more appropriate development of the activity by the affected insurer, always this does not undermine their financial guarantees, the rights of the insured and the transparency in the assumption of the obligations arising from insurance contracts.

Article 25. Statutes, policies and fees.

1. The statutes of the insurance institutions shall comply with the provisions of this law and its accompanying provisions for development and, in the alternative, the legislation applicable to them according to their nature.

2. The content of the policies must comply with this law. Also, to Law 50/1980, of 8 October, of insurance contract, to the extent that it is applicable under the rules of private international law contained in its Title IV.

3. The premium rates shall be sufficient, according to reasonable actuarial assumptions, to enable the insurance undertaking to satisfy all the obligations arising out of insurance contracts and, in particular, to constitute provisions appropriate techniques.

In addition, they will respond to the freedom of competition regime in the insurance market without, for these purposes, having the character of restrictive practice of competition the use of risk premium rates based on common statistics.

4. Insurance institutions may establish common files containing personal data for the settlement of claims and actuarial statistical collaboration in order to permit the pricing and selection of risks and the production of studies of the insurance technique. The transfer of data to the aforementioned files will not require the prior consent of the affected person, but if the communication to this file of the possible transfer of their personal data to common files for the purposes indicated, with express indication of the responsible, the rights of access, rectification and cancellation provided for in the law may be exercised.

Common files may also be established to prevent fraud in insurance without the need for the consent of the affected person. However, in these cases the communication to the affected person, in the first introduction of their data, of who is responsible for the file and the forms of exercise of the rights of access, rectification and cancellation, will be necessary.

In any case, data relating to health may only be treated with the express consent of the affected person.

5. The Directorate-General for Insurance and Pension Funds may prohibit the use of premiums and premiums which do not comply with the provisions of paragraphs 2 and 3 above. For these purposes, the corresponding administrative procedure in which the suspension of the use of the policies or the premium rates may be agreed as a provisional measure. Prior to the initiation of the administrative procedure in which the said prohibition is agreed, the aforementioned Directorate-General may also, through an administrative procedure, require the insurance institution to accommodate its policies. or premium rates to paragraphs 2 and 3 of this Article. All the above is without prejudice to the application of Law 16/1989 of 17 July of the Defense of Competition, in the terms established therein, to practices contrary to freedom of competition.

6. Policy models, premium rates and technical bases shall not be subject to administrative authorisation and shall not be subject to systematic referral to the Directorate-General for Insurance and Pension Funds. However:

(a) The mandatory subscription insurance policy models must be available to the General Directorate of Insurance and Pension Funds in the form that is regulated.

(b) In the life insurance contracts, the technical bases used for the calculation of the tariffs and technical provisions shall be made available to the Directorate-General for Insurance and Pension Funds to monitor respect for actuarial principles, also in the form that is regulated in law.

(c) The Directorate-General for Insurance and Pension Funds may require the presentation, whenever relevant, of the models of policies, premium rates and the technical basis for monitoring compliance with the provisions technical and on insurance contract.

The requirement contained in the preceding three paragraphs may not constitute a prior condition for the insurance undertaking for the exercise of its activity.

7. Insurance institutions shall keep the documentation referred to in this provision at the registered office.

CHAPTER III

Intervention of insurance entities

SECTION 1. REVOCATION OF ADMINISTRATIVE AUTHORITY

Article 26. Causes of the revocation and its effects.

1. The Minister of Economy and Finance will revoke the administrative authorization granted to the insurance companies in the following cases:

a) If the insurer expressly disclaims it.

(b) Where the insurance undertaking has not commenced its business within a period of one year or ceases to exercise it for a period of more than six months. This inactivity, due to a lack of initiation or cessation of exercise, shall be equivalent to the lack of effective activity in one or more classes, in terms to be determined in a regulated manner, and the general assignment of the portfolio in one or more classes.

(c) Where the insurance institution ceases to comply with any of the requirements laid down by this law for the granting of administrative authorization or incurs dissolution.

(d) Where the insurance undertaking has not been able, within the time limit set, to comply with the measures provided for in a reorganisation or financing plan required under Article 39.2 (b) or (c).

e) When the entity is imposed

insurer the administrative penalty for revocation of the authorisation under Article 41.1.a).

2. The Government may revoke the authorisation granted to Spanish entities with majority foreign participation in application of the principle of reciprocity or when they advise it in extraordinary circumstances of national interest. In no case shall this cause of revocation be applicable to Spanish insurance companies in which the majority foreign participation comes from countries of the European Economic Area.

3. Where one of the reasons for revocation is provided for in paragraph 1 (b), (c) or (d), the Ministry of Economic Affairs and Finance, before agreeing to revoke the administrative authorisation, shall be empowered to grant a period of time, which shall be shall not exceed six months, in order for the insurance undertaking which has requested it to make it available.

4. The withdrawal of the administrative authorisation shall affect all the classes in which the insurance undertaking operates, except in the cases referred to in paragraphs (a) and (b) of paragraph 1, in which it shall, as the case may be, affect the classes to which it has been waived. or for those to affect inactivity.

5. The withdrawal of the administrative authorisation shall, in all cases, determine the immediate prohibition of the hiring of new insurance by the insurance undertaking and the acceptance of reinsurance, as well as the liquidation, subject to Article 28 of the insurance operations of the branches affected by the revocation. In addition, if the revocation concerns all the classes in which the entity operates, it shall be wound up in administrative terms in accordance with Article 27.1.a), without being subject to the provisions of paragraphs 2 and 3 of that Article 27.

SECTION 2. TERMINATION AND SETTLEMENT OF INSURANCE ENTITIES

Article 27. Dissolution.

1. They are causes of dissolution of the insurance entities:

(a) Revocation of the administrative authorisation that affects all the classes in which the entity operates.

However, revocation will not be a cause of dissolution when the entity itself renounces administrative authorization and this waiver comes solely motivated by the modification of its social object to develop an activity. other than those listed in Article 3.1.

(b) The general transfer of the insurance contract portfolio when it affects all the classes in which the institution operates. However, the transfer of a portfolio shall not be a cause of dissolution where in the public deed of disposal the transferor manifests the modification of its social object in order to carry out an activity other than those listed in Article 3.1.

(c) The number of partners, in mutual and insurance cooperatives and in social security mutual societies, is reduced to a figure below the legally enforceable minimum.

d) Do not perform passive derbranches as required by Articles 9 and 10.

e) The causes of dissolution listed in Article 260 of the recast of the Law of Companies, approved by the Royal Decree of Law 1564/1989 of 22 December 1989. In the case of mutual insurance and social welfare mutual societies, the references that are made to the general meeting and to the social capital must be understood as references to the general assembly and the mutual fund, respectively. However, the causes of dissolution of insurance cooperatives shall be applied in their specific legislation.

2. The dissolution, except in the case of compliance with the term laid down in the statutes, shall require the agreement of the general meeting or assembly. For these purposes, the administrators shall convene it for their conclusion within two months from the concurrence of the cause of dissolution, and any partner may require the administrators to convene the meeting or assembly if, at their judgment, there is legitimate cause for dissolution.

3. In the event that there is a legal cause of dissolution and the meeting or assembly was not convened or, if it were, not to be held, the agreement could not be reached or would be contrary to the dissolution, the administrators will be obliged to request the the administrative dissolution of the institution within 10 calendar days from the date on which the meeting or assembly was to have been convened in accordance with paragraph 2, where it was not convened; or from the date set for its conclusion, where that has not been constituted; or, finally, from the day of the celebration, when the dissolution agreement could not be achieved or would have been contrary to dissolution.

4. Known to the Ministry of Economy and Finance the concurrence of a cause of dissolution, as well as the non-compliance by the social organs of the provisions in the previous paragraphs, will proceed to the administrative dissolution of the entity.

The administrative procedure for dissolution shall be initiated on its own initiative or at the request of the administrators and, following the arguments of the entity concerned, the Ministry of Economy and Finance shall, if appropriate, proceed to the dissolution of the the administrative authority of the institution, without the need for such an effect to be convened by its board or asam

general blas. The administrative dissolution agreement shall contain the revocation of the administrative authorisation for all the classes in which the insurance undertaking operates.

5. In everything that is not expressly regulated in the previous paragraphs and as soon as they do not object to them, the rules contained in Articles 261 to 265 of the recast text of the Law of Companies, approved by the Royal Legislative Decree, will apply. 1564/1989 of 22 December 1989. However, insurance cooperatives shall be governed by the rules of dissolution contained in their specific legislation.

Article 28. Settlement of insurance entities.

1. The liquidation of a Spanish insurer shall also include that of all its branches.

During the liquidation period, the transactions defined in Article 3.1 may not be concluded, but the insurance contracts in force at the time of the dissolution shall remain effective until the end of the period of the liquidation. insurance in progress, and shall expire at that time without the possibility of an extension, without prejudice to the option of early maturity in accordance with the provisions of paragraph 2.d).

2. In the liquidation, and until the cancellation of the registration in the administrative register, the Ministry of Economy and Finance shall retain all its powers of ordination and supervision over the institution in liquidation and may also adopt the following measures:

(a) Agree to the intervention of the liquidation to safeguard the interests of the insured, beneficiaries and injured or of other insurance entities.

Determined the intervention, the actions of the liquidators in the terms defined in this article, in Article 39.3, and in their regulatory provisions, shall be subject to the control of the intervention of the State. development.

b) Designate liquidators or entrust the settlement to the Insurance Compensation Consortium in the cases listed in Article 14 of the recast of the Legal Statute of the Insurance Compensation Consortium, approved by the Real Legislative Decree 7/2004 of 29 October.

(c) Dispose, ex officio or at the request of the liquidators, the general or partial transfer of the entity's insurance contract portfolio to facilitate its liquidation.

(d) Determine the date of the anticipated maturity of the term of the insurance contracts that integrate the institution's portfolio into liquidation, in order to avoid further damage to insured persons, beneficiaries and third parties harmed by such contracts.

Such determination shall respect the economic balance of the benefits in the contracts concerned and must take place with the necessary publicity, in advance of 15 calendar days before the date on which it is to take effect and, unless exceptional circumstances are met which advise not to delay the due date, at the same time as compliance by the liquidators of the duty to report under paragraph 3.c.).

3. The legal status of the appointment, performance and liability of the liquidators shall be in accordance with the following rules:

(a) Only liquidators who have recognised good repute and necessary conditions of professional qualification or experience to perform their duties and shall be subject to the same liability regime may be liquidators. administrative that the administrators of an insurance entity.

b) When the entity did not appoint liquidators within 15 days of the dissolution, or when the appointment within that period was not fulfilled by the statutory and statutory requirements, the Minister of Economy and Finance may appoint liquidators or entrust the settlement to the Insurance Compensation Consortium.

(c) The liquidators shall, in union with the directors, take stock of the institution's inventory and balance sheet and must submit it, within a period not exceeding one month after its appointment, to the Directorate-General for Insurance and Pensions or, if the settlement is intervened, to the financial controller. They shall inform the creditors of the situation of the institution, in particular the insured persons as to whether the Directorate-General for Insurance and Pension Funds has determined the anticipated maturity of the duration of the contracts insurance which includes the insurance institution's portfolio and its date, and the way in which they are required to apply for the recognition of their claims, by means of individual notification to the known and appealing to the unknown through advertisements, approved in their case by the financial controller, to be published in the "Official Gazette of the Trade Register", and two newspapers, at least, of those with the highest circulation in the area of performance of the insurance undertaking.

When the known creditor has its registered office in a Member State of the European Economic Area other than Spain, the information above shall be provided in Spanish, although the document must bear in all the official languages of the European Union, the heading ' Convocation for the submission of appropriations. Applicable time limits "or" Call for submission of comments on appropriations. Applicable time limits ', as appropriate. However, where the creditor is by an insurance claim, the information shall be provided in the official language or in one of the official languages of the Member State in which it is situated.

Creditors with domicile in a Member State of the European Economic Area other than Spain may submit written claims for claims or observations in the official language or in one of the languages officials of the State where the address is located, although the document must bear the heading "Presentation of credits" or, where appropriate, "Presentation of observations on the credits" in Spanish.

(d) The liquidators shall take the necessary measures to finalise the settlement as soon as possible, and may give in general or in part the entity's portfolio of insurance contracts with the authorisation of the Minister of Economy and Finance, as well as pactar the rescue or resolution of insurance contracts. The disposal of the buildings may take place without public auction where the liquidation is brought in or when, having been assessed for these purposes by the technical services of the Directorate-General for Insurance and Pension Funds or by valuation companies, the disposal price is not less than the price of the valuation.

It will require, in one and another case, the prior authorization of the General Directorate of Insurance and Pension Funds.

The disposal of the remaining assets and the performance of the payments shall specify the conformity of the financial controller in the settlement of the transactions by the State.

e) When the liquidators fail to comply with the rules that for the protection of the policyholders are established in this law or those that govern the liquidation, the difficulties or delays, the Minister of Economy and the Finance will be able to agree on their dismissal and appoint new liquidators or entrust the settlement to the Insurance Compensation Consortium.

f) In the rest, liquidators will subject their performance to the recast text of the Year of Companies Act

nimas, approved by the Royal Legislative Decree 1564/1989, of December 22.

4. During the liquidation period, the entity may offer the Minister of Economy and Finance the removal of the cause of dissolution and request the rehabilitation of the revoked administrative authorization. Such rehabilitation may be granted only if the institution meets all the conditions required during normal operation and ensures all the rights of insured persons and creditors, including those whose insurance contracts have been declared due during the liquidation period. If the rehabilitation of the revoked administrative authorization is agreed, the cause of dissolution shall be deemed to be removed from full right, the registration in the Mercantile Register shall be cancelled in accordance with Article 263 of the recast text of the the Law of Companies, approved by the Royal Decree of Law 1564/1989, of 22 December, and will give to the agreement of rehabilitation the same publicity that said precept imposes for the agreement of dissolution.

5. Once the liquidation operations have been completed, the Minister of Economy and Finance will declare the entity extinguished and the seats in the administrative register will be cancelled. By way of derogation, the seats on that register shall be cancelled without the institution's declaration of extinction, and at that time it may initiate the activity in accordance with the amended social object, where the general transfer of the a portfolio or the revocation of the authorisation, provided that, in both cases, the social object of the institution has been amended without dissolution of the institution and the Directorate-General for Insurance and Pension Funds has previously established that it has been implemented the disposal of the portfolio or the insurance operations have been settled, respectively.

The cancellation in the administrative register will determine, in the entity's declaration of extinction declaration, the cancellation in turn in the Mercantile Register.

6. The corresponding administrative decision or the agreement which it brings shall be recognised in the territory of the other Member States of the European Economic Area, in accordance with the provisions of its legislation, and shall take place. effects on them as soon as they do in Spain.

For these purposes, the Directorate-General for Insurance and Pension Funds, within 10 days from the date on which the decision is made or becomes aware of the agreement, shall inform the authorities of the monitor the other Member States of the European Economic Area on the existence of the procedure and its effects. In the Official Journal of the European Union, an extract from that decision or an agreement, which shall in any event indicate the competence of the Ministry of Economic Affairs and Finance on the procedure, shall be published in the Official Journal of the European Union. the settlement procedure is contained in this law and in its implementing rules, as well as the identification of the appointed liquidator or liquidators.

Liquidators may develop their performance in the territory of all Member States of the European Economic Area, and may exercise in them the same functions and powers as in Spain. For these purposes, it shall be sufficient evidence to prove the status of liquidator a certification of the decision or a legalised copy of the agreement for which the appointment is made.

They may also grant proxy powers or request assistance where this is necessary to carry out the settlement process in the territory of other Member States of the European Economic Area and, in In order to address the difficulties that resident creditors may encounter in them.

In any case, persons who attend or represent them must be of good repute and must meet the necessary conditions of qualification or professional experience to perform their duties, in accordance with Article 15. of this law.

The provisions of this law and its implementing rules will be applicable to liquidation.

7. In any case not expressly regulated in this article, the liquidation and extinction of insurance entities shall be governed by the provisions of Articles 266 to 280 of the recast of the Law of Companies, approved by the Royal Decree Legislative 1564/1989 of 22 December 1989, excluding Articles 269 and 270.

Article 29. Actions against insurance institutions subject to insolvency proceedings or in liquidation.

1. In the case of a judicial declaration of competition by insurance institutions, the Insurance Compensation Consortium, in addition to assuming the functions conferred on it by Article 14 (2) of the recast of the Legal Statute of the Consortium of Insurance Compensation, approved by the Royal Legislative Decree 7/2004 of 29 October, will, if necessary, proceed to liquidate the amount of the goods referred to in Article 59.3 of this Law, to the sole effect of distributing it among the insured, beneficiaries and injured parties, without prejudice to the right of those in the proceedings insolvency.

2. In the case of insurance institutions which are administratively dissolved, no real rights of guarantee shall be entered in the public registers, nor may judicial or administrative injunctions have been entered into, from the date of the publication in the "Official Gazette of the State" of the ministerial order for dissolution, without prejudice to the effectiveness of the appropriations which, if necessary, are intended to be guaranteed by the aforementioned entries or entries.

The records in charge shall indicate on a marginal note the fact of the dissolution and the closing of the registered portfolio to the acts referred to in the preceding paragraph. If the rehabilitation of the revoked administrative authorisation is agreed, the relevant marginal note shall be cancelled.

3. In the case of liquidation brought by the Ministry of Economic Affairs and Finance, the individual shares held by the creditors before or during the settlement may continue until the delivery of the judgment. The Court of First Instance shall, in accordance with Article 1 (2) of the Treaty, provide for the application of Article 3 (2) of the Treaty to the European Parliament. However, after one year after the judgment becomes final, the suspension shall be automatically lifted without the need for a declaration or a resolution in this respect, whichever state the settlement was in.

The provisions of the preceding paragraph do not apply to shares in the exercise of real rights over goods located outside the Spanish territory, which shall be governed by their specific legislation, or to the shares in the financial year of a real right of guarantee to be governed by a law other than the Spanish law.

Article 30. Consign procedures.

1. If the competent court has issued a declaration of competition in respect of an insurance undertaking, that body shall immediately notify the Directorate-General for Insurance and Pension Funds, which shall be notified within 10 days. next

shall inform the supervisory authorities of the other Member States of the European Economic Area on the existence of the procedure and its effects. The Directorate-General for Insurance and Pension Funds shall also publish in the Official Journal of the European Union an extract from the abovementioned resolutions indicating, in any case, the competent court or tribunal. and the application to the Spanish legislation procedure.

2. In any event, the rules of private international law provided for in Law 22/2003, of July 9, are to be observed.

Dealing with known creditors who have their domicile in a Member State of the European Economic Area other than Spain, they must be informed of the way in which they have to apply for recognition of their claims in accordance with Article 28 (3) (c) of this Act and may submit the written claims for claims or observations to the claims in the form referred to in the same Article.

3. The Directorate-General for Insurance and Pension Funds may ask the contest judge for information on the status and development of the procedures involving insurance companies.

SECTION 3 LIQUIDATION BY THE INSURANCE COMPENSATION CONSORTIUM

Article 31. Performance of the Insurance Compensation Consortium in the liquidation of insurance entities.

The Insurance Compensation Consortium (hereinafter the Consortium) shall assume the status of liquidator of the insurance entities listed in Article 7.1 of this Law in the terms laid down in Article 14 of the Statute. Legal of the Insurance Compensation Consortium, approved by the Royal Legislative Decree 7/2004, of October 29.

Article 32. General settlement rules.

1. In the liquidations entrusted to it, the Consortium will replace all the social bodies of the affected insurer. Accordingly, there shall be no place for the holding of the ordinary or extraordinary meetings or assemblies of shareholders, mutualists or cooperative members of the institution.

The delegations and proxies you trust must be entered in public deed.

However, the administrative and legal-administrative resources brought by the insurance institution against the acts of management and supervision of the Ministry of Economy and Finance prior to the assumption of the settlement by the Consortium may be continued by the administrators and by the partners who have a significant participation in their own name, as holders of a direct interest, if they are to be personified for these purposes administrative or judicial within one month of the publication in the Official Journal of the European Status " of the discharge to the Consortium.

2. The Consortium shall, where appropriate, require the liability of any kind which may have been incurred by those who have been in charge of administration or management of the insurance undertaking in liquidation. Under no circumstances shall the Consortium, its organs, representatives or proxies be considered debtors or liable for the obligations and responsibilities incumbent upon the insurer whose liquidation is entrusted to it or to its administrators.

3. In the event of the insolvency of the insurance undertaking, the Consortium shall not be obliged to apply for the judicial declaration of competition. They shall also be granted, to the date of publication in the 'Official Gazette of the State' of the administrative decision to which the liquidation is entrusted, the outstanding debts of the insurer, without prejudice to the discount if the payment of those is verified before the time prescribed in the obligation, and shall cease to pay interest all the debts of the insurer, except the mortgage and pignoraticios, as far as the respective warranty.

4. The intervention of the State shall cease at the time the settlement is entrusted to the Consortium.

Article 33. Benefits of settlement.

1. From the resources of the Consortium affected to its liquidating activity and in order to improve and to achieve a faster satisfaction of the rights of the insured, beneficiaries and third parties, including the Administrations The Consortium may offer them the acquisition by cession of their claims, and the amounts which would be payable to them in proportion to the foreseeable liquid resulting, taking into account, these alone, shall be paid to them. effects, the following rules:

(a) The whole of the assets and claims, including interest, where the Consortium is able to appreciate the insurer's ownership in liquidation, may be incorporated into the asset, even if they are outstanding or have to initiate judicial or extrajudicial proceedings for the maintenance of the entity's assets or the reintegration thereof.

(b) The material and financial investments shall be valued for the higher than the following two: the purchase price plus the amount of improvements made on those, plus the amount of the adjustment and legally possible updates, or the realization value.

(c) The order of credit ranking and the settlement expenses anticipated by the Consortium shall not be taken into account.

In no case, will this measure apply to the credits in favor of the insurers.

2. The Consortium may also, in addition to its own resources, satisfy in advance the claims of workers arising from salaries and severance payments covered by Article 32.1 and 3 of the recast of the Law of Workers ' Statute, approved by the Royal Legislative Decree 1/1995 of 24 March; and, where appropriate, the compensation due to those as a result of the extinction of industrial relations.

The acquisition by transfer of the appropriations referred to in paragraph 1 and the advances referred to in this paragraph shall in no case assume the debts of the insurance undertaking in liquidation by the Consortium.

The cession of these credits and advances, whatever the amount satisfied, will reach the total amount of those and in the same order of preference that corresponds to them. Their owners will not be able to make any claim for this concept; they will also not be able to claim against the Consortium the holders of these credits that opt not to accept the offer made by the Consortium, who will maintain the ownership of their claims and shall be subject to the outcome of the settlement.

3. The Consortium may satisfy in advance, from the resources of the insurance undertaking in liquidation, the claims of the workers corresponding to salaries of the last 30 working days, with the limitation of Article 32.1 of the recast of the Law of the Workers ' Statute, approved by the Royal Legislative Decree 1/1995 of 24 March; and, second, the credits of the creditors with real right in the terms and order established in the mortgage legislation. If the satisfaction of such claims is not reached, the creditors referred to shall have in the settlement, in order to charge the unsatisfied amount, the preference that corresponds to them according to the nature of their credit.

4. Where the insurance undertaking in liquidation is in a position of insolvency, if the settlement plan is approved by the creditors ' meeting, the recovery by the Consortium of settlement expenses shall be conditional upon them being fully satisfied the other recognised in the settlement.

5. In the cases in which the Consortium is entitled to indemnify pursuant to paragraphs (c) to (f) of Article 11.1 of the recast of the Act on Civil and Safe Liability in the Movement of Motor Vehicles, approved by the Royal Decree Legislative 8/2004 of 29 October, as well as in any other case in which the existing legislation determines the subsidiary liability of the Consortium for finding the corresponding insurance institution subject to a bankruptcy procedure, (a) the settlement of the settlement or the settlement of the settlement; Paragraph 1 of this Article in respect of the credits of injured third parties shall apply only to the part of such claims which exceeds that part of the amount corresponding to the Consortium under such subsidiary responsibility. The provisions of paragraphs 2 and 3 concerning the claims of workers shall relate only to the part of such claims which exceeds that part of the payment of the salary guarantee fund.

Article 34. Settlement procedure.

The settlement procedure by the Consortium shall be in accordance with the provisions of Article 28.3, with the following peculiarities:

(a) Entrusted with the settlement to the Consortium, all creditors shall be subject to the winding-up procedure by the Consortium and may not be requested by the creditors or the insurance institution for the declaration of competition, without prejudice to the that the actions of any kind exercised before the courts against that insurer, prior to the dissolution or during the liquidation period, continue to be processed until a final judgment or judgment is obtained. However, the execution of the judgment, the preventive embargoes, the judicially agreed administrations and the other precautionary measures taken by the judicial authority, that of the car which takes the execution in the executive proceedings, the Summary judicial proceedings and extrajudicial executives on mortgaged or pignorised goods located in Spanish territory, as well as the execution of the administrative provisions of the award, shall be suspended from the entrustment the liquidation of the Consortium and during the processing of the liquidatory procedure.

If the settlement plan formulated by the Consortium is not approved by creditors ' meeting or ratified by the General Directorate of Insurance and Pension Funds, the Consortium will be fully entitled to request the the contest declaration of the entity concerned, and shall do so immediately.

2. Where the liquidation of the insurance undertaking is entrusted to the Consortium after the dissolution of that insurer, it shall, as appropriate, verify or verify in union with the administrators and liquidators that they have been appointed, the the inventory and balance sheet of the institution within one month of the assumption of the liquidation, without having to submit it to the Directorate-General for Insurance and Pension Funds or to the financial controller, or be subject to the obligation imposed by Article 273 of the recast of the Law of Companies, approved by the Royal Decree of Law 1564/1989, December 22.

3. In the fulfilment of the duty of information to the creditors, the special circumstance shall be made known to the special circumstance that the liquidation has been assumed by the Consortium. Likewise, from the moment he becomes aware of the existence of labor credits or presumes the possibility of his existence, he will communicate it to the Fund of Salarial Guarantee, a communication that will take the effects of the citation referred to by the Article 33 (3) of the recast text of the Law of the Workers ' Statute, approved by the Royal Legislative Decree 1/1995 of 24 March.

4. Until ratification by the General Directorate of Insurance and Pension Funds of the settlement plan, the Consortium will not be able to make payment of its claims to the creditors of the insurance institution, except as provided in the previous article. Expenses that are accurate for settlement will be satisfied by the Consortium's own resources.

5. The disposal of the buildings of the insurance undertaking in liquidation may take place without a public auction and shall not require authorisation from the Directorate-General for Insurance and Pension Funds.

6. The Consortium shall formulate the settlement plan as soon as possible. Before the end of the nine-month period since he has taken up his duties, he shall have carried out the measures provided for in Article 33, in the case where he has adopted them, only for reasons which are justified, accredited to the Directorate-General for Insurance and Pension Funds, may exceed that period.

Article 35. Settlement plan.

The settlement plan shall include information on the measures taken pursuant to Article 33 (1), (2) and (3), the balance sheet and the provisional list of creditors. The assets of the balance sheet must be cash, unless, in the case of immovable property, it has not been deemed to have been disposed of and, in the case of claims, are such litigious, in such a way as to be presumed to be Firm judicial pronouncement would significantly delay liquidation. The provisional list of creditors shall be drawn up in accordance with the order of precedence of Article 59 of this Law and the amount corresponding to each of them. In addition, if the balance sheet is detached from the solvency of the insurance undertaking, it shall incorporate the relationship of partners. Finally, the settlement plan shall contain the proposal in respect of the amount which, in accordance with the assets and liabilities of the balance sheet and the order of payment, is to be satisfied for each of the creditors and, in the case of the institution's solvency, the partners and, if there is a place, the award of immovable property and litigious claims.

Article 36. General meeting of creditors.

1. At the same time as the settlement plan is formulated, the Consortium shall convene the general meeting of creditors not less than one month in advance.

greater than two. It shall be cited by means of personal notification and shall give notice to the public that, in accordance with the circumstances of the case, it considers relevant. Article 28 (3) (c) shall apply as regards the form of communication and advertising to creditors who have their domicile in a Member State of the European Economic Area other than Spain. Until the day indicated for the conclusion of the meeting, the creditors or their representatives may examine the settlement plan. Until 15 days before the date for the meeting, the exclusion or inclusion of credits may be requested, as well as the challenge of the amount of the amounts included in writing addressed to the Consortium, or by appearance before this body, by designating the documents of the liquidation or by submitting the documentation to the applicant in justification of his/her right. The Consortium shall decide on each claim without further appeal, without prejudice to the right of challenge referred to in paragraph 4 of this Article, and shall make the final list of creditors.

2. The meeting shall be held on the day, hour and place indicated in the call, and may continue on consecutive days as necessary, and shall be chaired by a delegate of the Consortium. All creditors included in the final list may, personally or by means of a representative. The creditors ' meeting shall be legally constituted if the claims of the concurrent and represented add up to at least three fifths of the debtor's liability on the first call and whatever the number of the concurrent claims and represented on the second call; between one and the other shall be at least 24 hours. Declared legally constituted by the board by the representative of the Consortium, will begin the session by the reading of the plan of liquidation and will proceed to the debate and subsequent vote on it. The settlement plan shall be deemed to have been approved provided that they vote in favour of the creditor plan whose claims are more than half of the amount of the appropriations present and represented, both at first and second convocation, and shall be obliged all creditors for that purpose, without any of them having the right to abstain, and the provisions of Article 10.2 of Law 47/2003 of 26 November, General Budget, being applied to the public treasury. The appropriations in the part exceeding the amounts recognised to be satisfied in that plan shall be extinguished; in the case of tax credits, only the liabilities of the insurance undertaking shall be extinguished, and they shall remain in their own terms for the remaining tax liability.

3. If the settlement plan is not approved by a general meeting of creditors, the Consortium shall request the judicial declaration of the contest. The same application may be made at any time during the settlement period prior to the creditors ' meeting when it considers that, in the circumstances of the insurance undertaking whose liquidation is entrusted to it, it shall suffer serious damage. prejudice the claims of creditors if such a judicial declaration of competition does not take place.

4. Within eight days following the conclusion of the meeting, the creditors who have not attended it or who, in attendance, have agreed to the majority vote or who have been eliminated by the Consortium from the final list referred to in paragraph 1, they may contest the winding-up plan judicially. Impeachment can only be founded on the following grounds:

a) Defects in the prescribed forms for the convocation, celebration, deliberation and adoption of agreements of the creditors ' meeting.

(b) Lack of personality or representation in any of the voters, including or excluding undue credits or appearing on the final list of creditors with a greater or lesser amount than is deemed to be fair, provided that in either of these cases the estimate of the pretense has a decisive influence on the formation of the majority.

c) Error in estimating the asset or the credit ranking suffered by the Consortium.

In all else, the challenge of the settlement plan will be in accordance with the provisions of Law 22/2003, of July 9, Bankruptcy, for the opposition to the approval of the agreement.

5. After the period referred to in the previous paragraph without any opposition, or once a final judgment has been given, which resolves it and, where appropriate, the settlement plan to it, the Consortium shall raise the settlement plan to the Directorate-General for Insurance and Pension Funds, which will deliver a resolution ratifying the plan. Such ratification shall take the effects provided for in the judgment in paragraphs 6 and 7 of Article 33 of the recast text of the Law of the Workers ' Statute, approved by the Royal Legislative Decree 1/1995 of 24 March, if the The plan follows the insolvency of the insurer.

6. The Consortium shall pay the appropriations in implementation of the approved settlement plan.

Where appropriate, the division and division of the social haber shall proceed in accordance with the statutes and specific provisions applicable to the insurance undertaking and, in the alternative, in accordance with the provisions of Articles 276 and 277 of the recused of the Law of Companies, approved by the Royal Legislative Decree 1564/1989, of December 22, but the deposit in deposit of the unclaimed quotas will take place in the Consortium itself, at the disposal of its legitimate owners for a period of five years, after which, without having been claimed, they shall be entered in the Public Treasury.

7. If, as a result of the time lag between the general meeting of creditors of the winding-up plan and the cash payment of the claims to the creditors, and where appropriate, the division of the social haber between the partners, a remaining, the remainder shall be incorporated into the assets of the Consortium for the purposes set out in

following paragraph.

8. The claims recognised by a firm judgment notified to the creditor at a later date to the conclusion of the general meeting of creditors shall be satisfied by the Consortium with the remainder referred to in the preceding paragraph and, failing that, with its own resources on the same terms as would have been for you to have been included in the settlement plan.

Article 37. Advance payment of settlement and credit satisfaction expenses.

1. If the insurance institution has been declared judicially in competition and lacks the necessary liquidity, the Consortium may anticipate the costs that are accurate, from its own resources, for the proper development of the procedure. Bankruptcy. However, the payment of the rights of attorneys and lawyers shall be for the parties to appoint them, without their advance by the Consortium.

If a proposed agreement is made with the creditors and this outcome is approved, the recovery by the Consortium of the liquidation costs will be conditional on the other recognised in the settlement.

2. In the event of a contest, the provisions of Article 33 of this Law shall apply.

SECTION 4 SPECIAL CONTROL MEASURES

Article 38. Measures to guarantee the future solvency of insurance institutions.

1. The Directorate-General for Insurance and Pension Funds may adopt the measures referred to in paragraph 2 of this Article where circumstances are met, deducted from checks carried out by the Administration, which may endanger the the future solvency of the institution or may pose a threat to the interests of the insured or the future performance of the obligations incurred, as a result of an inadequate selection of risks, the application of premium rates insufficient, the existence of significant deviations from the accident, the inadequacy of the policy of reinsurance or any other cause which may in the future generate a serious situation of imbalance or financial weakness.

2. The guarantee measures for the future solvency of the insurance institutions may consist of:

(a) Require a financial recovery plan from the insurance institution to ensure and provide for its future solvency, which shall be subject to the approval of the Directorate-General for Insurance and Pension Funds.

This plan must at least contain indications and justifications for the next three financial years: the estimates of the management costs, in particular the current general fees and charges; detailed income and expenditure relating to direct insurance operations, reinsurance acceptances and reinsurance transfers; the expected balance sheets; estimates of the financial resources to which it is intended to cover the commitments entered into and the required solvency margin, and the overall policy of reinsurance.

(b) Require that the insurer has a solvency margin higher than that resulting from the application of the provisions of the regulatory development rules of this law, which ensures compliance in the future of the the solvency requirements of the institution.

For these purposes, the minimum amount of the solvency margin to be available shall be that determined by the Directorate-General for Insurance and Pension Funds and shall be based on the financial recovery plan which is approved to the entity.

3. The adoption of the measures to guarantee the future solvency of the insurance institutions referred to in this Article shall be dealt with in accordance with Article 39 (5) of this Law.

Article 39. Special control measures.

1. The Directorate-General for Insurance and Pension Funds may adopt the special control measures contained in this Article where the insurance institutions are in one of the following situations:

(a) Deficit exceeding five per cent in the calculation of each of the technical provisions individually considered, except in the technical provision of benefits, which shall be 15 per cent; also, a deficit of more than 10 per cent; one hundred in the coverage of technical provisions.

b) Impairment of the solvency margin.

c) That the solvency margin does not reach the minimum guarantee fund.

(d) Cumulative losses in excess of 25 percent of their paid social capital or mutual fund.

e) Financial or liquidity difficulties that have determined late or default in their payments.

(f) Manifest imposible to achieve the social end or cessation of the social organs, so that it is impossible to function.

g) Fact situations, deducted from

checks carried out by the Administration, which endanger their solvency, the interests of the insured or the fulfilment of the obligations incurred, as well as the failure to adjust their accounts to the plan of accounting of the insurance institutions or irregularities in the accounting or administration in such terms as to prevent or otherwise make it difficult to know the real estate situation of the insurance undertaking.

The same special control measures may be taken on the dominant entities of consolidable groups of insurance entities and on the insurance entities themselves that are part of the group when the group is located. any of the situations described in paragraphs (a), (b), (c), (e), (f) and (g).

2. Irrespective of the administrative penalty which, where appropriate, it is necessary to impose, the special control measures may consist of:

(a) Prohibit the provision of the assets to be determined by the insurer. This measure may be taken when the institution incurs any of the situations described in paragraphs (a) and (c) to (g) of paragraph 1 above and also, if the Directorate-General for Insurance and Pension Funds considers that the financial position the insurance undertaking is to continue to deteriorate, in the cases referred to in subparagraph (b) of that paragraph 1. This measure can be completed with the following:

1. The deposit of securities and other movable property or the management of real estate by persons accepted by the General Directorate of Insurance and Pension Funds.

2. The need to ensure that the prohibition on disposal is effective against third parties by notifying the credit institutions of cash or securities and the preventive annotation of the prohibition to dispose of the relevant public records; for these purposes, the resolution of the Directorate-General for Insurance and Pension Funds, in which the said prohibition of provision is agreed, shall be entitled. During the period of validity of the preventive entry, no legal rights shall be registered in the public registers or any judicial orders or administrative provisions of the embargo may be entered.

3. The request to the supervisory authorities of the other Member States of the European Economic Area to adopt on the assets of the insurance institution situated in their territory the same measures as the Directorate General Insurance and Pension Funds would have adopted.

(b) To require the insurance institution to establish a reorganisation plan to restore its financial position, in the case referred to in paragraph 1 (b), which shall be subject to the approval of the Directorate-General for Insurance and Pension Funds.

(c) Require a short-term financing plan to the insurance institution, which shall also be subject to the approval of the Directorate-General for Insurance and Pension Funds, in the case of paragraph (c) of that paragraph 1.

(d) In addition, in all cases of the adoption of special control measures and in order to safeguard the interests of the insured, it may take together or separately any of the following measures:

1. To suspend the hiring of new insurance or the acceptance of reinsurance.

2. It prohibits the extension of insurance contracts concluded by the insurance undertaking in all or some of the classes. For these purposes, the insurance undertaking must inform the insured persons in writing of the prohibition of the extension of the contract within 15 calendar days after receipt of the notification of this special control measure; in this case, the provided for in the second paragraph of Article 22 of Law 50/1980 of 8 October, under contract of insurance, shall be reduced to 15 calendar days. Irrespective of the written communication to the policyholders, the decision to adopt such a measure shall be published in the Official Journal of the State and in the Official Journal of the European Union.

3. It shall prohibit the insurance undertaking which, without prior authorisation from the Directorate-General for Insurance and Pension Funds, may carry out the acts of management and provision to be determined, distribute dividends, active branches and returns, hiring new insurance or admitting new partners.

4. To prohibit the exercise of the insurance activity abroad, when such activity contributes to the insurance institution being in one of the situations described in paragraph 1 above.

5. To require the insurance institution to carry out a rehabilitation plan in which it proposes appropriate administrative, financial or other measures, it shall make provision for the results and set the time limits for its implementation, to overcome the situation which gave rise to this requirement, which must be submitted for approval by the Directorate-General for Insurance and Pension Funds.

6. To order the managing director or similar administration to make known to the other administrative bodies the administrative decision taken and, where appropriate, the inspection report.

7. Call the administrative bodies or the board or general assembly of the insurance institution, and designate the person to chair the meeting and account for the situation.

8. Temporarily Replace the entity's administrative organs.

3. As a special control measure

complementary to the above, the General Directorate of Insurance and Pension Funds may agree to the intervention of the insurance institution to ensure its correct compliance.

The acts and agreements of any body of the insurance undertaking which are adopted as of the date of notification of the decision which agrees to the administrative intervention and which affect or are related to the measures of Special control referred to above shall not be valid and shall not be carried out without the express approval of the designated financial controller. The exercise of actions or resources by the institution that has been brought against the administrative and supervisory acts or in relation to the action of the financial controller is exempted from this approval.

Designated auditors shall have the power to revoke any powers or delegations conferred by the management body of the insurance undertaking or by its proxies prior to the date of publication of the agreement. If such a measure is adopted, the financial controller shall require the return of the documents in

the

proxies, as well as to promote the enrollment of their revocation in the corresponding public records.

4. The provisional replacement of the administrative bodies of the insurance undertaking shall be as follows:

(a) The administrative decision shall designate the person or persons to act as interim administrators and shall indicate whether they should do so jointly or severally. Such a decision, of an immediate executive nature, shall be published in the Official Gazette of the State and shall be entered in the relevant public registers, including, where appropriate, those existing in the other Member States of the Area. European Economic, publication which will determine the effectiveness of the resolution vis-à-vis third parties. The replacement of provisional administrators shall be subject to the same requirements and effects where it is necessary to proceed.

(b) Provisional administrators shall meet the requirements laid down in Article 15.

(c) Provisional administrators shall have the character of auditors, with the powers set out in paragraph 3, in respect of acts and agreements of the general meeting or assembly of the insurance undertaking.

(d) The obligation to draw up the annual accounts of the insurance undertaking and the approval of the insurance undertaking and the social management may be suspended for a period not exceeding one year from the expiry of the period of time. established for the purpose, if the Directorate-General for Insurance and Pension Funds estimates, at the request of the provisional administrators, that there is no reliable and complete data or documents for this purpose.

(e) Agreed by the Directorate-General for Insurance and Pension Funds to cease the temporary replacement measure of the entity's administrative bodies, the provisional administrators shall convene immediately the board or general assembly of the insurance undertaking, in which the new administrative body is appointed. Until the latter's inauguration, provisional administrators will continue to perform their duties.

(f) Provisional administrators may carry out their action on the territory of all the Member States of the European Economic Area, and may exercise in them the same functions and powers as in Spain. For these purposes, it shall be sufficient to certify the status of administrator of a certification of the decision to which the appointment is agreed. They may also grant powers of representation or request assistance, where this is necessary to carry out the implementation in the territory of other Member States of the European Economic Area of the measures taken and, in particular, to resolve the difficulties that the creditors resident in them might encounter. In any event, persons who attend or represent them must be of good repute and must meet the necessary conditions of qualification or professional experience to perform their duties, in accordance with Article 15 of this Law.

5. The adoption of special control measures shall be carried out in an administrative procedure carried out in accordance with the common rules or the rules of procedure for the management and supervision by inspection, as appropriate, with the following characteristics: both cases:

(a) Only one procedure shall be processed for each insurance undertaking in such a way that, if special control measures have been taken on an insurance undertaking and are necessary, pursuant to subsequent checks or inspections, to agree new measures, replacing or leaving without effect, in whole or in part, those already adopted, the ratification or cessation of such measures, as appropriate, shall be incorporated in the resolution in which the new special control measures are adopted.

b) Initiated the procedure for adoption of special control measures, the Directorate General of Insurance

and Pension Funds may adopt, as interim measures, those referred to in paragraphs (a) and (d) of paragraph 2 of this Article, provided that the requirements of Article 72 of Law No 30/1992 of 26 November 1992 are met. Legal status of public administrations and the common administrative procedure.

(c) Exceptionally, the hearing of the insurance undertaking concerned may be dispensed with where such a delay causes a delay in such a way as to seriously jeopardise the effectiveness of the measure taken, the rights of the insured persons or the economic interests concerned. In this case, the decision adopted by the special control measure must express the reasons which led to the urgency of its adoption and that measure must be ratified or left without effect in a procedure which is dealt with by the interested.

6. The special control measures shall be terminated without effect by resolution of the Directorate-General for Insurance and Pension Funds when the situations referred to in paragraph 1 of this Article have ceased to be adopted and, in addition, duly guaranteed the rights of insured persons, beneficiaries and injured parties.

7. In cases of non-compliance with the special control measures and without prejudice to the provisions of paragraph 4 of this Article, the Directorate-General for Insurance and Pension Funds may give them publicity, after hearing the institution. interested.

In addition, the acts of the insurance undertaking in breach of the special control measures shall apply the provisions of Article 4 (2

.

8. In all cases where, under the provisions of this law, the Directorate-General for Insurance and Pension Funds is to be appointed to the appointment of temporary administrators or financial controllers, direct compulsion may be made to the persons for the holding of the offices, books and documents concerned or for the examination of the latter.

9. Adopted by the Directorate-General for Insurance and Pension Funds, as provided for in the preceding paragraphs, either of the measures referred to in paragraphs (a), (b) and (c) of paragraph 2 or (2) (2) (2), (2), (2) and (2). Paragraph 3, as well as the prohibition on the distribution of dividends, active branches or returns, shall take effect, in accordance with the provisions of its legislation, in all Member States of the European Economic Area. For these purposes and without prejudice to the provisions of paragraph 2 (a) and 51 (3), the Directorate-General for Insurance and Pension Funds shall inform the supervisory authorities of the other Member States. the European Economic Area of the agreement to adopt the measure and its effects within 10 days of its adoption.

Such measures shall be governed by the provisions of this law and its implementing rules.

SECTION 5 RULE OF VIOLATIONS AND SANCTIONS

Article 40. Administrative violations.

1. Insurance institutions, including the dominant groups of consolidated groups of insurance entities within the terms defined in Article 20, the entities which, where appropriate, are required to formulate and approve the consolidated accounts and reports of such entities. groups, as well as natural persons or entities that are holders of significant holdings or have management or management positions in any of the above entities, and the liquidators of insurance entities, which are rules for the management and supervision of private insurance, shall incur liability sanctionable administrative provisions in accordance with the provisions of the following Articles.

They will be considered:

(a) Administration charges, administrators or members of the board of directors and management fees, their directors general or assimilated. It is understood by such persons who develop in the entity functions of senior management under the direct dependence of their administrative organ, executive commissions or delegated directors of that entity.

(b) Rules for the ordination and supervision of private insurance, which are covered by this law and its regulatory provisions for development and, in general, those contained in laws of a general nature containing precepts specifically referred to the insurance entities and the obligation to observe them.

2. Infringements of the rules for the management and supervision of private insurance are classified as very serious, serious and minor.

3. They will have serious infringements to be considered:

(a) The exercise of activities outside its legally determined exclusive object, unless it has a purely occasional or isolated character.

(b) The performance of acts or operations prohibited by law-enforcement or law-enforcement standards or with non-compliance with the requirements set out therein, unless it is of a purely occasional or isolated nature.

(c) The defect in the solvency margin in amounts greater than five percent of the corresponding amount and any insufficiency in the guarantee fund.

(d) The defect in the calculation or the insufficiency of investments for coverage of technical provisions in excess of 10 percent.

e) The lack of legally required accounting or carrying it with substantial anomalies that prevent or make it difficult to know the economic, patrimonial and financial situation of the entity, as well as the non-compliance of the the obligation to submit their annual accounts to audit accounts in accordance with existing legislation.

(f) The acquisition or increase of significant participation in an insurance institution in breach of the provisions of Article 22.

g) jeopardise the sound and prudent management of an insurance undertaking by the influence exercised by the holder of a significant participation, as provided for in Article 22.6.

(h) The performance of abusive practices, other than those classified as administrative offences in Law 16/1989 of 17 July, of the Defense of Competition, which harm the right of insured persons, beneficiaries, injured third parties or other insurance entities.

i) The transfer of portfolio, transformation, merger and division of insurance entities without the required authorisation or, where granted, without adjustment to it.

j) Non-compliance with the special control measures adopted by the Directorate-General for Insurance and Pension Funds in accordance with Article 39.

k) The repeated non-compliance with the agreements or resolutions emanating from the General Directorate of Insurance and Pension Funds.

l) The lack of referral to the General Directorate of Insurance and Pension Funds for how much data or docu

must be supplied by the insurance institution, already by means of its periodic presentation, already by the attention of individual requirements directed to it by the aforementioned Directorate General in the exercise of its functions, or the lack of (a) the accuracy of the claims, where the assessment of the solvency of the insurance undertaking is made difficult. For the purposes of this paragraph, it shall be understood that there is a lack of referral where it does not occur within the time limit granted for the purpose by the Directorate-General for Insurance and Pension Funds when recalling in writing the obligation of regular or reiterate the individualized requirement.

m) The excuse, refusal or resistance to the performance of the inspector, provided that I measure the express and written requirements in this respect.

n) Reign unduly, without entering into the deadline, the surcharges collected in favor of the Insurance Compensation Consortium.

n) Failure to comply with the duty of information due to its partners, the insured and the general public, provided that, by the number of persons concerned or by the importance of the information, such non-compliance can be estimated as especially relevant.

o) the execution of fraudulent or simulated business or the use of natural or legal persons brought in for the purpose of obtaining a result, the direct obtaining of which would involve the commission of at least one serious violation.

p) Serious infringements, where during the five years prior to their commission, the insurance institution has been imposed for a firm penalty for a serious infringement as defined in the same paragraph of paragraph 4 of this Article.

(q) Present deficiencies in the administrative and accounting organisation, or in internal control procedures, including those relating to risk management, where such deficiencies endanger the solvency or viability of the accounting officer; of the insurer.

4. They will be considered serious infringements:

a) The exercise merely occasional or isolated from activities outside its legally determined exclusive object.

(b) The mere occasional or isolated conduct of acts or operations prohibited by law-enforcement or law-enforcement rules, or with non-compliance with the requirements laid down in them.

c) The defect in the solvency margin at a value of less than five percent of the corresponding amount.

(d) The default in the calculation or insufficiency of investments for coverage of technical provisions in amounts exceeding five per cent, but less than 10 per cent.

e) Failure to comply with the existing rules on accounting for transactions, balance sheet formulation and profit and loss accounts, provided that it does not constitute a very serious infringement pursuant to paragraph (e) of the paragraph prior to that, as well as those relating to the preparation of the financial statements required to be communicated to the Directorate-General for Insurance and Pension Funds.

(f) The absence of notices and information required by the Directorate-General for Insurance and Pension Funds, as well as the failure to make available the documentation required by management rules and supervision with a range of law, provided that it does not constitute a very serious infringement.

g) Disattention to the requirement or prohibition agreed by the Directorate-General for Insurance and Pension Funds pursuant to Article 25 (5).

(h) Non-compliance by the insurer of the mandatory rules contained in Articles 3, 5, 8, 10, 12, 15, 18, 19, 20, 22, 76, 88, 94, 95, 96, 97 and 99 of Law 50/1980 of 8 October of insurance contract, when such conduct has a repetitive character. For these purposes, it is understood that the conduct is repetitive when, during the two years prior to its commission, 10 or more requirements referred to in paragraph 5 (b) of this article have been disregarded.

i) Not to provide the Directorate-General for Insurance and Pension Funds with the necessary documentation and information, within the time limits and in certain regulations, to permit the updated conduct of the records administrative provisions of Article 74.

(j) In the case of insurance institutions in liquidation, the non-compliance by the liquidators of the obligations imposed on them by Article 28.3, as well as the unjustified non-compliance by those who have been charged with management or management in the five years prior to the date of dissolution, of its obligation to cooperate with the liquidators in the settlement acts relating to the operations of the period in which they performed such charges.

k) The merely occasional or isolated breach of agreements or resolutions emanating from the General Directorate of Insurance and Pension Funds.

l) The lack of referral to the Directorate-General for Insurance and Pension Funds of how much data or documents the insurance institution must provide to it, by its periodic submission, already through the attention of requirements (a) the individual who directs the said Directorate-General in the performance of his/her duties, as well as the lack of accuracy in those functions, unless this is the case for a very serious infringement.

For the purposes of this paragraph, it shall be understood that there is a lack of remission when it does not occur within the time limit set in the regulatory rules of the periodic submission or the time limit granted to the effect in formulating the requirement. individualised.

m) The excuse, refusal or resistance to the inspector's performance, when it does not constitute a very serious infringement.

n) Not to collect in the form and term from, to do so improperly and, in general, to breach its obligations of mandatory collection of the surcharges legally enforceable in favor of the Consortium of Compensation of Insurance.

n) Failure to comply with the duty of information due to its members, the insured or the general public, where the circumstances referred to in paragraph 3 (n) are not met, as well as the performance of any acts or operations with non-compliance with the regulatory standards for the advertising and reporting of insurance companies.

or) The performance of fraudulent acts or simulated business or the use of natural or legal persons brought in for the purpose of achieving a result contrary to the rules of ordination and supervision with the rank of law, provided that such conduct is not covered by subparagraph (o) of paragraph 3.

p) The minor infractions, when during the two years prior to their commission, a firm sanction for any minor infringement would have been imposed on the insurer.

(q) Present deficiencies in the administrative and accounting organization, or in internal control procedures, including those relating to risk management, after the period granted for the purpose of the risk management has elapsed. (

) the right to provide services to the competent authorities of the Member State in which the competent authorities are responsible;

5. They will have the consideration of minor infractions:

(a) The defect in the calculation or insufficiency of investments for coverage of technical provisions at a value of less than 5%.

(b) Non-compliance by the insurer of the mandatory rules contained in Articles 3, 5, 8, 10, 12, 15, 18, 19, 20, 22, 76, 88, 94, 95, 96, 97 and 99 of Law 50/1980 of 8 October of insurance contract, if not Within one month, the requirement that the General Directorate of Insurance and Pension Funds should have the effect of when the complaints and complaints referred to in the regulations on the protection of service clients are founded. financial.

(c) In general, non-compliance with mandatory requirements for insurance companies covered by rules for the management and supervision of private insurance with a range of law, provided that they do not constitute an infringement serious or very serious in accordance with the provisions of the previous two paragraphs.

Article 41. Administrative penalties.

1. The commission of very serious infringements shall, in any event, impose on the insurance undertaking one of the following penalties:

a) Revocation of the administrative authority.

(b) Suspension of the administrative authorisation to operate in one or more classes where the insurance undertaking is authorised, for a period not exceeding 10 years nor less than five years.

c) Give publicity to the constitutive conduct of the very serious infringement.

d) Multa for up to one percent of its own funds, or from 150,000 to 300,000 euros if that percentage was less than 150,000 euros.

By way of derogation from this paragraph, in the case of the imposition of the penalties provided for in paragraphs (a), (b) and (d), the penalty provided for in paragraph (c) may be imposed at the same time.

2. For the commission of serious infringements, one of the following penalties shall be imposed on the insurance undertaking:

(a) Suspension of administrative authorisation to operate in one or more classes over a period of up to five years.

b) Give publicity to the constitutive conduct of the serious infringement.

c) Multa per amount from 30,000 to 150,000 euros.

By way of derogation from this paragraph, in the case of the imposition of the penalties provided for in paragraphs (a) and (c), the penalty provided for in paragraph (b) may be imposed at the same time.

3. For the commission of minor infractions, the insurance institution shall be imposed the penalty of fine, which may be reached up to the amount of 30,000 euros or the amount of private admonition.

Article 42. Responsibility of those who are in charge of administration and management.

1. Those who exercise in the insurance undertaking and other entities listed in Article 40.1 administrative or management positions shall be liable for any serious or serious infringements committed by them, where they are attributable to their intentional conduct or negligent, except for the offence referred to in Article 40.4.j), which shall be directly imputable to the latter.

2. For the purposes of the preceding paragraph, they shall not be held liable for the very serious or serious infringements committed by the insurance institutions and other entities listed in Article 40.1 who exercise administration, in the following cases:

(a) Where those who are part of the collective management bodies have not been assisted by reason of the corresponding meetings or have voted against or have saved their vote in respect of decisions or agreements which would have resulted in the infringements.

(b) Where such offences are solely attributable to executive committees, delegated members, directors-general or similar bodies, or other persons with managerial functions in the institution.

3. Regardless of the sanction that

It is appropriate to impose upon the entity, by the commission of very serious infractions, one of the following sanctions may be imposed on those who exercise administration, in fact or in law or direction in it, and are responsible of such infringements:

a) Separation of the charge, with disablement to exercise management or management fees at any insurance institution, for a maximum period of 10 years.

(b) Temporary suspension in the exercise of the term of office of not less than one year and not more than five years.

(c) Multa, for each of them, for an amount not exceeding EUR 90,000.

By way of derogation from this paragraph, in the case of the imposition of the penalty provided for in subparagraph (a), the penalty provided for in paragraph (c) may be imposed at the same time.

4. Regardless of the sanction that

It is appropriate to impose on the entity, by the commission of serious infractions, one of the following sanctions may be imposed on those who exercise positions of administration of fact or of law, or of direction in it, and are responsible for the violation:

(a) Temporary suspension in the exercise of the term of office not exceeding one year.

(b) Multa, for each of them, for an amount not exceeding EUR 45,000. This penalty may be imposed at the same time as provided for in subparagraph (a) above.

c) Private installation.

d) Public assembly.

Article 43. Criteria for the graduation of sanctions.

1. The penalties applicable in each case for the commission of very serious, serious or minor infringements shall be determined on the basis of the following criteria:

a) The nature and entity of the infringement, as well as the degree of intentionality in your commission.

b) The severity of the hazard created or the damage caused.

(c) The gains obtained, if any, as a result of the acts or omissions constituting the infringement.

d) The circumstance of having proceeded to the sub-healing of the infringement on its own initiative.

e) The importance of the offending insurer, measured on the basis of the total amount of its balance sheet and its volume of premiums in the last financial year before the commission of the infringement.

(f) In the case of insufficient solvency margin, guarantee fund and technical provisions, any objective difficulties that may have been encountered in order to achieve or maintain the legally required level.

g) The class or classes to which the offence committed is particularly affected, where appropriate.

h) The entity's previous conduct in relation to the rules of management and supervision affecting it, having already taken care of the reiteration in the commission of violations during the last five years, already to the rein

cidency by commission of more than one infringement of the same nature within one year when, in one and another case, they have been declared by firm resolution.

i) The unfavorable consequences of the facts for the insurance sector, the financial system or the national economy.

2. In order to determine the penalty applicable to those provided for in Article 42 (3) and (4), the following circumstances shall also be taken into account:

(a) The degree of responsibility in the facts that the data subject concurs.

b) The scope of the representation of the person concerned in the insurance institution.

(c) The prior conduct of the data subject, in the same or other insurance institution, in relation to the rules of management and supervision, if it incurs reiteration or recidivism. For these purposes, the conduct described in paragraph 1 (h) shall be repeated or repeated.

3. For the purposes of graduation of the penalties, they shall be divided into three equal periods of time or equal tranches of the pecuniary amount comprising the penalty imposed, forming a degree of each of the three periods or tranches. On this basis, the following rules shall be observed for the imposition of the penalties, according to whether or not the determining circumstances of the application of attenuation or aggravation criteria are applied:

(a) Where in the very serious infringements there are more than two circumstances of aggravation and at least two of them are highly qualified, the penalty provided for in Article 41.1 (a) shall be imposed and, where applicable, 42.3.a). For graduation in the latter, it shall be attended, in accordance with the criteria of paragraphs (c) and following, to the concurrence of other circumstances other than the two highly qualified aggravations determining the imposition of this sanction.

b) Where in serious and serious infringements there are circumstances of aggravation and at least one of them is highly qualified, the penalties provided for in Article 4 (1) (b) or (2) (a) shall be imposed and, where appropriate, those of the Article 2 (3) (b) or (4) (a), respectively, provided that the circumstances of the application of the provisions of paragraph (a) above are not met in the very serious infringements. In addition, in all cases and in accordance with the criteria of the following paragraphs, the graduation of the sanction will be attended to the concurrence of other circumstances other than that of a very qualified aggravation determining the imposition of these penalties.

(c) Where only one circumstance of aggravation is present, the penalty shall be imposed in the middle grade, and if several, in the maximum degree.

d) When there are circumstances of aggravation and attenuation, they will be rationally compensated for the determination of the penalty, graduating the value of nails and others.

(e) Where there is no mitigation or aggravation circumstances or where only an attenuation circumstance is present, the penalty shall be imposed to the minimum degree.

(f) Where the circumstances of attenuation or a single qualified person are two or more and no aggravating circumstances arise, the penalty for the infringement of the lower class shall be imposed and shall apply to the degree of it is considered relevant according to the entity and number of such circumstances.

(g) Within the limits of each degree, the extent of the penalty shall be determined and, in cases where it is possible under Articles 41 and 42, the simultaneous imposition of two penalties, taking into account all of the criteria referred to in paragraph 1 above.

Article 44. Measures inherent in the imposition of administrative sanctions.

1. The body imposing the sanction may require the offender to replace the situation with the change to its original state within the time limit which is determined.

2. Also, in the event that, by the number and class of persons affected by the separation or suspension sanctions, it is necessary to ensure continuity in the management and management of the insurance undertaking, the body which The penalty may provide for the appointment, on a provisional basis, of one or more administrators or members who are required to be able to adopt agreements by the collegiate body of administration, indicating their roles in both cases. The provisional administrators shall be governed by the provisions of Article 39.4 (a) and (b) and shall exercise their positions until, by the competent body of the insurance undertaking, which must be immediately convened, the corresponding appointments and take possession of the appointees or, where appropriate, until the period of separation or suspension.

3. The imposition of the penalties shall be recorded in the administrative register of the insurance institutions and in the register of the high offices of the insurance institutions and, once they are executive, they shall be the subject of communication to the immediate meeting or assembly. general to be held; the separation of the charge and suspension, also, once they are executive, shall also be recorded in the Commercial Register and, where applicable, in the Register of Cooperatives.

Article 45. Limitation of infringements and penalties.

1. Very serious and serious infractions will be prescribed at five years, and mild, at two years.

The limitation period for infringements will begin to be counted from the day the infringement was committed. In the case of infringements resulting from an ongoing activity, the initial date of the calculation shall be the date of completion of the activity or of the last act with which the infringement is consumed.

Interrupt the prescription of the initiation, with the knowledge of the person concerned, of the sanctioning procedure, and the limitation period will be resumed if the sanctioning file is paralyzed more than one month for not imputable cause to the alleged person responsible.

2. Penalties for very serious and serious breaches will be prescribed at five years, and penalties for minor infractions will take them at two years.

The limitation period for the penalties shall begin to be counted from the day following the day on which the decision imposing the sanction or, where applicable, the breach of the sanction imposed, if it is imposed, is final. would have started to be met.

Interrupt the prescription of the initiation, with the knowledge of the person concerned, of the execution of the sanction, and the deadline will elapse again if such execution is paralyzed for more than one month for cause not imputable to the infringer.

Article 46. Administrative powers.

The jurisdiction for the instruction of the files and for the imposition of the corresponding penalties shall be governed by the following rules:

(a) The body of the Directorate-General for Insurance and Pension Funds which is to be determined shall be responsible for the instruction of the files.

(b) The imposition of penalties for serious and minor infringements shall be the responsibility of the Director-General of Insurance and Pension Funds.

c) The imposition of penalties for very serious infringements shall be the responsibility of the Minister for Economic Affairs and Finance, on a proposal from the Directorate-General for Insurance and Pension Funds, except for the withdrawal of the authorisation, which is The Council of Ministers will impose it.

Article 47. Additional rules for the exercise of sanctioning powers.

1. The exercise of the sanctioning power referred to in this law shall be independent of the possible concurrency of crimes or offences of a criminal nature. However, where it is considered that the facts could constitute a crime and have been brought to the attention of the judicial authority or the Prosecutor's Office, or when a criminal proceedings are being carried out for the same facts or for others whose separation of the penalties under this law is rationally impossible, the administrative penalty procedure shall be suspended with respect to those until the final pronouncement of the judicial authority. If there is a place to resume the administrative penalty procedure, the decision to be taken shall respect the assessment of the facts contained in the judgment.

2. In the case of insurance entities extinguished by merger, division or dissolution, the administrative responsibility for infringements and penalties in the field of the management and supervision of private insurance shall be payable to those who have Administrative or management positions in them even if they are not sanctioned.

Article 48. Exercise of activities and use of names reserved for insurance companies.

1. Persons or entities carrying out insurance or reinsurance operations without the required administrative authorization or using the names of the insurance institutions, without being so, shall be penalised simultaneously with the the penalties provided for in paragraphs (c) and (d) of Article 41.1 and those who pursue administration or management positions in them, in the case of entities, shall be subject to the penalties provided for in Article 42.3. If, in order to cease immediately in the performance of activities or in the use of the denominations, they will continue to be carried out or used, they will be sanctioned in the same way, which may be reiterated on the occasion of each of the the subsequent requirements to be formulated.

2. It shall be competent for the imposition of penalties and for the formulation of the requirements referred to in the previous paragraph by the Director-General for Insurance and Pension Funds. The requirements shall be made after the hearing of the person or entity concerned and the fines shall be imposed in accordance with the applicable procedure for the imposition of the penalties on the insurance institutions.

3. The provisions of this Article shall be without prejudice to other responsibilities, including criminal law, which may be enforceable.

CHAPTER IV

The activity under the right of establishment and the freedom to provide services in the European Economic Area.

SECTION 1

Article 49. Authorised insurance entities.

1. The Spanish insurance companies which have obtained the authorisation valid throughout the European Economic Area in accordance with Article 5 may exercise, on the same terms as the authorisation granted, their activities under the law of establishment or free provision of services throughout the territory of the European Economic Area.

2. The provisions of the paragraph above shall not apply to:

(a) Insurance operations when the risks are covered by the Insurance Compensation Consortium.

b) The following life insurance operations:

1. Those made by mutual insurance companies which, at the same time, provide in their statutes the possibility of proceeding to discounts for additional contribution, or to reduce the benefits or to request the help of other persons who have entered into a commitment to this end, and receive an annual amount of the contributions in accordance with the life risk forecast that for three consecutive years does not exceed EUR 500,000.

2. Those of the forecasting and assistance entities that grant variable benefits according to the available resources and determine the contribution of their partners or unit-holders.

c) The following different life insurance operations:

1. The ones made by provident institutions whose benefits vary according to the resources available and in which the contribution of the members is determined on a flat-rate basis.

2. The number of organisations without legal personality having as their object the mutual guarantee of their members, without giving rise to the payment of premiums or the establishment of technical provisions.

3. The ones performed by insurance mutual on which the following conditions are simultaneously met:

that its statutes provide for the possibility of carrying out quotas or reducing benefits, that its activity does not cover risks of civil liability, unless it constitutes an ancillary risk, or the risks of credit and (a) the annual amount of the fees charged for insurance operations does not exceed EUR 1,000,000, and, finally, that at least half of the fees are paid by persons affiliated to the mutual fund.

4. Cations made by mutual insurance undertakings which have concluded an agreement with another mutual on the full reinsurance of the insurance contracts which they have concluded or the replacement of the mutual transferee by the transferor for the execution of the commitments resulting from such contracts.

5. The number of export credit insurance on behalf of or with the support of the State.

6. The number of deaths.

7. Undertakings Carried out by entities operating solely in the field of assistance, where their activity is limited to part of the national territory, their benefits are in kind and their annual amount of income does not exceed EUR 200,000.

Article 50. Disposal of portfolio.

1. The transfer of a portfolio by a Spanish insurance institution to contracts entered into under the right of establishment or under the freedom to provide services or which, by virtue of the transfer, are to be subscribed to in any of the two schemes, to a transferee domiciled in the European Economic Area, including Spain, or to branches of the transferee established in that area, shall specify the conformity of the supervisory authority of the Member State of the undertaking or the location of the risk, the certification that the transferee has, in view of the cession, the the necessary solvency margin, issued by the supervisory authority of the Member State of origin of the transferee, and in the contracts entered into under the right of establishment, of the consultation of the supervisory authority of the Member State of the Transferor branch.

2. If the Member States do not reply to the requests for conformity, certification and consultation within three months of their receipt, such conformity shall be deemed to have been granted, issued the certification and evacuated the consultation, respectively.

3. Policy holders shall have the right to terminate the insurance contracts affected by the transfer of the regulated portfolio in this provision and, in all other cases, that transfer of portfolio shall be in accordance with Article 23.

Article 51. Intervention measures.

1. The withdrawal of the administrative authorisation from a Spanish insurance undertaking operating under the right of establishment or under the freedom to provide services shall be notified by the Directorate-General for Insurance and Pension Funds. the supervisory authorities of the other Member States. In this case and in order to safeguard the interests of the insured, in collaboration with the authorities concerned, it may adopt the special control measures provided for in Article 39.

2. If the Spanish insurance undertaking is dissolved, the obligations arising out of contracts concluded under the right of establishment and under the freedom to provide services shall be treated in the same way as the obligations which the other insurance contracts of the institution in liquidation, irrespective of nationality of the policyholders, insured persons and beneficiaries.

Regarding the convening of these creditors and the exercise of their rights, the provisions of Article 28.3.c shall apply.

3. If the measure of special control of the prohibition on the disposal of goods on a Spanish insurance undertaking operating in other Member States under the right of establishment or under the freedom to provide services is adopted, the Directorate-General for Insurance and Pension Funds shall inform the supervisory authorities of the other Member States and, where appropriate, request, in accordance with Article 39 (2) (a), that they adopt the same measures in respect of the goods located on their territory that the Directorate-General for Insurance and Pension Funds has adopted.

Article 52. Duty of information to the Ministry of Economy and Finance.

Spanish insurance companies operating under the right of establishment or under the freedom to provide services must report to the Directorate-General for Insurance and Pension Funds separately for the purposes of the operations carried out in each Member State of the European Economic Area under the right of establishment and under the freedom to provide services, on its activity in the terms, form and periodicity which it regulates determine.

The Directorate-General for Insurance and Pension Funds shall provide such information, on an aggregated basis, to the supervisory authorities of the Member States concerned upon request.

Reglamentarily, the scope of this information provision will be realized.

Article 53. Duty of information to the policyholder.

1. Prior to the conclusion by a Spanish insurance undertaking of an insurance contract, other than the insurance contract for major risks, under the right of establishment or under the freedom to provide services, it shall inform the holder of the contract. the insurance that is domiciled in Spain or, if applicable, the branch with which the contract is to be concluded, which must also be stated in the documents which are, if necessary, delivered to the policyholder or to the insured persons.

2. The policy and any other document in which any insurance contract is formalised under the right of establishment or under the freedom to provide services, including insurance contracts for major risks, shall indicate the of the registered office or, as the case may be, the branch of the Spanish insurance undertaking providing the cover; and, in the case of contracts for liability insurance in motor vehicles, excluding liability for the Carrier, concluded under the freedom to provide services, must be recorded also the name and address of the representative referred to in Article 86.2, where required by the Member State where the risk is located.

Article 54. General remission.

In all other cases, and in the absence of the provisions specifically laid down in Articles 55 and 56, Spanish insurance companies operating under the right of establishment or under the freedom to provide services comply with the provisions of this Title II, with the exception of the provisions of Article 25.6.a) and in Article 23.4 of the recast of the Legal Statute of the Insurance Compensation Consortium, approved by the Royal Legislative Decree 7/2004, of 29 October.

SECTION 2. ESTABLISHMENT OF THE RIGHT OF ESTABLISHMENT

Article 55. Establishment of branches.

1. Any Spanish insurance undertaking which proposes to establish a branch in the territory of another Member State of the European Economic Area shall notify it in the Directorate-General for Insurance and Pension Funds, accompanying the following: information:

(a) The name of the Member State in whose territory the branch is proposed to be established.

(b) Your programme of activities, in which the operations you intend to carry out and the structure of the organisation of the branch are indicated in particular.

c) The address in the Member State of the branch where they can claim and deliver the documents to you.

d) The name of the branch's general manager, who must be endowed with sufficient powers to

obligate the insurer to third parties and represent it to the authorities and judicial bodies of the Member State of the branch.

e) If the entity intends to have its branch cover the risks of the civil liability class in motor vehicles, excluding the liability of the carrier, it shall declare that it has been associated with the national office and the national guarantee fund of the Member State of the branch.

(f) If the entity intends to have its branch cover the risks of the legal defence branch, it shall indicate the option chosen, among the different management modalities provided for in Article 5.2.h.).

2. Within three months of the receipt of the information referred to in paragraph 1, the Directorate-General for Insurance and Pension Funds shall communicate it to the supervisory authority of the Member State of the branch and shall accompany a certification that the insurance institution has the minimum legally enforceable solvency margin and is not subject to the financial recovery plan provided for in Article 38.2, and shall inform the institution of such communication. insurer.

The Directorate-General for Insurance and Pension Funds may refuse to release such information when, in the light of the documentation submitted by the insurer, it has reason to doubt the suitability of the structure the organisation, the financial situation of the insurance undertaking, or the good repute and qualifications or professional experience of the managers responsible or the general manager.

The refusal to communicate the information to the Member State of the branch shall be notified to the insurance undertaking. Both this refusal and the lack of communication of the information within three months, with the consideration of an alleged act in which the application may be deemed to be dismissed, shall be of a nature as to the administrative acts which may be used.

3. If the supervisory authority of the Member State of the branch indicates to the Directorate-General for Insurance and Pension Funds the conditions under which, for reasons of general interest, those activities must be carried out in that State. Member of the branch, that Directorate-General shall communicate it to the insurance undertaking concerned.

4. The insurance undertaking may establish the branch and commence its activities since it receives the communication from the supervisory authority of the Member State of the branch or, failing that, over the period of two months from the date of the receipt of the communication from the Directorate-General for Insurance and Pension Funds referred to in paragraph 2 of this Article.

5. The modification of the content of any of the data reported in accordance with paragraph 1 (b), (c) or (d) shall be in accordance with the provisions of the preceding paragraphs, but the insurance institution shall also notify the State of the Member of the branch in which it is established, and both the Directorate-General for Insurance and Pension Funds shall have a common period of one month to carry out the tasks assigned to them by the preceding paragraphs.

6. The obligation to keep the documentation at the registered office under Article 25.7 shall be understood as referring to the address of the branch.

SECTION 3. FREEDOM TO PROVIDE SERVICES

Article 56. Activities under the freedom to provide services.

1. Any Spanish insurance undertaking which intends to exercise for the first time in one or more Member States of the European Economic Area activities under the freedom to provide services shall inform in advance of its project in the Directorate-General General Insurance and Pension Funds, indicating the nature of the risks or commitments you intend to cover.

2. The Directorate-General for Insurance and Pension Funds shall, within one month of the receipt of the information, communicate it to the Member State (s) on whose territory the insurance undertaking is proposed to carry out its activities in the freedom to provide services, and shall indicate:

(a) that the insurer has the minimum solvency margin and is not subject to the financial recovery plan provided for in Article 38.2.

(b) The classes in which the insurer is authorised to operate.

(c) The nature of the risks or commitments that the insurance undertaking intends to cover in the Member State of the freedom to provide services.

(d) If the entity intends to cover the risks of the civil liability class in motor vehicles, excluding the liability of the carrier, the entity's declaration that it has been associated with the national office and the national guarantee fund of the Member State of freedom to provide services, as well as the name and address of the representative referred to in Article 86.2.

e) If the entity intends to cover the risks of the legal defence branch, the choice between the different management modalities provided for in Article 5.2.h.

This last information, as well as the previous one in paragraph (d), shall be provided by the entity together with that referred to in paragraph 1 of this Article.

3. The insurance undertaking may start its business from the date on which the Directorate-General for Insurance and Pension Funds notifies you that it has submitted the communication referred to in the previous paragraph.

4. Any modification of the nature of the risks or commitments that the insurance undertaking intends to cover under the freedom to provide services shall be in accordance with the provisions of the preceding paragraphs of this Article.

CHAPTER V

Reinsurance

Article 57. Reinsurers entities.

1. They may only accept reinsurance operations:

(a) Spanish public limited companies having as their sole purpose reinsurance.

(b) Insurance companies which are authorised for the practice of direct insurance in Spain, in the same classes as those authorised under the same legal system.

(c) Foreign reinsurance entities or groupings of foreign reinsurance undertakings operating in their own country and establishing a branch in Spain.

(d) foreign insurance and reinsurance entities, or groups thereof, which operate in their own country and do not have a branch in Spain or which, having such a branch, accept them from their registered office or, in the case of entities domiciled in the European Economic Area, from branches established in any of the Member States.

2. The entities referred to in subparagraph (a) and the branches referred to in subparagraph (c) of the preceding paragraph.

will require authorization from the Minister of Economy and Finance, in order to obtain the necessary requirements for direct insurance entities, in the form that is established in regulation. The authorisation shall determine the registration in the administrative register of insurance institutions.

3. The entities referred to in paragraph 2 shall be required to constitute, calculate, account for and reverse the technical provisions and, where appropriate, have the solvency margin in the form that

be determined. In addition, the rules contained in Articles 15, 18, 19, 20, 21, 22, 26, 27, 28 and 31 to 48 of this Law, as well as those contained in Articles 14 and 23.4 of the recast of the Legal Statute of the Compensation Consortium, shall apply to them. Insurance, approved by the Royal Legislative Decree 7/2004, of October 29.

4. Exclusively reinsurer entities may not extend their management close to policyholders or policyholders.

5. The directors of the companies defined in paragraph 1 (a) of this Article are obliged to make, within the maximum period of six months from the closure of the social year, the annual accounts, the management report and the proposal. of the result; and the ordinary general meeting of these entities, previously convened for the purpose, will necessarily meet within three months of the date of the aforementioned formulation by the administrators to censor the social management, approve, where appropriate, the accounts of the previous financial year and resolve the application of the result.

Article 58. Retention sessions.

Insurance and reinsurance entities shall establish their reinsurance plans in such a way that the corresponding retention periods are related to their economic capacity for the appropriate technical-financial balance of the entity.

CHAPTER VI

Securing the insured

Article 59. Ranking of credits.

1. The claims of insured persons, beneficiaries and injured parties as referred to in Article 73 of Law 50/1980 of 8 October of 8 October 1980 on insurance contracts shall be of absolute priority over all other claims against the insurance undertaking in respect of assets which, representing technical provisions, are incorporated in the investment register.

2. In respect of claims against the insurance institution which do not enjoy the priority referred to in the preceding paragraph, the system of precedence laid down in Law 22/2003 of 9 July, Consurety, which is also a rule, shall apply. of subsidiary application in everything not regulated in this law.

3. In addition to the preference laid down in paragraph 1 of this Article, the goods in respect of which the special control measure for the prohibition of disposal provided for in Article 39.2 (a) has been adopted, even if such a measure has not been the subject of registration, shall be affected to satisfy the claims referred to in paragraph 1, except for any other than those guaranteed with real law registered or an embargo applied prior to the date on which the the measure is entered in the corresponding records.

This preference will also apply to the credits of those who have concluded with the insurance entities contracts affected by the provisions of Article 4.2 and the second paragraph of Article 39.7 of this Law.

Article 60. Duty of information to the taker.

1. Before concluding an insurance contract, the insurance undertaking shall inform the policyholder of the Member State and the authority to which the control of the activity of the insurance undertaking itself corresponds, which shall also be included in the the policy and any other document in which any insurance contract is formalized.

2. Before concluding an insurance contract other than life insurance, if the policyholder is a natural person, or any life insurance contract, the insurance undertaking shall inform the taker of the law applicable to the contract, on the provisions relating to claims which may be made and on other extremes to be determined in a regulated manner.

3. Where the insurance contract is to be concluded within the framework of a system for the provision of services at a distance organised by the insurer using exclusively one or more distance communication techniques until the conclusion of the insurance contract the contract, and the holder is a natural person acting for a purpose other than a commercial or professional activity, in addition to the information provided for in the preceding paragraphs, must be informed of the existence, where appropriate, of the right of the termination referred to in Articles 6a and 83.a of Law 50/1980 of 8 October of the insurance, and its form of exercise, as well as the procedure to be followed for the conclusion of the contract and other extremes to be established.

In any case, in life insurance in which the policyholder assumes the risk of investment, it will be clearly and accurately reported that the amount to be collected depends on fluctuations in the financial markets, which are not control of the insurer and whose historical results are not indicators of future results.

4. All the information referred to in the preceding paragraph, as well as the contractual terms, shall be made by the insurer at the disposal of the holder in a durable medium accessible to the taker in good time at the time when he is assume any obligation arising from the insurance contract.

Where the contract has been concluded at the request of the taker using a distance communication technique that does not allow the contractual conditions and information prior to the conclusion of the contract to be transmitted on a support Durable and accessible to the taker, the insurer shall comply immediately after the conclusion of the insurance contract with the obligations referred to in the preceding paragraph.

At any time in the contractual relationship the taker shall be entitled to obtain the contractual conditions on paper and to change the distance communication techniques used.

5. For the purposes of paragraphs 3 and 4 above,

following definitions shall apply:

(a) Distance communication technique: any means that can be used for the conclusion of an insurance contract between the insurer and the taker without a simultaneous physical presence of the parties.

(b) Lasting support: any instrument that allows the storage of information so that it can be easily recovered for a period of time appropriate to the purposes for which such information is intended and enables its Unchanged playback.

6. For the duration of the life insurance contract, the insurance undertaking shall inform the taker of the changes in the information initially provided and also of the status of its participation in the contract. benefits, in terms and time limits that are determined to be determined.

Article 61. Conflict resolution mechanisms.

1. Disputes that may arise between policyholders, policyholders, beneficiaries, injured parties or persons entitled to any of them with insurance undertakings shall be settled by the competent judges and courts.

2. They may also voluntarily submit their differences to an arbitration decision in accordance with Article 31 of Law 26/1984 of 19 July, General for the Defence of Consumers and Users, and their implementing rules.

3. In any event, and without prejudice to the provisions of the foregoing paragraph, they may also submit to arbitration the questions of litigation, arising or that may arise, in the matter of their free disposition under the law, in the terms of the Law 60/2003, of December 23, of Arbitration.

Article 62. Administrative protection.

1. The Ministry of Economy and Finance will protect the freedom of policyholders to decide on the hiring of insurance and the maintenance of the contractual balance in the insurance contracts already concluded.

2. The administrative protection in the field of private insurance will be governed by the current regulations on the protection of clients of financial services, contained in Law 44/2002, of 22 November, of measures for the reform of the system financial, and its development standards.

3. Abusive practices and the disregard of the requirements of the Directorate-General for Insurance and Pension Funds referred to in Article 40.5.b) shall, as the case may be, give rise to the imposition of administrative penalties. for the offences referred to in Article 40.4.h) and 40.5.b) or for the prohibition laid down in Article 25.5.

Article 63. Department or customer service. Client defender.

In the terms provided for in the current regulations on the protection of clients of financial services, contained in Law 44/2002 of 22 November, of measures for the reform of the financial system, and in its implementing rules, Insurance companies will be obliged to address and resolve complaints and complaints that users of financial services may submit, related to their legally recognised interests and rights. For these purposes, institutions must have a customer service department or service in charge of addressing and resolving complaints and complaints.

CHAPTER VII

Social Welfare Mutuals

Article 64. Concept and requirements.

1. Social welfare insurance funds are insurance undertakings which exercise a voluntary insurance scheme in addition to the compulsory social security system, by means of contributions at fixed or variable premiums for the mutual societies, natural or legal persons, or other entities or persons who are protective.

In its name, the indication "Social Welfare Mutuality", which will be reserved for these entities, must necessarily be included.

When all of your mutual societies are employed, their protective partners or promoters are the companies, institutions or individual entrepreneurs in which they provide their services and benefits. which are granted only as a result of the provision of foresight agreements between them and those, it shall be understood that mutual society acts as an instrument of business social foresight.

2. The social object of the social welfare insurance funds shall be that set out in Article 11

However, social security mutual societies which comply with Article 67 may grant social benefits, provided that they meet the following requirements:

(a) That these benefits have been specifically authorised by the Directorate-General for Insurance and Pension Funds.

b) To maintain the activity of granting social benefits with absolute financial and accounting separation in respect of their insurance operations.

(c) That at all times they have the minimum mutual fund and have their financial guarantees properly constituted.

d) That the resources that you dedicate to the activity of social benefit be free of charge.

3. The social welfare insurance funds must meet the following requirements cumulatively:

a) Profit for profit.

(b) The condition of the policyholder or policyholder shall be inseparable from that of the mutualist.

(c) Establish equality of obligations and rights for all mutualists, without prejudice to the provision of contributions and benefits to the statutory relationship established with the circumstances of each of the mutualists; them. The rules set out in Article 9.2.c), e), (f) and (g) shall apply.

d) Limit the liability of the mutualists for social debts to a quantity of less than one third of the sum of the quotas which they would have satisfied in the last three years, irrespective of the quota for the financial year stream.

(e) The incorporation of mutualists into mutual societies shall in any case be voluntary and shall require an individual declaration from the applicant, or a general declaration derived from agreements adopted by the representative bodies of the cooperative or professional associations, except express opposition of the collegiate, without being able to set limits for entering the mutual society other than those provided for in their statutes for justified reasons.

(f) The incorporation of its mutualists may be carried out either directly by the mutual fund or through the insurance mediation activity, the latter as long as it meets the mutual fund requirements and guarantees Article 67 of the Financial Regulation However, the mutualists may participate in the incorporation of new members and in the management of the collection of the quotas; in this case, they may receive the appropriate financial compensation fixed in the statutory form.

g) Grant only the benefits listed in Article 65 and within the quantitative limits fixed in it.

h) They will directly take the guaranteed risks to their mutualists, without practicing co-insurance or reinsurance operations, but they will be able to perform

reinsurance transfer operations with insurance entities authorised to operate in Spain.

i) The remuneration of the directors for their management shall be part of the administrative costs, which may not exceed the limits set by the Ministry of Economy and Finance.

j) At least 50 mutualists shall be present in their constitution.

4. The federations or the National Confederation of Social Welfare Mutualities are entities of associative representation of the interests of the social welfare societies and in no case will they be able to carry out insurance activity.

They may, if they are duly authorized by the Directorate-General for Insurance and Pension Funds, provide common services related to the activity of social welfare mutual societies.

Article 65. Scope of coverage and benefits.

1. In the provision of risks to persons, the contingencies they may cover are those of death, widower, orphan's and retirement, and will guarantee economic benefits in the form of capital or income. They may also grant benefits on grounds of marriage, maternity, children and death. And they may carry out accident and invalidity insurance operations for work, sickness, legal protection and assistance, as well as provide family support for the provision of reasons for reasons of fact or legal acts which temporarily impede the exercise of the profession.

The financial benefits to be guaranteed may not exceed EUR 21,000 as an annual income or an actuarial equivalent as a single capital charge.

The limit provided for in the previous paragraph may be updated by the Minister for Economic Affairs and Finance, considering the adequacy of financial guarantees to meet the updated benefits.

However, for those mutual funds which are incurred in one of the situations referred to in Articles 27 or 39.1 of this Law, the new economic benefits to be guaranteed shall not exceed EUR 18,000 as Annual income of EUR 78,000 as a single capital charge.

2. In the provision of risk on matters, they may only ensure that they are listed below and within the quantitative amount of such goods:

(a) Housing of official protection and other social interests, provided that they are inhabited by the mutualist himself and his family.

b) Machinery, goods and work instruments of mutualists who are small entrepreneurs. For this purpose, small entrepreneurs shall be understood as self-employed self-employed persons and professionals and employers, including agricultural workers, who do not employ more than five workers.

(c) Cosecs of farms directly and personally cultivated by the farmer, provided that they are not included in the combined annual plan of agricultural insurance, and the livestock integrated into the family operating unit.

3. Each mutuality may grant all or part of the benefits referred to in the previous two paragraphs.

Article 66. Extending capabilities.

1. Social welfare insurance funds shall not be subject to the qualitative and quantitative limits imposed in Article 65 (1) and (2) and may grant benefits other than those contained in those paragraphs and article, provided that obtain administrative authorization prior to the extension of capabilities.

2. These are necessary requirements for a social security mutual benefit to be able to obtain and maintain the administrative authorisation for the extension of benefits:

(a) There shall be at least five years after obtaining the administrative authorisation to carry out an insurance activity and to be the holder of a valid authorisation throughout the European Economic Area.

(b) Not having been subject to special control measures, nor having been initiated administrative procedure for the dissolution or revocation of the administrative authorisation during the two years preceding the presentation of the request for authorization.

(c) Possession of the minimum mutual fund, solvency margin and the guarantee fund which the fixed premium insurance mutual funds require, and to have the technical provisions incorporated in the same terms as they should have them mutual at fixed premium.

(d) Submit and comply with an activity programme in accordance with Article 12 and subject to the classification in classes in respect of the insurance activity which they perform with the extension of benefits.

3. The application for authorisation for the extension of benefits shall be addressed to the Directorate-General for Insurance and Pension Funds or, where appropriate, to the competent body of the Autonomous Community, and shall be accompanied by the supporting documents of the compliance with the requirements laid down in paragraph 2. The authorisation shall be granted by the Minister for Economic and Financial Affairs by classes and shall cover the full range and cover of the ancillary or ancillary risks, as appropriate, included in another class.

In any case, the procedure and the administrative decision shall be in accordance with the provisions of Article 5 (4), (5), (6) and (7

.

4. If the administrative authorization is obtained in the field of life, the social security fund may continue to carry out, in addition, where appropriate, those for the provision of risk on the matters referred to in Article 65 (2); The administrative authorization is in any of the classes other than life, the social security mutual benefit may, in addition to carrying out the insurance operations corresponding to the authorized class, continue to carry out the risk forecasting on persons who authorise Article 65 (1) and may apply, in accordance with Article 5.3, the administrative authorisation to extend its activity to other classes of life other than those authorised. In both cases, they shall be exempt from the limitations imposed by paragraphs (g) and (h) of Article 64.3 only in the insurance classes in which they have obtained the administrative authorisation for the extension of benefits.

5. The implementation by a mutual social security fund of the activities which this article subject to an administrative authorisation for the extension of benefits without previously obtaining it shall be regarded as a prohibited operation and shall be subject to to the administrative effects and responsibilities prevented in Articles 4.2, 39, 40 and following of this law.

Article 67. Mutual fund and financial guarantees.

1. The social security mutual funds which have obtained the administrative authorisation for the extension of benefits shall be subject to the mutual fund requirement and financial guarantees provided for in the previous Article.

2. The other social welfare mutual societies:

(a) They must constitute a mutual fund of EUR 30,050.61. They shall also form with their assets a wiggle fund which enables them to pay the claims and expenses without waiting for the recovery of the branches.

(b) They shall be required to constitute the technical provisions referred to in Article 16, they shall have the solvency margin as laid down in Article 17 and the guarantee fund required by Article 18.

The minimum amount of the guarantee fund for these mutual funds shall be three quarters of the minimum amounts referred to in the first paragraph of Article 18.2.

However, for mutual societies which provide in their statutes the possibility of carrying out quotas or of reducing benefits and the annual amount of quotas does not exceed EUR 5 million for three years consecutive, the minimum guarantee fund shall be that provided for in the second paragraph of Article 18.2.

In case the institution exceeds the amount of five million euros for three consecutive years, from the fourth year the minimum amounts shall be as set out in the preceding paragraph.

Shall be exempt from the minimum guarantee fund for social security funds whose sole purpose is to provide benefits or allowances for teaching or education and, in any case, those social welfare mutual societies which do not operate by classes, which provide in their statutes the possibility of carrying out quotas or of reducing benefits, which do not cover life risks and the amount of which does not exceed EUR 750,000.

For the purposes of this paragraph, the risks covered by these social security funds shall be assimilated to the insurance classes in the manner prescribed for the solvency margin.

Article 68. Applicable rules.

1. The social security mutual societies whose scope is defined in the initial paragraph of Article 69.2 and in respect of which the autonomous communities have assumed exclusive competence in their Statute of Autonomy shall be governed by their insurance activity, by the provisions referred to in paragraph 2 below, which are considered to be a basis for the organisation of insurance in accordance with the first provision of this law and the rules laid down by those provisions. Autonomous communities in development of such bases.

2. The social security mutual societies whose competence for ordination and supervision lies with the State in accordance with the provisions of Article 69 shall be governed by the provisions of this Chapter and by the other provisions of this Law, object to that, as well as its regulatory development standards.

CHAPTER VIII

Ordering and monitoring competencies

SECTION 1. COMPETENCIES OF THE STATE AND THE AUTONOMOUS COMMUNITIES

Article 69. Distribution of competencies.

1. The powers of the General Administration of the State in the management and supervision of private insurance, including reinsurance, shall be exercised through the Ministry of Economy and Finance.

2. Autonomous communities which have assumed competence in the management of insurance in accordance with their Statute of Autonomy shall have it in respect of insurance undertakings, including reinsurers, whose registered office, scope of operations and the location of the risks, in the case of insurance other than life insurance, and the assumption of the commitments, in the case of life insurance, to be secured to the territory of the respective autonomous community, in accordance with the following conditions: criteria:

(a) In the field of regulatory competence, it is for the legislative development of the bases for the management and supervision of private insurance contained in this law and in the basic regulatory provisions that the complement. As regards insurance cooperatives and social welfare mutual societies, they will also have exclusive competence in the regulation of their organization and operation.

(b) In the field of implementing powers, they are responsible for the management and supervision of private insurance granted to the General Administration of the State in this law. References to the competent regional body shall be construed as references to the Ministry of Economy and Finance and to the Directorate-General for Insurance and Pension Funds, with the exception of those covered by Chapter IV of this Title. and in Title III, and in any event, the powers of granting the administrative authorization for the exercise of the insurance activity and its revocation, which shall, where appropriate, communicate to the respective community, shall be reserved for the State. autonomous. In terms of insurance cooperatives and social welfare mutual societies, it is also up to the autonomous communities to grant administrative authorization and their revocation, following a report by the General Administration of the State in both cases; the This procedure, which will be interrupted while the General Administration of the State issues its report, will be the responsibility of the autonomous community, which will communicate to the Ministry of Economy and Finance each authorization it grants, as well as their revocation. The failure to issue such a report within six months shall be deemed to be a manifestation of the conformity of the Ministry of Economy and Finance with the granting of the administrative authorisation or, where appropriate, its revocation.

3. In accordance with the provisions of Article 149.1.6., 11. and 13. of the Constitution, the State corresponds to the high economic and financial control of the insurance companies. For these purposes, the autonomous communities shall forward, where requested by the Ministry of Economic and Financial Affairs and, in any case, annually, the information and documentation of each entity referred to in Articles 71.4 and 22.4, and shall be maintained. the necessary collaboration between the General Administration of the State and that of the respective autonomous community for the purposes of homogenizing the documentary information and coordinating, where appropriate, the activities of management and supervision of both administrations.

SECTION 2. TH COMPETENCIES OF THE GENERAL ADMINISTRATION OF THE STATE

Article 70. Control of the insurance activity.

1. The Ministry of Economy and Finance shall ensure the orderly functioning and development of the insurance market by promoting the insurance business, transparency, respect and adequacy of its institutions, as well as the correct application of the principles of the insurance technique.

2. The Ministry of Economy and Finance may use any technical, electronic, computer and telematic means for the development of its activity and exercise of its management and super powers.

vision, with the limitations that the use of such means imposes the Organic Law 15/1999, of December 13, of Protection of Personal Data, and the other provisions that result from application.

This media use capability assumes that:

(a) The documents issued by the preceding media, whatever their support, shall be valid and effective for an original document, provided that their authenticity, integrity and compliance with the documents are guaranteed. requirements required by the regulatory provisions of the administrative procedure.

(b) Administrative procedures which are processed with computer support shall ensure the identification and exercise of the power of ordination and supervision by the body of the Ministry of Economy and Finance which exercises it, as well as the confidentiality and security of personal data.

(c) Insurance institutions may relate to the Ministry of Economy and Finance through the technical means referred to in this paragraph where they are compatible with those provided by that Ministry and are respected. the guarantees and requirements laid down in the procedure in question.

3. In the absence of special

rules

Procedure contained in this law, the General Administration of the State will adjust its action to the provisions of Law 30/1992, of 26 November, of the Legal Regime of Public Administrations and of the Procedure Common Administrative.

Article 71. Control of insurance entities.

1. The Ministry of Economic Affairs and Finance shall exercise financial control and the rules laid down in Article 25 of this Law on Spanish insurance institutions, including activities carried out under the right of establishment and under freedom to provide services.

2. The financial control shall consist, in particular, of the verification, for all the activities of the insurance undertaking, of the state of solvency and of the establishment of technical provisions, as well as of the assets that represent them.

In addition, in the case of insurance companies that satisfy benefits in kind, the control shall also be extended to the technical means available to the insurers to carry out the operations that have been carried out. committed to be performed.

3. The Ministry of Economy and Finance shall require that the insurance institutions subject to their supervision have a good administrative and accounting organisation and adequate internal control procedures.

In addition, its advertising will be in accordance with the provisions of Law 34/1988 of 11 November, General of Advertising, and its provisions of development, as well as the precise rules for its adaptation to the insurance companies contained in the regulation of this law.

4. Insurance institutions shall provide the Directorate-General for Insurance and Pension Funds with the documentation and information necessary to comply with the provisions of the preceding paragraphs, by submitting them on a regular basis. the way it is regulated, already by the attention of the individual requirements addressed to them by the aforementioned Directorate-General.

5. The Ministry of Economy and Finance may determine the conditions under which insurance undertakings will have to submit by telematic means to the Directorate-General for Insurance and Pension Funds documentation and information. which they are obliged to supply in accordance with their specific rules.

Article 72. Insurance Inspection.

1. Insurance institutions and other persons and organisations listed in Article 2 are subject to the Insurance Inspectorate.

The entities that are presumed to form a group with an insurance institution shall also be subject to this inspection for the purposes of determining their impact on the legal, financial and economic situation of the insurance undertaking, and those who carry out transactions that can, in principle, be classified as insurance, to check whether they exercise the activity without prior administrative authorisation.

2. The inspection will be able to deal with the legal, technical and economic situation, as well as the conditions under which it is carried out, so that the Ministry of Economy and Finance can adequately fulfil the powers conferred on it. attributes the above article, and all of this in general or in relation to particular issues.

3. The insurance inspection performances shall be carried out by the officials of the Higher Body of State Insurance Inspectors. Officials belonging to the technical bodies of the Ministry of Economy and Finance, as well as computer experts, will only be able to carry out inspections in the terms to be determined in the implementing regulation. of this law. The officials of the Insurance Inspectorate, in the performance of their duties, shall have the status of public authority and shall be obliged to the duty of professional secrecy, even after the exercise of their public duties has been completed.

For the proper exercise of their duties, they may examine all the documentation relating to the operations of the insurance undertaking, request that a copy be submitted to them for the purposes of their incorporation into the inspection, and the inspection will be obliged to do so and to give them the maximum facilities for the performance of their duties. If the person or entity inspected has reasonable grounds, it may object to the delivery of a copy of the documentation, stating its reasons in writing for incorporation into the minutes.

4. The inspection actions may

to be developed without distinction at the registered office of the insurance undertaking, in any of its branches, where the insurance business and the offices of the Directorate-General for Insurance and/or Pension funds, where the items on which they are to be carried out may be examined.

Officials of the Insurance Inspectorate shall have access to the registered office and branches, premises and offices in which activities are carried out by the entity or person inspected; in the case of the domicile, and in the case of opposition, they shall specify the relevant judicial authorisation and, in the case of other dependencies, that of the Director-General of Insurance and Pension Funds.

5. The inspection shall be documented in the inspection record, which may be final or preliminary. Prior inspection reports shall be drawn up when the inspection measures are sufficient to cover the inspection procedure by inspection, if the wait until the final report is put in danger protection of the interests of the insured persons or the attitude of the entity or person inspected or other concurrent circumstances in the instruction of the inspection so advise.

6. In the case of inspection, they shall be reflected, where appropriate:

(a) The facts established by the acting inspector that are relevant for the purposes of the legal classification of the conduct or activity inspected.

b) The legal and economic-financial situation arising from the actions carried out by the inspection.

(c) The causes which could determine the withdrawal of the authorisation, the administrative dissolution, the adoption of special control measures or the measures to guarantee future solvency, as well as the imposition of sanctions administrative.

(d) The proposal to revoke the authorisation, the administrative dissolution of the insurance undertaking, the adoption of special control measures or the measures to guarantee future solvency.

They shall form part of the inspection report, for all purposes, its annexes and the measures extended by the acting inspector during his/her checking activity.

The inspection minutes are of a public nature and shall provide proof of the facts of the inspection recorded and checked by the acting inspector, unless otherwise proven.

7. The administrative procedure for supervision, where the Insurance Inspectorate takes action, shall comply with the following formalities:

(a) It shall be initiated by agreement of the Directorate-General for Insurance and Pension Funds in which the aspects to be inspected shall be determined.

(b) The minutes shall be notified to the person concerned, who shall have 15 days in which to make the allegations and propose the evidence which he considers relevant in defence of his right to the Directorate-General for Insurance and Pensions. If evidence is proposed and these tests are admitted, they must be carried out within a period of not more than 10 days.

(c) If, following the arguments of the entity concerned and, where appropriate, the practice of the test, further action is taken to instruct the administrative supervisory procedure for inspection, it shall be given to the new administrative procedure. Eight-day hearing procedure.

(d) In the light of the act, the competent administrative body shall issue a decision in accordance with the law.

In the event that the inspection report contains the proposal referred to in paragraph 6.d), the resolution shall, if there is a place, take the appropriate control measures or the relevant future solvency security measures, the the administrative dissolution agreement of the insurance undertaking, or the revocation of the administrative authorisation.

e) The maximum duration of this procedure shall be six months, counted from the notification of the inspection report. From the agreement of the Directorate-General for Insurance and Pension Funds for which the inspection is ordered, the inspection measures prior to the lifting of the minutes shall have the duration necessary for the proper implementation of the mandate. content in the order of inspection.

Article 73. Advisory Board of Insurance and Pension Funds.

1. In the Ministry of Economy and Finance, the Advisory Board of Insurance and Pension Funds will function as the administrative board of directors of the Ministry of Economy and Finance in matters concerning the management and supervision of the private insurance and pension schemes and funds which are subject to their consideration. The report you issue will not be binding.

2. The Advisory Board of Insurance and Pension Funds shall be chaired by the Director-General of Insurance and Pension Funds and shall form part, as vowels, representatives of the General Administration of the State, insured and consumers, insurance institutions, pension fund managers, insurance intermediaries, trade union and business organisations and prestige corporations related to private insurance, actuaries, insurance experts and commissars breakdown, in the form that it is regulated. In addition, the President may request the assistance of other persons or entities according to the nature of the matters to be dealt with.

Article 74. Administrative records.

1. The Directorate-General for Insurance and Pension Funds shall keep an administrative register of insurance companies subject to this law. Similarly, it will carry the following administrative records: special insurance brokers, insurance brokerage companies and their senior officials; high-ranking insurance companies; and organizations for the distribution of insurance. risk coverage between insurance entities or for the provision of common services related to their activity and their high positions.

These administrative records will express the circumstances that are regulated and will be public for those who credit interest in their knowledge.

2. The entities and persons registered in the registers referred to in the preceding paragraph shall provide the necessary documentation and information to enable the updated records to be carried out. For these purposes, they shall send to the Directorate-General for Insurance and Pension Funds the documents, data and other information in the form and time-limits which they shall determine, without prejudice to the obligation to comply with the requirements of this Regulation. individualised information that is formulated to them.

SECTION 3 GENERAL RULES

Article 75. Duty of professional secrecy.

1. Subject to the provisions of Article 74, the information, documents and information held by the Ministry of Economic Affairs and Finance under the terms of the duties assigned to it shall be reserved.

All persons who exercise or have exercised an activity in the management and supervision of insurance institutions, as well as those to whom the Ministry of Economic Affairs and Finance have entrusted functions with respect to such institutions shall be required to keep professional secrecy on the confidential information they receive in the course of such a function. Failure to comply with this obligation shall determine the criminal and other responsibilities provided for by the laws. Such persons may not provide a statement or testimony or publish, communicate or display any data or documents reserved, even after they have ceased their service, with the exception of the express permission granted by the competent authority of the Ministry of Economy and Finance. If such permission is not granted, the person concerned shall keep the secret and shall be exempt from the liability.

The Ministry of Economy and Finance will only be able to use confidential information for the exercise of the powers of management and supervision entrusted to it by this law.

2. Except for the obligation of secrecy laid down in the preceding paragraph:

(a) When the data subject expressly consents to the dissemination, publication or communication of the data.

b) The publication of aggregated data for statistical purposes, or communications in summary or aggregate form so that individual entities cannot be identified even indirectly.

(c) The information required by the competent judicial authorities in criminal proceedings.

(d) Information which, in the context of the tender procedures to which an insurance undertaking is submitted, is required by the judicial authorities, provided that they do not deal with third parties concerned rehabilitation of the entity.

e) Information that, in the framework of administrative resources or processes

a) the administrative decisions in which administrative decisions are contested in the exercise of the powers of management and supervision of the activity of the insurance institutions are required by the authorities competent administrative or judicial authorities.

The judicial authorities receiving from the Ministry of Economy and Finance reserved information will be obliged to take the appropriate measures to guarantee the reserve during the substantiation of the process of treat.

f) The information required by the parliamentary committees of inquiry, in the terms established by their specific legislation. The access of the General Courts to the information submitted to the duty of professional secrecy shall be carried out through the Ministry of Economy and Finance, in the form set out in paragraph 1 of this article.

3. By way of derogation from paragraph 1, confidential information may be supplied to the following persons and entities in order to facilitate the fulfilment of their respective functions, which shall be subject to the provisions of paragraph 1. in that paragraph 1:

(a) The competent authorities for the management and supervision of insurance institutions and other financial institutions in the other Member States of the European Economic Area.

(b) The Bank of Spain, the National Securities Market Commission and the other entities responsible for the management and supervision of the accounts and the solvency of institutions.

c) The Insurance Compensation Consortium in its liquidator function of insurance entities.

(d) the authorities responsible for combating money laundering; the tax authorities in respect of communications which may be carried out in exceptional circumstances pursuant to Articles 93 and 94 of the Treaty; Law 58/2003, of December 17, General Tax, after authorization of the Minister of Economy and Finance.

e) The auditors of the insurance institutions and their groups, and the Accounting and Audit Institute of Accounts.

4. Confidential information may also be received from the persons and entities referred to in paragraph 3. The confidential information received, as well as those obtained by the inspection of branches of Spanish insurance companies established in other Member States of the European Economic Area, may not be the subject of the communication to referred to in paragraph 3, with the exception of the express agreement of the competent authority which has communicated the information or the competent authority of the Member State of the branch, respectively.

5. Cooperation agreements providing for the exchange of information with the competent authorities for the management and supervision of insurance undertakings and other financial institutions or with other authorities or bodies of third parties countries shall require that the information provided is protected by guarantees of professional secrecy at least equivalent to those referred to in paragraph 1 of this Article, and that the exchange of information shall be subject to compliance with the the management and supervision of those authorities.

Where the information originates in another Member State of the European Economic Area, it shall not be disclosed without the express agreement of the competent authorities which have provided it and, where appropriate, only with the the purpose for which those authorities have given their conformity.

Article 76. Insurance in third countries.

1. Vessels, aircraft and vehicles with regular parking in Spain and goods of any kind located on Spanish territory may not be secured in third countries outside the European Economic Area, with the sole exception of goods in international transport arrangements. The Spanish residents resident in Spain as regards their persons or their responsibilities, unless they are on international travel and for the duration of the period, may also not be insured in those countries. However, the Minister for Economic Affairs and Finance may authorise this assurance on an exceptional basis and for specific operations.

2. It is also prohibited to conclude direct insurance operations in Spain with third-country insurance companies outside the European Economic Area or to do so through private insurance intermediaries who carry out their activities for those companies. From the above, it is excepted from the assumption that these insurance companies contract through branches legally established in Spain.

Article 77. Duty of cooperation with the Member States of the European Economic Area and obligations of information and reciprocity.

1. The Directorate-General for Insurance and Pension Funds shall cooperate with the supervisory authorities of the other Member States of the European Economic Area and shall exchange with them all the information necessary for the exercise of their powers. respective roles in the field of management and supervision of private insurance operations.

2. The Directorate-General for Insurance and Pension Funds shall inform the Commission of the European Communities:

(a) Any authorisation of a company dominated by one or more insurance entities governed by the right of a non-integrated country in the European Economic Area. In such cases, the information shall specify the structure of the group of companies.

(b) Any acquisition by an insurance institution of a country not a member of the European Economic Area of holdings in a Spanish insurance undertaking that makes the latter a company dominated by that entity.

(c) Of any general difficulty encountered by Spanish insurance institutions in establishing or developing their activity in a country which is not a member of the European Economic Area.

3. The Directorate-General for Insurance and Pension Funds shall also inform the Commission of the European Communities, at the request of the latter, when with

will take the circumstances to be referred to in paragraph 4 below and as long as these remain:

(a) Any application for the authorisation of a company dominated by one or more companies governed by the right of a non-integrated country in the European Economic Area.

(b) Any project of a dominant company governed by the right of a non-integrated country in the European Economic Area to acquire stakes in a Spanish insurer which is to convert to the latter in the dominated society of that.

4. The Directorate-General for Insurance and Pension Funds shall limit its number or suspend the processing of new administrative authorisations submitted under Article 5 by companies dominated by other companies governed by the right of a State not belonging to the European Economic Area where the Commission of the European Communities for a period of not more than three months or the Council, in order to extend such measures by longer term, shall adopt an agreement in that respect verified that the insurance institutions of the European Economic Area do not receive in a third country a treatment which provide the same competition opportunities as the national insurers in that third country and that the conditions for effective access to the market are not met.

The above paragraph shall also apply to the procedure for the processing of communications for the acquisition of significant holdings, as referred to in Article 22, in Spanish insurance companies. entities domiciled in non-integrated States in the European Economic Area.

5. The limitation or suspension referred to in the preceding paragraph shall in no case be applicable to the creation of companies dominated by insurance companies or by the companies themselves, if one or more of them are duly authorised in the European Economic Area, or the acquisition of significant holdings by such entities in an insurance institution domiciled in that Area.

6. In any event, the measures to be taken under this Article shall comply with the obligations entered into by the European Union under international treaties or conventions regulating access to the insurance business and its exercise.

TITLE III

From the activity in Spain of foreign insurance entities

CHAPTER I

Of the activity in Spain of insurance companies domiciled in other Member States of the European Economic Area

SECTION 1

Article 78. Management and supervision of authorised insurance entities.

1. Insurance companies domiciled in European Economic Area countries other than Spain which have obtained the authorisation to operate in the Member State of origin may exercise their activities in Spain under the law of establishment or free provision of services.

The insurance institutions carrying out the operations described in Article 49 (2) of this Law and the bodies governed by public law listed in Article 4 of this Law shall not be eligible for the provisions of the preceding paragraph. Council Directive 73 /239/EEC of 24 July 1973 on the coordination of provisions laid down by law, regulation or administrative action relating to the taking up and pursuit of the business of direct insurance other than life assurance Article 3 of Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002, on life insurance.

2. The insurance institutions referred to in the preceding paragraph shall respect the provisions laid down for reasons of general interest and for the management and supervision of insurance undertakings, including those for the protection of the insured, which, in their Case, they are applicable. They must also submit, on the same terms as the Spanish insurance companies, all the documents required by the Ministry of Economy and Finance for the purpose of verifying whether they respect in Spain the Spanish provisions which are applicable. For these purposes, those insurance undertakings shall be subject to the inspection by the Ministry of Economic Affairs and Finance in accordance with Article 72 and shall be subject to the provisions of Article 25 (6

.

3. If the Directorate-General for Insurance and Pension Funds finds that an insurance undertaking referred to in paragraph 1 does not comply with the Spanish provisions applicable to it, it shall require it to accommodate its performance in the legal. In the absence of the relevant adequacy by the insurance undertaking, the Directorate-General for Insurance and Pension Funds shall inform the supervisory authority of the home Member State in order to take the relevant measures. for the insurance institution to terminate that irregular situation and to notify them to the Directorate-General for Insurance and Pension Funds.

If, for lack of adoption of the relevant measures or because the measures taken are inadequate, the infringement of the legal order will persist, the Directorate-General for Insurance and Pension Funds may adopt, after reporting to the supervisory authorities of the home Member State, the measures provided for in Article 25.5 and those provided for in Article 39 which, in both cases, apply to it.

In case of urgency, the measures referred to in the preceding paragraph may be adopted by the Directorate-General for Insurance and Pension Funds without the need for the requirement and the information required by the paragraph first.

4. The contract documentation and other information which the Ministry of Economy and Finance has the right to require from or to be referred to by the Ministry of Economic and Finance shall be submitted in Spanish in accordance with paragraph 2 above and provided in this chapter.

5. Such insurance companies may advertise their services in Spain on the same terms as the Spanish insurance companies and subject to the same management and supervision.

6. The administrative records referred to in Article 74 shall be taken into account by those entities and their senior officials, separately for those who carry out their activities in Spain under the right of establishment or under the freedom to provide services. of services.

Article 79. Disposal of portfolio.

1. The Ministry of Economy and Finance shall provide its conformity for the disposal of the insurance contracts of an insurance undertaking domi

ciliated in another Member State of the European Economic Area where Spain is the Member State of the risk undertaking or location. It shall also be consulted when the transferor is a branch established in Spain of an insurance institution domiciled in another Member State of the European Economic Area. Finally, where the transferee is a Spanish insurance undertaking, that ministry must certify that the transferee has, in view of the transfer, the necessary solvency margin.

2. The Ministry of Economy and Finance shall express its opinion within three months of receipt of the request for conformity, formulation of consultation or application for certification submitted by the Member State of origin of the institution. Transferor insurer. If, on the expiry of that period, the said ministry has not acted in this respect, the conformity, the consultation or the certification shall be deemed to have been granted.

3. Where the transferor's home Member State authorises the transfer, the Ministry of Economy and Finance shall give the transfer publicity if Spain is the Member State of the risk undertaking or location.

Article 80. Intervention measures.

1. Where the supervisory authority of an insurance undertaking domiciled in a Member State of the European Economic Area other than Spain, which operates under the right of establishment or under the freedom to provide services, is entitled to revoke the administrative authorisation, the Directorate-General for Insurance and Pension Funds shall prohibit the insurance undertaking from hiring new insurance in both schemes. In this case, and in order to safeguard the interests of the insured, the Directorate-General for Insurance and Pension Funds may, in collaboration with that authority, adopt the special control measures provided for in Article 39 of the Treaty. this law.

2. Insurance companies domiciled in another Member State of the European Economic Area operating in Spain under the right of establishment or under the freedom to provide services are subject to the powers of the Ministry of Economic Affairs and Finance in the terms of Articles 40 et seq. of this Law, in so far as it applies and with the following details:

(a) The sanction of revocation of the authorisation shall be understood as being replaced by the prohibition on the initiation of new operations in the Spanish territory.

(b) The initiation of the procedure shall be communicated to the supervisory authorities of the home Member State so that, without prejudice to the penalties provided for under this law, they shall take the measures they deem appropriate. so that, where appropriate, the entity terminates its infringing action or avoids its reiteration in the future. The Ministry of Economy and Finance will notify the decision taken to the authorities in the course of the procedure.

c) Charges of administration or management of branches are considered to be the proxy and other persons who run such branch.

3. If an insurance institution domiciled in another Member State has been taken by the supervisory authority of that Member State, the special control measure for the prohibition of disposal and application of the Directorate-General for Insurance and Funds Pensions which take the same measure on the assets of the insurance undertaking situated in Spanish territory, with the indication of those who are to be subject to it, the said Directorate-General shall take such a measure.

4. In respect of an insurance institution domiciled in a Member State of the European Economic Area other than Spain, including its branches in Spain or in other Member States of the European Economic Area, a measure of (a) reorganisation or winding-up proceedings, such a measure or procedure shall take effect in Spain as soon as it does so in the Member State of the European Economic Area in which the measure has been adopted or the procedure has been initiated.

For the purposes of the preceding paragraph, a reorganisation measure is understood to mean the intervention of administrative bodies or judicial authorities, which is intended to maintain or restore the financial situation of the insurance institution and it affects the pre-existing rights of third parties other than the entity itself. Settlement procedure means a collective procedure involving the liquidation of assets and the distribution of the proceeds of settlement between creditors, shareholders or shareholders, as appropriate, and which necessarily implies some form of intervention by the administrative or judicial authority, whether or not based on insolvency and having a voluntary or compulsory nature.

Once the General Directorate of Insurance and Pension Funds is notified of the adoption of the measure or the opening of the procedure, it shall publish in the "Official State Gazette" an extract of the agreement or resolution of which bring the measure or proceedings; in any event, the extract shall include the competent authority of the Member State which has adopted the measure or procedure, the legislation resulting from it, and, where appropriate, the identification of the designated liquidators or liquidators.

Administrators and liquidators appointed by the competent authority of another Member State of the European Economic Area may perform their duties in Spain; for such purposes, it shall be sufficient to prove their condition a certification of the resolution or legalized copy of the agreement for which the appointment or appointment is made, translated into Spanish.

Such measures and procedures shall be governed by the law of the Member State of the European Economic Area for the adoption of the measure or procedure without prejudice to the fact that the following cases are referred to: The following rules are observed and leaving aside what can be foreseen in international treaties:

1. The effects of these measures and procedures on work contracts submitted to Spanish legislation will be governed by this.

2. º The rights of the insurer on a property, ship or aircraft that are subject to registration in a Spanish public register shall be governed by Spanish law.

3. No prejudice to the provisions of paragraph 3 of this Article, the adoption of reorganisation measures or the opening of the winding-up proceedings shall not affect the actual rights of creditors or third parties in respect of tangible or intangible assets, furniture or buildings, both specific assets and sets of non-determined assets, the composition of which is subject to modification, belonging to the insurance undertaking which is located in Spain the time of adoption of such measures or the opening of such proceedings, or the exclusive right to charge a credit, in particular, the right guaranteed by a pledge of which the credit is to be granted or by the transfer of such credit to guarantee, where such guarantees are governed by Spanish law.

4. The adoption of reorganisation measures or the opening of a winding-up procedure on a buyer's insurance undertaking shall not affect the seller's rights based on a domain reservation when the latter is well established. is found, at the time of the adoption of the measure or the opening of the procedure, in Spanish territory.

The adoption of reorganisation measures or the opening of a winding-up proceedings on an insurance undertaking selling a good, after it has been delivered, shall not constitute a cause of termination or termination of the proceedings. sale and shall not prevent the purchaser from acquiring the property of the goods sold when the property is located, at the time of the adoption of the measures or the opening of the procedure, in Spanish territory.

5. The adoption of reorganisation measures or the opening of a winding-up procedure shall not affect the right of a creditor to claim the compensation of his credit with the credit of the insurance institution when the law governing the settlement allows for compensation.

6. The effects of a reorganisation measure or settlement procedure on the rights and obligations of participants in a Spanish regulated market shall be governed exclusively by Spanish law.

7. The nullity, annulment or unavailability of legal acts harmful to all creditors shall be governed by the law of the Member State of the European Economic Area of origin, unless the person who is The benefit of the act prejudicial to the creditors ' group proves that the said act is subject to Spanish law and that this legislation does not in any way permit its challenge.

8. The validity of the transfer for consideration by an insurance undertaking carried out after the adoption of a reorganisation measure or the opening of a winding-up proceedings, of a property situated in Spain, vessel or aircraft subject to registration in a Spanish public register or of transferable securities or other securities whose existence and transfer involves an entry in a register or an account provided for by Spanish legislation or are placed in a central deposit system governed by Spanish law, shall be governed by the Spanish legislation.

9. The effects of a reorganisation measure or settlement procedure on a pending cause followed in Spain relating to a property or a right of which the insurer has been dispossessed shall be governed exclusively by the Spanish legislation.

5. The Directorate-General for Insurance and Pension Funds may require the supervisory authorities of other Member States of the European Economic Area to provide information on the status and development of winding-up proceedings to be carried out on (a) in respect of entities subject to the supervision of those authorities.

Article 81. Duty of information to the policyholder.

1. Insurance companies domiciled in another Member State of the European Economic Area operating in Spain under the right of establishment or under the freedom to provide services shall be subject to the contracts concluded in that Member State. both schemes to the same duty of information to the policyholder as to the Spanish insurance companies impose Articles 53 and 60 of this law. The information will be provided in the official Spanish language of the home or habitual residence of the policyholder.

2. Dealing with

insurance contracts

civil liability in motor vehicles, excluding liability of the carrier, concluded under the freedom to provide services, the information must also include the name and address of the carrier. representative referred to in Article 86.2 of this Act.

Article 82. Taxes and compulsory membership.

1. Insurance contracts concluded under the right of establishment or under the freedom to provide services which cover localised risks or make commitments in Spain shall be subject to surcharges in favour of the Compensation Consortium. Insurance to cover the needs of the insurance company in the exercise of its functions for the compensation of losses arising from extraordinary events in Spain, a guarantee fund in civil liability insurance derived from the movement of motor vehicles and the liquidator of insurance undertakings as well as the other charges and taxes legally payable under the same conditions as contracts entered into with Spanish insurance companies.

2. In particular, in civil liability insurance in motor vehicles, excluding the liability of the carrier, the insurance companies operating in Spain under the right of establishment or under free movement The provision of services must be integrated into the Spanish Office of Automobile Insurers (Ofesauto) and, where appropriate, subscribe to agreements and agreements that are binding on Spanish insurance companies.

SECTION 2. ESTABLISHMENT OF THE RIGHT OF ESTABLISHMENT

Article 83. Determination of exercise conditions.

1. Before a branch in Spain of an insurance institution domiciled in another Member State of the European Economic Area is established and begins to carry out its business under the right of establishment, the Directorate-General for Insurance and Pension funds may indicate to the supervisory authority of the home Member State the conditions under which, for reasons of general interest, the activity in Spain must be carried out.

The Directorate-General shall have a period of two months, counted from the moment it receives the supervisory authority of the Member State of origin, as referred to in paragraph 2 of this Article. Article 55.

The branch will be able to establish itself and begin its activity in Spain since it is notified of the compliance or conditions of the General Directorate of Insurance and Pension Funds. It may also be initiated where such notification has not been received by the time limit of two months.

2. Any modification in the branch of any of the aspects referred to in paragraphs (b) to (e) of Article 55.1 shall be subject to the same procedure, but the time limit, which shall be common, shall be reduced to one month.

3. Any permanent presence in the Spanish territory of an insurance institution domiciled in another Member State of the European Economic Area shall be deemed to be subject to the right of establishment, even if it has not taken the form of a branch and exercise by an office administered by the staff of that office or by an independent person, but with powers to act on a permanent basis on behalf of the insurance undertaking as a branch would do.

Article 84. Inspection of branches by the supervisory authority of origin.

The supervisory authorities of the home Member State of an insurance undertaking having established a branch in Spain may proceed, after information to the Directorate-General for Insurance and Pension Funds, on its own. or by persons to whom they have given a mandate to do so, to the inspection of that branch in order to carry out the necessary control, with the cooperation of the Insurance Inspectorate on the terms which it regulates determine.

SECTION 3. FREEDOM TO PROVIDE SERVICES

Article 85. Starting and modifying the activity.

1. Insurance companies domiciled in another Member State of the European Economic Area may initiate or, where appropriate, modify their activity in Spain under the freedom to provide services since they are notified that the authority has The supervisory authority of the home Member State has referred to the Directorate-General for Insurance and Pension Funds the same communication as referred to in Article 56.2 of this Law.

2. In particular, if the insurance undertaking intends to cover the risks of civil liability in motor vehicles, excluding the liability of the carrier, it shall be a requirement for the commencement of its business in Spain which has previously communicated to the Directorate-General for Insurance and Pension Funds the name and address of the representative referred to in Article 86.2, and which has made the express statement responsible to that Directorate-General that the insurer has integrated into Ofesauto and that it will apply the surcharges legally enforceable in favour of the Insurance Compensation Consortium.

Article 86. Representative for tax purposes and in car insurance.

1. Insurance companies domiciled in another Member State of the European Economic Area intending to operate in Spain under the freedom to provide services shall be required to appoint a representative with tax residence in Spain to effects of the tax obligations referred to in this law by the activities carried out on Spanish territory.

Such a representative shall, on behalf of the insurance undertaking operating under the freedom to provide services, in addition to those provided for in Article 82 of this Act, comply with the following tax obligations:

(a) Practice withholding or income to account and enter the amount in the Treasury in relation to the transactions carried out in Spain in the terms provided for in the regulations of the Taxes on the Income of Persons Physical, on Societies and on Non-Resident Income.

b) Inform the tax administration in relation to the operations carried out in Spain in accordance with the provisions of the rules governing the tax on the Income of the Physical Persons, on Societies and on the Income of non-residents.

2. The insurance institutions referred to in the preceding paragraph who intend to conclude contracts for liability insurance in motor vehicles, excluding liability of the carrier, shall also appoint a representative, a natural person who is habitually resident in Spain or a legal person established in Spain. Its powers shall be exclusively the following:

(a) To tender for any claims made by the injured parties. To this end, they must have sufficient powers to represent the insurance undertaking even for the payment of the compensation and to defend it before the Spanish courts and administrative authorities.

b) Represent the insurance institution before the competent Spanish judicial and administrative authorities in all matters relating to the control of the existence and validity of the insurance policies of civil liability that result of the movement of land-based vehicles.

(c) To carry out, where appropriate, the functions referred to in paragraph 1 above.

3. If the insurance undertaking has not designated the representative referred to in paragraph 2 above, the representative designated in Spain for the processing and settlement of claims occurring in another Member State shall assume its duties. European Economic Area, where the injured person has his residence in Spain.

4. The representatives referred to in paragraphs 2 and 3 shall not themselves constitute a branch and, as a result, may not conduct direct insurance operations on behalf of the insurance undertaking represented.

CHAPTER II

Of the activity in Spain of insurance entities domiciled in third countries

Article 87. Establishment of branches.

1. The Minister for Economic Affairs and Finance may grant administrative authorisation to insurance companies domiciled in third countries, not members of the European Economic Area, in order to establish branches in Spain for the purpose of carrying out the activity. insurer, provided that they meet the following requirements:

(a) That, in advance not less than five years, they are duly authorized in their country to operate in the classes in which they intend to do so in Spain.

(b) They create a general branch whose object is limited to the insurance activity, with permanent domicile in Spain, where the accounting and documentation of the activity they develop are preserved.

(c) They submit and comply with an activity programme adjusted to Article 12. They shall also provide the documentation to be determined.

(d) to provide and maintain at its branch in Spain a fund of no less than the minimum social capital or mutual fund required by Article 13 for Spanish insurance institutions, according to the insurance classes in which they operate, which shall be referred to as the permanent fund of the central house and also provide and maintain in Spain a guarantee fund not less than the minimum laid down in Article 18.

(e) accompanying a certificate from the supervisory authority of their country of credit that they comply with their legislation, singularly in terms of solvency margin.

(f) designating a general manager, with domicile and residence in Spain, who fulfils the conditions required by Article 15, and with the widest powers

mercantiles to compel the insurer against third parties and represent it before the Spanish courts and administrative authorities; if the general manager is a legal person, he must have his registered office in Spain and designate, in turn, to represent a natural person who meets the above conditions.

This proxy must obtain prior acceptance from the General Directorate of Insurance and Pension Funds, which may refuse it or, if necessary, revoke it in application of the principle of reciprocity or lack of requirements that Article 15 requires for those who are in charge of administration of insurance entities.

g) If the entity intends to cover the risks of the civil liability class in motor vehicles, excluding the liability of the carrier, it shall communicate the name and address of the designated representative in each of the States of the European Economic Area other than Spain, which is responsible for the processing and settlement of claims which have occurred in a State other than the State of residence of the injured party or in a signatory country of the certificate system international car insurance (green card).

2. The branch and its general manager shall be registered in the administrative register provided for in Article 74.

3. The Directorate-General for Insurance and Pension Funds may require the systematic communication of the technical bases used for the calculation of premiums and technical provisions, without such a requirement being able to constitute a prior condition. for the exercise of the activity.

Article 88. Conditions for the exercise of the insurance activity.

The branch may carry out its insurance activity in Spain subject to the provisions of Title II of this Law, except those of Chapter IV, which shall in no case be applicable to it, so that its risks must always be be located and their commitments made in Spain.

Notwithstanding the above paragraph:

(a) The regulatory standards for the development of this law may require that the assets eligible for coverage of the technical provisions are located in Spain.

(b) The disposal of the portfolio in which these branches are involved as transferors or transferee shall comply with the following rules:

1. Only the transfer of a portfolio of branches in Spain from insurance companies domiciled in third countries shall be admissible where the transferee is a Spanish insurer or domiciled in another Member State of the Space European Economic, a branch established in Spain of an insurance institution domiciled in another Member State of the European Economic Area or in third countries or, finally, a branch established in the other Member States of the EEA European Economic of a Spanish insurer or domiciled in any of the other Member States. In all of these cases, the transfer of the portfolio shall be subject to the provisions of Article 23 and, where appropriate, shall require prior to the granting of the administrative authorisation the certification of the competent authority of the Member State of the the transferee that the latter has, in the light of the transfer, the necessary solvency margin; such certification must be issued within three months of the receipt of the request made by the Directorate-General for Insurance and Pensions and shall be deemed to be extended in accordance if, on the expiry of that period, certification is not issued. If the transferee is a domiciled insurer, or an established branch, in another Member State of the European Economic Area, the policyholders shall have the right to terminate the insurance contracts affected by the transfer.

2. Only the transfer of a portfolio to a branch in Spain of insurance companies domiciled in third countries shall be admissible where the transferor is a Spanish insurance institution or a branch established in Spain of entities insurers domiciled in other Member States of the European Economic Area or in third countries. If the transferor is a Spanish insurer or a branch in Spain of insurance institutions domiciled in third countries, the transfer of the portfolio shall be in accordance with Article 23; if the transferor is a branch in Spain of a insurance institution domiciled in any of the other Member States of the European Economic Area, the Ministry of Economy and Finance shall provide its conformity for the sale and, in advance, certify if the branch of the institution Insurer domiciled in third countries has, in view of the transfer, the solvency margin necessary, all in accordance with Article 79.

Article 89. Special rules for branch intervention.

1. It shall be the cause of revocation of the administrative authorisation granted to the branch of an insurance institution domiciled in a country not a member of the European Economic Area, in addition to those listed in Article 26.1 of this Act, which is part of that law. Any of the circumstances that in a Spanish insurance institution are cause of dissolution. In addition, the Government may revoke the authorisation of these branches in application of the principle of reciprocity or when they advise it in extraordinary circumstances of national interest.

In the event that an insurance institution domiciled in a non-member country of the European Economic Area has branches established in Spain and in other Member States of the European Economic Area, the Directorate-General for Insurance and Pension Funds will coordinate their actions with those of the other supervisory authorities involved.

2. The need to safeguard the interests of insured persons, beneficiaries, injured persons or other insurers required by paragraph (a) of Article 28.2 to agree to the intervention of the liquidation of an insurance undertaking is presumed, in any case, in the liquidation affecting branches of foreign entities domiciled in countries not members of the European Economic Area whose headquarters have been dissolved.

3. For the purposes of the exercise of sanctioning power, the general manager and the other persons who run the branch are deemed to be in charge of administration or management of the branch.

Article 90. Special arrangements for Swiss insurance companies.

They shall not be required in the field of insurance other than life insurance for branches established in Spain of insurance institutions of Swiss nationality:

(a) The requirements set out in paragraphs (a) and (d) of Article 87 (1) and the prior acceptance by the General Administration of Insurance and Pension Funds of the general manager to access the insurance business.

(b) The minimum solvency margin for the financial year of the insurance business.

Additional disposition first. Security of caution in favour of public administrations.

The insurance contract concluded with an insurance institution authorised to operate in the course of security shall be admissible as a form of guarantee to public authorities in all cases under the law in force. require or allow credit institutions or credit institutions to provide guarantees to such authorities. They are requirements for the insurance contract to be able to serve as a form of guarantee to the public authorities:

(a) It shall be the condition of the policyholder to provide the guarantee to the public administration and that of the insured person.

(b) The non-payment of the premium, whether unique, first or next, shall not entitle the insurer to terminate the contract, nor shall it be extinguished, neither the cover of the suspended insurer nor is it released from its obligation in the case the event of the claim consisting in the contest of the circumstances under which the guarantee is to be made effective.

(c) The insurer shall not be able to oppose the insured with any exceptions that may be appropriate against the policyholder.

(d) The policy in which the insurance contract is concluded shall be in accordance with the model approved by the Minister for Economic Affairs and Finance.

Additional provision second. Currency payable on commitments and risks.

1. The currency in which the risks assumed by the insurer shall be payable shall be determined in accordance with the following rules:

(a) Where the guarantees of a contract are expressed in a given currency, the insurer's benefits shall be deemed to be payable in that currency.

(b) Where the guarantees of a contract are not expressed in a given currency, the benefits of the insurer shall be deemed to be payable in the currency of the country in which the risk is located. However, the insurer may choose the currency in which the premium is expressed, where circumstances so warrant.

(c) The insurer may consider that the currency in which its benefits are payable is the currency to be used according to its own experience or, in default, the currency of the country in which it is established:

1. º For contracts guaranteeing the risks classified in the classes of railway vehicles, air vehicles, maritime vehicles, lake and river, goods carried, civil liability in air vehicles, Civil liability in maritime, lake and river vehicles and civil liability for products.

2. º For contracts which guarantee the risks classified in other classes where, according to the type of risk, guarantees must be executed in another currency other than that which would result from the application of the rules precedents.

(d) Where a claim has been declared and the benefits are payable in a currency other than that resulting from the application of the above rules, the risks assumed by the insurer shall be deemed to be enforceable in that currency. currency, in particular the currency in which the indemnity to be paid by the insurer has been fixed either by a court decision or by an agreement between the insurer and the insured person.

(e) Where the firm valuation of the damage has taken place in a currency other than that resulting from the application of the above rules, the insurer may consider that its benefits are payable in that currency.

2. In life insurance, the rule provided for in paragraph 1.a) shall apply in order to determine the currency in which the insurer's commitments are deemed to be due.

Additional provision third. Contributors to the insurance activity.

1. Insurance experts who give an opinion on the causes of the claim, the assessment of the damage and the other circumstances which affect the determination of the compensation resulting from an insurance contract and make the proposal for an amount In the case of the Commission, the Court of State held that the Court of State held that the Court of State held that the Court of State held that the Court of State held that the Court of State held that the Court of Articles 857 et seq. of the Trade Code itself. Its legal status, which may be determined by regulation, shall comply with the following rules:

(a) Insurance experts, breakdown commissars and breakdown liquidators must be in possession of a degree in the matter to which the point on which they are to give their opinion belongs, in the case of regulated professions, and sufficient knowledge of the insurance expertise and the law on insurance contract to the purpose of carrying out its tasks with the scope that may be established in a regulated manner.

(b) To ensure the appropriate level of preparation referred to in the preceding paragraph, the most representative organisations of the insurance institutions and insurance experts, breakdown commissioners and liquidators Breakdowns shall take the necessary measures together. To this end, together, the said representative bodies shall lay down the general lines and the basic requirements to be met by the training programmes of the professionals concerned and the means to be used for their training. execution.

(c) The Directorate-General for Insurance and Pension Funds shall encourage the appropriate technical preparation and professional qualification of insurance experts, breakdown commissioners and breakdown liquidators. To this end, the documentation provided for in the preceding paragraph shall be made available to the Directorate-General, which may require the necessary modifications to be made to the content of the programmes and in the precise means for their organisation and execution to bring them into line with the training duty referred to in paragraph (b) above.

2. Auditors shall have the obligation to communicate as soon as possible to the Directorate-General for Insurance and Pension Funds any act or decision on an insurance undertaking which they have been aware of in the course of their the audit function carried out on the same or another entity with which that insurance undertaking has a close link, where the said fact or decision may constitute a violation of the rules for the management and supervision of institutions (a) insurance, or damage to the continuity of the exercise of its activity or, ultimately, to involve the abstention from the opinion of the auditor, or an unfavourable opinion or with reservations, or prevent the issuance of the audit report.

3. The valuation companies shall assess the real estate of the insurance institutions with prudence for the purposes of the financial guarantees required of them and shall draw up the certificates and reports issued for that purpose. Failure to comply with these obligations will determine the application to the companies of assessment of the sanctioning system provided for in the additional provision of Law No 3/1994 of 14 April, adapting Spanish legislation in the field of of credit institutions to the Second Banking Coordination Directive.

4. For the purposes of this law, it is actuaries who have the corresponding legal title and have the qualification to rule on the actuarial aspects contained in the law. Where required, they shall, under their responsibility, demonstrate on the future dynamic solvency of the insurance business or forecast system developed by a particular insurance undertaking.

Additional provision fourth. Concerts of insurance companies with agencies of the Administration of Social Security.

Without prejudice to the provisions of Articles 77 and 199 of the recast text of the General Law on Social Security, approved by the Royal Legislative Decree 1/1994 of 20 June, and in Article 1.2 of this Law, the rules of management and supervision of private insurance shall be applicable to financial guarantees, technical bases and premium rates corresponding to the obligations assumed by the insurance institutions on the basis of the concerts which, where appropriate and prior to the report of the Directorate-General for Insurance and Pension Funds or the competent body of the communities They shall, in accordance with their specific legislation, provide for the management of some of the special security schemes with bodies from the Administration of Social Security, or with bodies governed by the Social Security Administration. Social.

Insurance policy models established by virtue of the concerts referred to in the preceding paragraph shall be made available to the Directorate-General for Insurance and Pension Funds or competent bodies of the Autonomous communities in the form that is regulated by law.

Additional provision fifth. Validity of the administrative authorisation throughout the European Economic Area.

The administrative authorisation granted to Spanish insurance companies under Article 6.1 of Law 33/1984 of 2 August on the management of private insurance, when it extends to the entire Spanish territory, is The European Economic Area is valid throughout the European Economic Area in the terms of Article 5.5 of this Law, since 10 November 1995. This shall be without prejudice to the provisions of Title II, Chapter IV, which are intended to operate under the right of establishment or under the freedom to provide services, without prejudice to the provisions of Chapter IV of Title II. to reiterate the initial notification or information regarding the activities already started on that date in both schemes.

Additional provision sixth. Amendments required by the adaptation to Law 30/1995 of 8 November of the management and supervision of private insurance.

1. With the exception of the life-class, institutions which have the guarantee fund covered, adequately calculated, accounted for and invested in technical provisions, have the legally enforceable solvency margin and are not in any way In the case of situations which may be adopted for special control measures, the social capital required by 31 December 1993, which must be fully paid out, or the mutual fund payable to 31 December 1993, may be held indefinitely. December 1993 to the fixed premium mutuals, which must be duplicated and written, provided that the had been informed of the Directorate-General for Insurance and Pension Funds before 30 June 1997 and had not expressly expressed its disagreement within six months of the communication. In the case of entities granting health care benefits, they shall also have a report from the health authorities on the adequacy of these benefits to the relevant health legislation.

2. Institutions which have opted for the route referred to in the previous paragraph and no longer fulfil any of the conditions required by it shall submit to the authorization of the Directorate-General for Insurance and Pension Funds a feasibility plan from the time when they cease to comply with those requirements. If the Directorate-General for Insurance and Pension Funds authorises the plan of viability, it shall fix the conditions and the time limit, which may not exceed two years, in which those institutions must, in any event, reach the minimum capital required by the Article 13 of this law.

3. Insurance institutions which have not reached the minimum social capital or mutual fund required by Article 13 of this law may maintain the activity in the classes in which they are authorised, but without extending it to other different classes.

4. The insurance institutions referred to in this additional provision which do not meet the time limit laid down in paragraph 2 in relation to the viability plan shall be wound up.

Additional provision seventh. Insurance entities authorized to operate in life insurance and in insurance other than life insurance.

Insurance companies which on 4 August 1984 were authorised to carry out direct insurance operations other than life insurance and life insurance operations may continue to be involved in such operations. Notwithstanding the foregoing, they must keep separate accounts for those and these, and have at least one social capital, mutual fund, permanent fund of the central house, solvency margin and guarantee fund equal to the sum of the required for the life-class and for the different class of life of those who operate in which higher amounts are required. Failure to comply with this requirement shall determine the administrative dissolution of the insurance undertaking, unless the administrative winding up of the insurance undertaking chooses to carry out exclusively life insurance operations or direct insurance other than life insurance.

The provisions of the preceding paragraph shall apply to mergers and divisions which would have been carried out to comply with Law No 30/1995 of 8 November 1995 on the management and supervision of private insurance, in which they would have been participating insurance entities authorised to operate simultaneously in the field of life and in classes other than those of life and others which were only in one of those areas, provided that one of the merging companies or the beneficiary of the a division is an insurance undertaking which, on 4 August 1984, is authorised to carry out direct insurance operations other than life insurance and life insurance operations.

Additional disposition octave. Insurance entities authorised to operate in part of the risks of the disease class.

The authorisations granted before 10 November 1995 in the fields of sickness or health care provided for by the Order of 7 September 1987 shall be considered as an authorisation comprising only one of the following: (a) any of the risks included in a class within the meaning of the second subparagraph of Article 5 (3) and (7) of this Law, and the regulatory provisions to regulate the sickness class shall apply only to the coverage of the risks of the health care included in the disease class where this is expressly provided for.

Additional provision ninth. Adaptation of social security mutual societies.

1. The social welfare insurance companies which, on 31 December 1983, are legally guaranteeing benefits to persons in excess of the limits laid down in Article 65 of this Law may continue to guarantee the benefits which the have been established on that date, but may not agree to increase or revaluation of benefits while they remain in excess of the limits referred to in that provision.

2. The social welfare insurance funds which were previously granted benefits other than the insurance business before 10 November 1995 may continue to carry out such activities under Article 64.2, provided they have been requested authorisation from the Directorate-General for Insurance before 10 November 1996 and obtained it.

3. A social security fund whose sole purpose is to grant benefits or grants of teaching or education may maintain the mutual funds required before 10 November 1995, without being subject to the obligation of achieve the mutual fund required by Article 67.2.a).

4. Since 10 November 1995, the federations or the National Confederation of Social Welfare Mutualities shall not be allowed to hold new co-insurance operations, or to amend or extend those already held.

Identical prohibition shall apply to reinsurance operations held by the National Confederation.

5. The associations of social welfare insurance companies which on 10 November 1995 carried out reinsurer activities shall not be subject to the prohibition laid down in Article 64 (4) and may continue to do so, subject to the rules laid down in Article 64 (4). of the exclusively reinsurers entities contained in Articles 57 and 58, in the form, conditions and adaptations to which they are regulated.

Additional provision 10th. Preferred credit coverage.

In the event of claims which, as provided for in this law, may be given preference over those of the insured persons, beneficiaries and injured parties referred to in Article 73 of Law 50/1980 of 8 October 1980, insurance contracts, and which are accounted for or should be such as to be liquid, overdue and enforceable, the insurance institutions shall at all times have their amount invested in qualifying assets as eligible for the coverage of technical provisions.

First transient disposition. Transitional arrangements for the amendments made to measures for the reorganisation and liquidation of insurance companies by Law 34/2003 of 4 November of 4 November amending and adapting to Community legislation private insurance.

The amendments introduced in Law 30/1995, of 8 November, of the management and supervision of private insurance, in the area of measures for the consolidation and liquidation of insurance institutions, by Law 34/2003, of 4 November, amending and adapting to Community legislation on private insurance legislation, shall apply to the measures and procedures adopted or initiated after 6 November 2003.

The reorganisation measures and winding-up procedures of insurance institutions, adopted or initiated, respectively, prior to that date shall be governed by the provisions which result from them being applied in the the time of its adoption or opening.

Second transient disposition. Adaptation of the insurance companies to the new guarantee fund requirements introduced by Law 34/2003 of 4 November, amending and adapting to the Community rules of private insurance legislation.

On 31 December 2006, the insurance companies must have adapted to the new requirements of the guarantee fund provided for in Article 18 of this Law. The adaptation shall be carried out linearly or by another systematic criterion agreed by the institution with an irreversible nature, communicated to the Directorate-General for Insurance and Pension Funds within one year from 1 January 2004.

The entities that foresee not being able to meet the new solvency requirements on the date indicated must submit, by that date, for approval by the General Directorate of Insurance and Pension Funds, according to the provisions of Article 39 of this Law, a plan setting out the measures to be taken, indicating the conditions and the time limit, which may not exceed two years, in order to achieve, in any event, the new requirements of solvency.

Social security funds which do not operate by insurance classes shall have a maximum period of 10 years from 1 January 2004 in order to achieve the amount of financial guarantees as set out in paragraph 2. of Article 67. To this end, an adaptation plan shall be submitted within one year from 1 January 2004 to lay down the measures to be taken, which shall determine the amounts to be set in each financial year and the sources of financing. to cover the differences arising from the new requirements, in a linear manner or through another systematic criterion agreed by the entity.

Transitional provision third. Temporary adequacy of references to Article 10 of Law 47/2003 of 26 November, General Budget.

The reference that Article 36 of this Law makes to Article 10 of Law 47/2003, of 26 November, General Budget, shall be understood, until 31 December 2004, to be understood as the corresponding article of the text recast of the General Budget Law, approved by the Royal Legislative Decree 1091/1988 of 23 September.

Final disposition first. Bases for the management of insurance and exclusive competencies of the State.

1. For the purposes of Article 149.1.11. and 13. of the Constitution, the provisions contained in this law and in its regulatory provisions for development which are indispensable to it in order to guarantee the objectives of the planning and completing the basic regulation defined by it are considered to be the basis for the management of insurance, except for the following articles or paragraphs:

(a) paragraphs (a) and (d) of Article 23.1 and paragraph 2 of this Article; Article 24; Article 25 (5) and (7); Article 27 (4); (a) of paragraph 2 (a), (b) and (e) of paragraph 3; and Article 28 (4); Article 29 (1) and (3); Articles 31 to 37; Article 58; Article 61; Article 62 (2) and (3); Article 64 (3) (j); Article 72.4, 5, 6 and 7; Article 73; and Article 74, which shall not be of a basic character.

(b) The provisions that paragraph 2 declares as exclusive competence of the State.

2. They are the exclusive competence of the State:

(a) In accordance with Article 149.1.6. of the Constitution, the matters governed by Article 30.

(b) In accordance with Article 149.1.8. of the Constitution, the matters referred to in Article 29.2 and in Article 80.4 and 5.

Final disposition second. Regulatory authority.

It is up to the government, on the proposal of the Minister of Economy and Finance, and after hearing the Advisory Board of Insurance and Pension Funds, to develop this law in matters that are expressly attributed to the power of the regulatory, as well as, in general, all those susceptible to regulatory development in which it is necessary for its proper implementation, by the adoption of its regulation and any subsequent amendments to it that are necessary.

It is up to the Minister of Economy and Finance, after hearing the Advisory Board of Insurance and Pension Funds, to develop this law in matters that he specifically attributes to the regulatory authority of that minister. and, likewise, develop their regulations as soon as necessary and thus be provided for in it.

The regulatory development of the precepts relating to social welfare mutual societies shall be carried out by the Government through a specific regulation for such mutual societies.