JOHN CARLOS I,

KING OF SPAIN

To all who present it and understand,

Sabed: That the General Courts have approved and I come to sanction the following Law:

Private insurance legislation is an institutional unit which has been characterised by rules of private law and public law in the latter area for its role in protecting policyholders. and beneficiaries, since the insurance operation involves the change of a benefit present to another possible and future one, which shows that there is a public interest in the provision of such a benefit when the disaster will eventually occur. Hence, the private insurance institution has been subject to an official supervision aimed at verifying that the companies maintain a situation of sufficient solvency to fulfil their social object.

State control, which calls for market unity and the principles of division and dispersion of risks, takes place through a set of administrative actions that set out the precise financial requirements for to the insurance market; the rules as in the legal orders. financial and technical companies should follow the companies to act on it; and, finally, the definition of the circumstances and situations determining the exit of the market of an insurance institution when it lacks the minimum conditions of solvency.

This scheme, from the solvency control regulations.

This scheme, of the regulation of the solvency control of insurance companies, is of general application, since to it the almost totality of the countries of free economy are adjusted.

Now, in order for the control system to be effective, it must act on real and current situations, so that its legal order must be adapted to the constant changes of all order. of time reveals as necessary.

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

Their fundamental bases on prior control, while guaranteeing, to a certain extent, that there would be no reckless action on the part of the companies, limited the field of action of the same, the business initiative.

As for the Law of 16 December 1954, until now in force, it did not have a systematic development so that it maintains the same conception of control without giving it the means and instruments to adopt the corrective measures. It has reduced the effectiveness of the official surveillance action.

The time elapsed has revealed that the Law of 16 December 1954 was increasingly far removed from the actual market situation, a separation that could never be shortened, despite the profusion of rules, as a lack of new concept of solvency control and take a number of measures which will rationalise the insurance market by giving it greater competitiveness and transparency.

On the other hand, the existence of new needs for risk coverage, innovations in the field of insurance with effect in international areas; the necessary market unity that reality imposes and which also derives Spain's possible accession to the EEC, as well as the guidelines of the current legislation of the latter, must have an impact on any regulation it wants to take on the insurance sector.

And as the legal norms must justify their purpose and constitute the ideal instrument to solve the problems that they want to address, this Law guides its principles in a double aspect: Ordination of the marking of insurance in general, and control of the insurance companies in particular.

I. As for the first point, the Law aims to achieve these 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 is necessary to include in the new regulation to the social provident entities, in their day accepted to the Law of 6 December 1941, in order to submit them to the same control of solvency as the other societies insurance, by deleting the various administrative jurisdictions which are now subject to and integrating them into these effects, on a unitary basis, in that specifically dedicated to insurance control.

This is without prejudice to maintaining the technical and social characteristics of such entities that are more consistent with their purpose. Therefore, the Law incorporates a somera regulation of these entities in a specific chapter. It sets out its basic requirements and the characteristics that distinguish them from other entities operating in the market for risk cover, taking into account the competences that some Autonomous Communities have taken on them. through the respective Statutes of Autonomy.

b) To encourage the concentration of companies and consequently to restructure the sector in the sense of giving way to more competitive groups and companies nationally and internationally and with lower management costs.

(c) Leverage the national reinsurance market, through which the full national retention period should be made full use.

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

(e) Clarify the scheme concerning the legal forms of insurance undertakings by ordering the structure of the mutual societies, insufficiently regulated, and giving entry to the legal figure of the cooperative society of insurance.

To achieve these ends, and in accordance with the provisions of Article 149. 1. 6., 11. and 13. The Constitution provides for the basis for the management of insurance. These are the bases which necessarily have to be broad, since the insurance activity must be carried out in compliance with the Law of the Large Numbers and is essentially international, which requires a certain uniformity of the rules that regulate it in order to facilitate the relationship between national and other entities with the international markets whose practices it is essential to respect, and also because of the financial importance of the sector within the country's economy and its character the market unit, and even in the event that the market unit is Statutes of some Autonomous Community recognize the same exclusive competence over certain insurance entities, they must be subject to the high financial control of the State in order to achieve the necessary coordination of the planning general economic activity provided for in Article 149. 1.13. of the Constitution.

II. With regard to the specific aspect of the control of insurance companies, the role of the administration is based primarily on the following guidelines:.

(a) Regulate the conditions of access and exercise of the insurance activity, enhancing the prior financial guarantees of the institutions and enshrining the principle of solvency, which must be accentuated and specially designed to its technical and financial aspects.

(b) Heal the sector by avoiding, as far as possible, that the insurance companies should slip into insolvency. In cases of difficulty for them, take the corrective measures and, where appropriate, rehabilitating measures which produce the minimum damage to the insured and employees.

In this line, and according to Articles 51 and 149.1.1. and 13. of the Constitution, it seeks the protection of the consumers and the planning of the sector so closely related to the basic planning of the economic activity of the Nation in order to strengthen that protection and the competitiveness of the market the control body for the private insurance of instruments suitable for this purpose, such as the precise precautionary measures which will enable companies to overcome any crisis situations.

(c) Protection of the interests of the insured and the beneficiaries covered by the insurance, not only through the activity of supervision over the insurance companies, but also with a number of measures, including the preference for their claims vis-à-vis the insurer; the setting up of conciliation committees to resolve differences between policyholders and insurers in relation to small claims; and the protection of the freedom of the insured to decide on the hiring of insurance and to choose insurer, all of which gives compliance to the provisions of Article 51 of the Constitution.

(d) Finally, it has been considered appropriate to adapt this activity to international guidelines and practices on insurance and reinsurance mediation. Certain professional activities related to insurance, such as expert experts, commissioners and breakdown liquidators, are also officially institutionalized.

CHAPTER FIRST

General provisions

Article first.-Subject to this Law.

1. The purpose of this Law is to establish the basic management of private insurance and to regulate its control in order to protect the rights of the insured person and to promote and channel the exercise of the insurance activity, promoting in all orders the development of private insurance.

2. It has the consideration of private insurance any insurance or forecast operation, whoever is the insured or the insurer, with the caveats that are set in the following number.

3. Provision shall not be made for systems of foresight which constitute compulsory social security.

Article 2.-Operations submitted.

They are subject to the provisions of this Law, in so far as they are applicable to them according to their characteristics and whenever they are or are to be fulfilled in Spain:

(a) Insurance and reinsurance operations.

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

c) The preparatory or complementary activities of the insurance or capitalization that the entities of this class practice in their channelling function of saving and investment, as well as their activities of prevention of damages.

d) The management operations of collective retirement funds that consist of managing investments and especially the representative assets of the reserves of the entities providing benefits in the event of death, in the case of life or invalidity, where a guarantee of insurance concerns the preservation of the capital or the acquisition of a minimum interest.

e) Mediation activities in insurance, reinsurance and capitalization contracts, without prejudice to the provisions of their specific legislation.

(f) The activities of insurance experts and commissars and breakdown liquidators, without prejudice to the provisions of their specific legislation.

Article second bis.-Operations allowed.

Insurance institutions may carry out collective retirement fund management operations which consist of managing investments and in particular the assets representative of the reserves of the entities that provide benefits in the event of death, in the event of life or invalidity in terms of the general legislation on pension funds.

Article 3.-Prohibited operations.

Insurance entities are prohibited from performing the following operations:.

(a) Those lacking in actuarial technical basis and those included in the so-called tontine and chatelusian systems.

(b) Contracts of participating accounts.

(c) The exercise of any industry or activity and the acceptance of liabilities or the granting of guarantees or guarantees other than those of the insurance business, unless they have obtained authorization from the Ministry Economic and financial affairs and, where appropriate, the competent ministries.

d) The mediation activities between policyholders and other insurance companies, without prejudice to the opening of the co-insurance company.

Article 4.-Entities and persons subject to the provisions of this Law.

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

(a) Those who practice in Spain the operations or activities referred to in Article 2 (2), as well as the organizations constituted on a permanent basis, for the distribution of the risk coverage or the provision to the insurance companies related to the insurance business, whatever their legal configuration.

(b) Persons and Bodies in charge of the management, representation or administration of the entities subject to this Law; the professionals who subscribe to the documents provided for in the Act or its accompanying provisions; and those for whom a ban or mandate is legally established.

(c) Natural or legal persons engaged in insurance and reinsurance mediation activities, without prejudice to the provisions of their specific legislation.

(d) Insurance experts and commissars and breakdown liquidators, without prejudice to the provisions of their specific legislation.

2. Autonomous bodies and companies or entities with the participation of public administrations or their bodies, which carry out operations covered by this law, shall carry out these operations under conditions equivalent to the entities (a) shall be subject to the inspection referred to in Article 46; and the companies or entities with the participation of the public authorities or their public authorities shall be subject to the inspection referred to in Article 46; bodies shall comply with this Law. This Law shall also apply as a supplement to the specific provisions governing them.

Article 5.-Scope of this Law.

The provisions of this Law shall apply to all insurers and reinsurers, as well as to natural or legal persons engaged in mediation activities, without distinction of nationality, provided that they operate in Spain. However, when in fact or in law in the countries of origin of those entities or persons, the Spanish Ministry of Economy and Finance is required to provide the Spanish with greater guarantees or requirements than to nationals or to be recognized as minors. it shall establish, on a reciprocal basis, other equivalent conditions in its terms or in its effects for the country concerned.

CHAPTER II

Conditions of access to the insurance activity

Article 6.-Administrative authorization.

1. The entities that intend to carry out operations under this Law must obtain the corresponding authorization from the Ministry of Economy and Finance as a prerequisite and indispensable for exercising them, which will be granted whenever comply with the requirements set out in this Law and in its Rules of Procedure. Such authorization shall be granted by classes and at the request of the entities concerned, may be extended to the whole of the Spanish territory or to another minor area.

2. The same authorisation shall specify the organisations which are believed to be permanent, for the distribution of the risk coverage or the provision to insurance companies of common services related to the insurance business.

3. The exercise of the insurance activity by Spanish entity abroad, with permanent establishment, will require communication to the Ministry of Economy and Finance, thirty days in advance of the opening of the establishment.

4. The institutions shall adjust their internal arrangements to the statutes, the action plan and the documents which are approved for them and may only carry out operations in the branches and territorial areas for which they have been authorised.

5. The authorisations referred to above shall determine the entry in the register referred to in Article 40.

6. Contracts or operations under this Law, concluded with non-registered entities, shall be void in full, without prejudice to the responsibility of the contractors and third parties.

7. This liability shall be in solidarity with the institution and the administrators, directors or managers who have authorised or permitted the conclusion of such contracts or operations.

Article 7.-Nature of the insurance institutions.

The insurance activity may only be carried out by private entities which take the form of a public limited liability company, a mutual company at a fixed premium, a mutual company at a variable premium, a montepio or a mutual social security company, a company cooperative, and by the delegations provided for in Article 12. Self-employed bodies and entities which adopt any of the abovementioned legal forms, in which the participation of the public authorities or their bodies is a majority, may also be carried out by the insurance undertaking. directly or indirectly.

Article 8.-Social object.

1. The social object of the insurance institutions shall be the practice of insurance, reinsurance and capitalisation operations.

2. Institutions whose social object is the practice of operations in any form of life insurance, including capital life insurance, shall have exclusively such an object, without being able to extend their business to another class of transactions. of insurance, except where the agreements are complementary.

Article 9.-Denomination.

In the social denomination of the insurance entities subject to this Law, the words , or both, according to their social object, will be included, being reserved exclusively for those entities. Mutual and cooperative societies shall record their nature in the name and indicate whether they are a or .

Article 10.-Social capital and mutual fund.

1. Public limited liability companies and insurance cooperatives referred to in Article 15. 1, points (b) and (c) must have a registered capital in accordance with the classes in which they operate, with the amount not less than the following: Group I, pesetas 320 million; group II, 160 million; group III, 80 million; group IV, 40 million, and group V, 500 million. For the cooperatives of Article 15. 1, (a) that capital shall be 2 million. The subscribed capital must be paid at least 50%.

2. Group I shall comprise the class of life; group II shall comprise the classes of caution, credit and all those in which the risk of civil liability is covered; group III shall comprise the classes of accidents, sickness and all those which cover damage to matters and are not specifically included in another group; group IV shall comprise all classes of service provision, and group V shall comprise the activity exclusively reinsurer. The Ministry of Economy and Finance, or the advisory board, will classify those that may be in doubt.

3. Mutual societies shall establish a permanent mutual fund, provided by their partners or constituted with surpluses from the social exercises, the minimum amount of which shall be:

(a) For the fixed-premium mutual societies established as the paid-up capital in the number 1 of this article. However, for the mutual benefit of a passive-shedding scheme provided for in Article 13.2 (d), only three-quarters of that amount shall be required.

b) For mutual societies at variable premium, one million pesetas.

4. For institutions which only practice insurance in Group IV and limit their activity to a territorial area with less than two million inhabitants, half of the capital or mutual fund provided for in the preceding numbers shall be sufficient.

5. Institutions carrying out business in several classes of direct insurance other than life insurance or hiring them in combination shall have the capital or mutual fund corresponding to the class of the largest group.

Article 11.-Administrators and managers.

1. Directors or managers, general proxies or those who under any title carry the company's management shall be natural persons and must have their registered office and residence in Spain. They shall be entered in the register referred to in Article 40.

2. They may not be administrators, delegates, directors, managers, general proxies or carry under any other title the address of the undertakings:

(a) Incourses in incapacity, disablement or prohibition in accordance with the general regulations in force.

(b) Those who, as a result of a sanctioning file, have been suspended in the performance of their duties for the duration of the suspension; and those who have been removed for the five years following that of the removal.

(c) Insurance and reinsurance agents and brokers and the partners of the agency or brokerage companies.

d) Insurance experts and stewards and breakdown liquidators.

Article 12.-Delegations of foreign entities.

The Minister of Economy and Finance will be able to grant authorization and subsequent registration in the special register to foreign insurance entities to establish delegations in Spain provided that they comply with the following conditions: conditions:

(a) That in advance of not less than five years they are duly authorized in their country to operate in the branches in which they intend to work in Spain.

b) That they create a general delegation with permanent residence and establishment in Spain, where the accounting and documentation of the activity they develop are preserved.

(c) designating a general delegate, with domicile and residence in Spain, not in breach of the prohibitions in Article 11.2, and with the most extensive commercial powers to bind the entity to third parties and represent it before the Spanish authorities and courts; if the delegate is a legal person, he must have his registered office in Spain and designate, in turn to represent it, a natural person who fulfils the conditions set out above. Their designation shall be entered in the register referred to in Article 40. This delegate must obtain prior approval from the Ministry of Economy and Finance, who may revoke it in application of the principle of reciprocity, for reasons of good repute, technical qualifications or as a sanction, by agreement Use.

(d) to provide and maintain in their delegation in Spain a fund of amount not less than the paid-up social capital or minimum mutual fund required in Article 10, for Spanish entities carrying out the same activities, which shall be called the permanent central house.

(e) To provide and maintain in Spain a guarantee fund not less than half the minimum specified, and a quarter of the minimum referred to must deposit it as a security.

f) To present a program of activities and the documentation that is regulated.

g) To accompany the certificate of the control authority of your country of credit that it complies with the law of the country, especially in the area of solvency margin.

CHAPTER III

Mutual societies and insurance cooperatives.

Article 13.-Mutual societies and cooperatives at fixed premium.

1. Mutual and fixed-premium cooperatives are companies which have as their object the coverage of their partners, natural or legal persons, of the risks secured by a fixed premium payable at the beginning of the risk period, not being the transaction of insurance for the purpose of industry or profit for these entities.

2. The following rules shall apply to these companies:

(a) The condition of a partner or a mutualist shall be inseparable from that of the policyholder or policyholder in the manner that it is regulated.

(b) Each entity shall have at least 50 partners or mutualists.

c) Partners or mutualists who have made contributions to constitute the capital or mutual fund may receive interest not exceeding the legal interest of the money, and may only obtain the repayment of the amounts provided in the case referred to in point (f) of this number or when the general meeting is agreed to be replaced with surplus of the financial years.

(d) Partners shall not be liable for social debts unless the Statute establishes such liability, in which case it shall be limited to an amount equal to the amount of the premium which they pay annually and shall be highlighted in the insurance.

e) The results of each financial year shall give rise to the corresponding active or return spill and, where appropriate, passive, which shall be individualised and made effective in the following financial year; or property also in that financial year.

f) When a mutualist causes low in the entity, it shall be entitled to the copper of the active branches and the obligation to pay the agreed and unsatisfied liabilities; it shall also have the right to, after the approval of the accounts of the exercise of the discharge, the amounts which it has contributed to the mutual fund shall be returned to it, unless they have been consumed in compliance with the specific function of the mutual fund, and always with deduction of the amounts due to the entity. No other liquidation shall be carried out by the social estate in favour of the partner causing the discharge.

g) In the event of the dissolution of the entity, the mutualists who integrate it at the time the dissolution is agreed will participate in the distribution of the estate and those who do not belong to it at the time would have been in the a previous time, in accordance with those laid down in the Regulation, or, where appropriate, in the social statutes; all without prejudice to the right of the members to the mutual fund.

3. The fixed premium mutual funds shall be constituted by public deed which shall be entered in the Register. From the time of registration they shall have legal personality.

4. Such entities may operate throughout the Spanish territory and in all insurance classes, with the power to transfer and accept reinsurance in the classes in which they operate in direct insurance. The entities of which the reinsurance accepted by the mutuals do not acquire the status of their partners.

5. The Rules of Procedure provided for in the Sixth Final Disposition shall govern the rights and obligations of the members, without the possibility of establishing privileges in favour of any person; the governing bodies, which shall have operation, management and democratic control; the minimum content of the social statutes and the other extremes relating to the legal status of these entities.

Article fourteen.-Mutual societies and cooperatives at variable premium.

1. Mutual and cooperative at a variable premium are companies of natural or legal persons founded on the principle of mutual aid, which have as their object the common account of the risks insured to their partners or mutualists, by means of the recovery of claims after claims, with the responsibility of the same joint, proportional to the amount of the respective capital insured in the institution itself and limited to that amount, not constituting the operation of The insurance industry or profit for these entities.

2. In addition to the rules set out in paragraphs (a), (b), (c), (e), (f) and (g) of Article 13 (2) and the rules contained in Article 13 (5), the following shall apply to these entities:

a) They will adjust their operation to the program of activities approved by the Ministry of Economy and Finance.

(b) They shall require the input of an entry fee to acquire the status of a mutualist and shall constitute a wiggle fund which allows claims and expenses to be paid without waiting for the recovery of the branches. In cooperatives, these contributions are made as constituting the social capital.

(c) Administrators shall not receive any remuneration and the production of insurance shall be direct, without it being able to be paid.

(d) These mutuals shall be constituted in public deed which shall be entered in the Register referred to in Article 40 of this Law.

3. Such entities may operate in an insurance class only, which may not be included in groups I and II provided for in Article 10, except as provided for in Article 10 (4), and must carry out their activities and locate their activities. risks in a territorial area of less than two million inhabitants or in a province, except in the case of grants for sickness or aid for the death of persons joined by a professional link.

4. They can also make civil liability insurance complementary to fire insurance, within the limits of the value of the insured property.

5. The risks to be secured must be qualitatively and quantitatively and the insured capital and administrative expenditure may not exceed the limits set by the Ministry of Economy and Finance.

6. Mutual and cooperative at variable premium may yield reinsurance transactions prior to the communication to the Ministry of Economic Affairs and Finance and shall in no case be accepted.

Article 15.-Cooperative insurance companies.

1. Cooperative Insurance Companies may exercise the insurance activity in the following ways:

(a) To cover risks to its partners in the classes and to the requirements laid down in Article 14, not to apply Article 13 (3).

(b) To cover risks to its partners in the classes and to the requirements set out in Article 13 (2), (4) and (5).

c) As an associated form of work, to cover risks to any insured, subject to this Law and supplementary provisions, and respecting the limitations established to use the work of foreign persons cooperative

2. The authorization of the Ministry of Economy and Finance provided for in Article 6 must be obtained prior to registration in the Register of Cooperatives, with the latter being conditional upon obtaining the latter. Confirmed the registration, the entity shall carry out its activity subject to the provisions of this Law and supplementary provisions, although, in respect of its constitution and distribution of the liquid patrimony in case of dissolution, comply with the provisions of the legislation on cooperatives, as soon as they are not opposed to the present, and that will also apply as a substitute for these entities.

CHAPTER IV

Social Security Mutuals

Article sixteen.-Concepts and requirements.

1. Social Welfare Mutuals are private entities, operating at a fixed or variable premium, without profit, outside the framework of the systems of foresight which constitute compulsory social security, and exercise an insurance fortuitous and foreseeable nature, by means of direct contributions from their partners or other entities or persons protecting them.

In its name must necessarily be the indication of Mutual or Social Welfare Mutual or similar.

2. In order for the Mutualities and Montepios to have the character of social welfare institutions and to be able to enjoy the tax advantages provided for in the Laws, they must comply with the requirements and not exceed the limits indicated below:

a) That are not for profit.

b) That they only grant benefits or practice operations as provided for in this chapter.

c) Establish equal rights and obligations for all partners, without prejudice to the provision of contributions and benefits to the statutory relationship established with the circumstances in each of them.

d) The policyholder or policyholder condition will be inseparable from the partner.

e) Do not put other limits to enter in the mutual one than those provided for reasons justified in the Statutes approved by the control body.

f) Limit the liability of the partners for the social debts to a quantity 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 year current.

g) Do not pay any remuneration to the administrators for their management.

h) The incorporation of its members shall be carried out directly by the institution itself without mediation, and the administrative costs may not exceed the limit set by the Ministry of Economy and Finance or, where appropriate, by the institution competent authority of the Autonomous Community.

i) They will directly and fully assume the guaranteed risks to their partners without practicing co-insurance or reinsurance operations in any of their forms, except with their Federations or the National Confederation, who may give in between if the risks assumed, the latter may, in turn, transfer to third parties reinsurance the cumuls, subject to the authorization of the Ministry of Economic Affairs and Finance.

3. In the provision of risks to persons, the contingencies they may cover are those of death, old age, accident and invalidity for work, widower and orphan's, in the form of capital or income; health care and allowances for marriage, children, maternity and death, and the provision of services in any of its forms. The performance of services in any of its modalities. The economic benefits to be guaranteed may not exceed 1,200,000 pesetas as annual income and 5,000,000 as a single capital perception, limits that will be updated periodically by the government on a proposal from the Ministry of Economy and Finance.

4. In the case of risk forecasting, it is only possible to ensure those that are subsequently related and within the limits that are also identified:

(a) Protected or qualified housing of a social interest, provided that they are inhabited by the mutualist himself and his family or constitute essential annexes for the agricultural holding or family farming.

(b) Livestock, farm implements or agricultural machinery, when they are integrated into the family holding unit.

(c) Cosecs of farms directly and personally cultivated by the farmer, provided that they are not included in the Annual Plan for Agricultural Insurance Combined.

(d) Fishing and gear vessels for this when they are family heritage, own work instrument, and such vessels are less than 50 gross registered tonnes.

e) Goods of artisans, small industrialists and traders, in the case of natural persons and such goods, constitute instruments of work and the centre of which they have no more than five operators.

5. Each entity may grant all or part of the benefits referred to in the previous two numbers.

Article seventeen.-Conditions of access to the activity.

1. Natural or legal persons may constitute a social security mutual benefit. The minimum number of partners required will be 50.

2. Social security contributions shall be constituted by public deed and their promoters must apply for the corresponding administrative authorization, which shall be entered in the registers referred to in Articles 39 and 40. Once registered, they will have their own legal personality. 3. The rights of the members who have made contributions to the mutual fund, the application of the results of each financial year and the partial dissolution liquidation as a result of the discharge of a partner shall be in accordance with the provisions of the Article 13.

Article eighteen.-Applicable rules.

1. The social security contributions in respect of which the Autonomous Communities have taken on their exclusive jurisdiction shall be governed by this Chapter and by the rules of the Autonomous Communities which are given in the exercise of their powers. statutory powers, in accordance with Article 39.3.

2. The Social Welfare Mutualities whose competence corresponds to the State in accordance with Article 39.1 shall be governed by the provisions of this Chapter; in Chapters I, V (Articles 22, 23 and 27), VI, VII and IX; in the first, fourth and fifth; transitional provisions fifth and sixth; repeal provisions; by the rules that all these precepts develop and by the Statutes of each entity approved by the Ministry of Economy and Finance.

Article nineteen.-Financial guarantees.

1. The Social Welfare and Mutual Social Welfare (Social Welfare) will have to establish a mutual fund of 100,000 pesetas when the annual collection of quotas is less than 5,000,000 and does not exceed 25,000,000 and 1,000,000 in other cases. They shall also constitute a working capital with their assets which enables them to pay the claims and expenses without waiting for the recovery of the branches.

2. The Social Welfare Mutualities shall have the obligation to calculate and account for the technical provisions referred to in Article 24 of this Law, they shall have the solvency margin and the guarantee fund provided for in numbers 1 and 2 of the Article 25 not subject to the minimum amount of that fund, subject to the provisions laid down in Article 26.

Article twenty.-Scission and merger.

Social Security Mutual and Mutual Social Security (Social Security) Mutual and Mutual Social Security (Social Security) Mutual and Social Security (Social Security) Mutuals and Montepios may be divided and merged with others of their own nature and class in the terms provided for in

Article twenty-one.-Basic rules.

The forecasts contained in this chapter have the consideration of the bases for the organization of the insurance activity of the Mutual and Social Welfare Societies. Its legislative and regulatory regulation or development shall correspond, in accordance with Article 39, to the State and the Autonomous Communities in the exercise of the powers conferred upon them in their respective Statutes.

CHAPTER V

Conditions for the exercise of the insurance activity

Article 22.-Control of the State Administration.

1. The exercise of the activity, its advertising, the financial situation and the State of solvency of the insurance institutions are subject to the control of the State Administration, through the Ministry of Economy and Finance. accounting records and shall provide the documentation and information necessary for the exercise of such control in the form that is determined to be determined.

2. The exercise of the powers of control shall not constitute the State Administration responsible for the activities and operations of the entities subject to control, unless the damage caused is a consequence of the operation of the services public in accordance with the provisions of the general legislation.

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

Article twenty-three.-Statutes, policies and tariffs.

1. The Statutes of the insurance institutions shall comply with the provisions of this Law, their supplementary provisions and the legislation applicable to them in the alternative.

2. The content of the policies must comply with the Law of the insurance contract and the present.

3. The premium rates will respond to the freedom of competition regime in the insurance market and will respect the principles of fairness and sufficiency based on the rules of the insurance technique. the use of risk premiums based on common statistics shall not be of a restrictive practice in competition.

4. The models of policies, technical bases and premium rates will not require prior administrative approval, but must be at the disposal of the Ministry of Economy and Finance before use in the form and in advance. Regulation is established. However, prior administrative approval will be required when the initial or necessary authorisation is requested to extend the activity to new classes.

5. The Ministry may suspend the use of the documents referred to in No 4, where compliance with the provisions of the preceding numbers has not been justified and until such compliance has been established. It may also prohibit its use when the provisions of those numbers are not complied with.

6. The insurance institutions shall keep their documentation at the registered office which they have communicated to the Ministry of Economic Affairs and the Ministry of Finance and the Ministry of Finance shall send their letters to that address. If the correspondence was not carried out or the address was changed without communicating it, a notice will be published in the "Official State Gazette" which, for all purposes, will have the effectiveness of notification.

Article twenty-four.-Technical visions.

1. Insurance institutions shall have the obligation to calculate and account for the following technical provisions in the form of regulation: mathematics; ongoing risks; claims, capital due, income or profits of the insured persons who are still to be declared, to be wound up or to pay, and for the deviation of the default, and for premiums to be charged.

2. Technical provisions shall be invested in the assets to be determined by the Regulation in accordance with the principles of consistency, security, liquidity and profitability. That Regulation shall indicate the distribution, the limits and conditions to be met by the investments and the criteria for their valuation for the purposes of the coverage of technical provisions.

3. If there is a deficit in the coverage of the technical provisions, the Ministry of Economy and Finance may require the insurance institution to cover it within a period of 15 days. On the expiry of that period, the said Ministry may, by means of a reasoned decision, apply ex officio to such cover, to the extent necessary to supplement it, any kind of assets held by the institution and adopt the measures provided for in Article 42.

4. The term may be waived and the assets directly applied where the circumstances so give rise to any danger to the interests of the insured.

Article 25.-solvency margin and guarantee fund.

1. An insurance institution shall have in each financial year, as a solvency margin, a non-committed own property, deducted from intangible assets, in the amount determined by the Regulation of this Law.

2. The third part of the solvency margin fixed in accordance with the preceding number is the guarantee fund, which may not be less than 100; 50; 37,5; 20 and 125 million pesetas, for the entities operating in the classes respectively. falling within Groups I to V as referred to in Article 10 (2).

3. For mutual societies with a passive and cooperative spill-over scheme, the minimum guarantee fund shall be three quarters of the requirement for the other entities in its class and shall be exempt from that minimum the mutual benefit to the said institution. a scheme where the annual collection of premiums or contributions does not exceed 50 million pesetas, and does not operate in the insurance of civil liability, credit or caution.

Article twenty-six.-Limitation of activities.

1. Insurance undertakings which do not have their technical provisions totally covered or whose solvency margin does not reach the legal minimum, may not extend their territorial scope or open new branches or extend their commercial network by means of new ones. contracts with insurance agents; they will also not be able to extend their activities to other classes or insurance arrangements.

2. During the first three full years of activity, public limited companies, mutual societies and cooperatives will not be able to distribute dividends, carry out extortion or distribute returns. The profits or surpluses incurred within that period shall be fully applied to the provision of the legal reserve in the public limited liability companies to a reserve with the same regime in the mutual societies and in the cooperatives. Returns will be compulsorily incorporated into social capital.

Article twenty-seven.-Portfolio transfer.

1. An insurance undertaking may transfer all of the insurance contracts in force which integrate the portfolio of one or more branches in which it operates, except for the mutual and cooperative companies at fixed premium and at variable premium, to each other. may acquire the portfolios of companies of the same nature and class.

2. The general transfer of one or more branches shall not be the cause of the resolution of the insurance contracts transferred except in the case of mutual societies and cooperatives at variable premiums.

3. The transferee shall exceed the solvency margin established in accordance with Article 25 after the transfer.

4. The transfer shall require the approval of the Ministry of Economy and Finance, subject to public information, in which the insured may express, where appropriate, the reasons for their disagreement. It shall be formalised in public writing which shall be entered in the relevant registers.

5. Article 44 of the Staff Regulations shall be in accordance with the provisions of Article 44 of the Staff Regulations.

6. Partial transfers of a branch of a branch will also be allowed in cases determined by the Regulation, but then the policyholders will be able to resolve the insurance contracts.

Article twenty-eight.-Fusion, transformation and excision.

1. Public limited liability companies may merge with each other and absorb mutual and cooperative societies. The mutual and cooperative fixed premium may be merged with others of their own nature and class, and shall absorb each other and cooperatives, respectively, of variable premium. Mutuals and cooperatives at variable premiums may only be merged with others of their own nature and class.

2. In the cases referred to in the preceding number, the provisions laid down in Article 27 (2), (3), (4) and (5) shall apply.

3. Insurance institutions may be transformed into companies of other legal or class nature, authorised by this Law, in which case their insured persons may terminate insurance contracts and the provisions of numbers 3 and 4 shall apply. of Article 27.

4. An insurance institution may also constitute groups, associations or associations of undertakings, in accordance with the laws in force in force in general.

5. The transitional grouping of insurance undertakings to formalise their merger, which is constituted in order to act on the market as a single offeror unit, may be carried out by means of conventions and plans approved by the Ministry of Economic Affairs and Hacienda in accordance with the requirements laid down in regulatory standards. The merger must take place within a period of five years from the date of the conclusion of the grouping convention, which shall be formalised in public deed and shall contain the timetable for its implementation, the fulfilment of which shall result in the dissolution of the entities. Failure to comply shall result in the dissolution of the corresponding entities which at that time do not have the minimum guarantees required by the provisions of this Law.

From the official authorization of the agreement and until the merger takes place, the requirement provided for in Article 10 shall be met for each entity, provided that the sum of the financial guarantees held by the institutions (a) the amount referred to in that Article.

6. Institutions may also be divided into two or more of their own nature, in order to continue their separate activity or to be subject to independent mergers, the provisions of Article 27 (2) to (5) being applicable.

Chapter VI.

Revocation, dissolution and liquidation.

Article twenty-nine.-Causes of revocation and its effects.

1. The administrative authorisation granted for the exercise of the insurance and reinsurance activity shall be revoked in the following cases:

a) At the request of the entity itself.

b) When the entity ceases to meet any of the requirements set forth by this Law for the granting of the authorization.

(c) When a short-term rehabilitation or rehabilitation plan authorized by the Ministry of Economy and Finance has not achieved its objectives within the prescribed time limits.

(d) By expiry, where the entity has not commenced its business within one year from the date of the granting of the authorisation or when its lack of real activity is verified in one or more of the classes, directly or in combination with the terms determined by the Regulation of this Law for a period of two years. The expiry of the period shall be limited to the classes in which the inactivity took place and shall also take place in the case of total disposal of the portfolio of one or more branches.

e) As a sanction, pursuant to Articles 44 and 45.

f) By dissolution of the entity.

g) Loss of 50 per 100 of the fund required by Article 12, d).

(h) Where the delegation does not reach the guarantee fund and is not re-established in accordance with Article 42.

2. The government may also agree to revoke the authorization granted to foreign or Spanish entities with majority foreign participation in application of the principle of reciprocity or when they advise it in circumstances. Extraordinary national interest.

3. Where any of the reasons for revocation provided for in paragraphs (b) and (d) of number 1, the Ministry of Economic Affairs and Finance are concerned, before agreeing the revocation may give a time limit which shall not exceed six months for the institution to proceed to be remedied.

4. The revocation of the authorisation may affect a single class or all those in which the institution operates, as well as all or part of the territorial scope of its action.

5. The declaration of revocation shall determine the immediate suspension of the hiring and liquidation of the insurance operations in progress in the classes concerned, in accordance with the provisions of Article 31. If the revocation applies to all classes, the provisions of Article 30.1 (1) (i) shall apply.

Article thirty.-Causes of dissolution. 1. Insurance entities will be dissolved:

(a) For compliance with the term set out in its Statutes.

b) By the manifest impossibility of fulfilling the social end.

c) By the inactivity of the social organs in such a way that it is impossible to function.

(d) For having suffered losses in excess of 50 per 100 of the social capital or the mutual fund disbursed, not regulated by own resources or affecting available reserves.

e) For not achieving the minimum guarantee fund and failing to comply with the consolidation plan approved in accordance with Article 42.

(f) The number of partners is reduced to a figure below the legal minimum or not to perform passive rights under Articles 13 and 14.

g) By merger in a new entity, by absorption by another entity or by having fully ceded its insurance portfolio.

h) By declaration of bankruptcy.

(i) By revocation of the administrative authorisation in accordance with Article 29, when it affects all the branches in which the entity operates and such revocation is firm.

j) By agreement of your Board or General Assembly with the requirements established for this purpose.

k) For any other cause established in the existing provisions with the rank of Law or in the Social Statutes.

2. When one of the causes of dissolution is present, the company will communicate it within one month to the Ministry of Economy and Finance. If the

cause is susceptible to removal, the company may request time to remove it and the said Ministry will fix it, without it being less than one month and not more than six.

3. In the absence of any action taken by the social bodies when any of the causes of dissolution expressed in No 1 are present, the Ministry of Economic Affairs and Finance may convene the general meeting or assembly and appoint a person who the presence, and if the Board or Assembly did not become constituted, did not agree to the dissolution or did not remove its cause, it will proceed from its own initiative to the dissolution.

4. Agreements or administrative decisions for the dissolution of institutions shall be entered in the relevant registers.

Article thirty-one.-Settlement.

1. The dissolution of the company shall be agreed upon, the settlement period shall be opened, except in the case of merger cases or any other of the global transfer of assets and liabilities. During that period the entities shall retain their legal personality and their name shall be added to the words 'in liquidation'.

2. No new transactions may be concluded during the winding-up period, but the insurance contracts in force at the time of the payment shall remain effective until they have expired without the possibility of extension. In order to facilitate settlement, the Ministry of Economy and Finance, either ex officio or at the request of the liquidators, may dispose of the portfolio or agree that such contracts are due to a certain date.

3. The settlement shall be brought by the relevant supervisory body, where it deems appropriate, to safeguard the interests of the insured or other insurance undertakings and, in any event, in the case of delegations of entities foreign nationals whose headquarters have been dissolved.

4. During the liquidation period, where the dissolution has occurred due to the causes referred to in points (d), (e), (f) and (h) of Article 30.1, the institution may agree to its recovery and apply to the Ministry of Economic Affairs and Finance. rehabilitation of the administrative authorisation revoked in accordance with Article 29. Rehabilitation may be granted only if all the guarantees and conditions required during normal operation are fulfilled and no harm to the insured and other creditors, even for those whose claims have been cancelled during the liquidation period.

5. Those who were administrators, directors, managers or delegates of the entity at the time of their dissolution and those who had been in the five years prior to the date of its dissolution shall be obliged to cooperate with the liquidators in the acts of (a) to be settled with transactions from the time they had intervened, and to inform the Ministry of Economy and Finance, at their request, of the events that occurred during the performance of their duties.

6. The unjustified failure to comply with the requirement referred to in the preceding number may be administratively sanctioned in accordance with Articles 44 and 45.

7. The appointment, revocation, responsibility, competence and functions of the liquidators shall be governed by the law of the entity concerned, which shall be the subject of the Law on Limited Companies, with the following particularities:

(a) When the liquidators fail to comply with the rules that for the protection of the insured are established in this Law, or hinder the liquidation, the Ministry of Economy and Finance will communicate it to the institution for its immediate substitution.

(b) Where the entity does not make the appointment or replacement of the liquidators within 15 days of the date on which the said Ministry is appointed, the Ministry shall have the right to appoint them.

(c) The liquidators shall, within a period of not more than 15 days, submit to the Directorate-General for Insurance or the Financial Controller, if it has been designated, a duly valued inventory of the assets of the entity and a relationship of the known debts of the same, relating to the date of commencement of the liquidation; they shall notify the known creditors of the situation of the institution and shall make an appeal to the creditors not known by means of approved notices by the Financial Controller to be published in the Official Journal of the State and in two newspapers, at least (a) to make known the situation of the same and how to apply for the recognition of their claims, with the warning that those who do not make a claim within one month shall not be included in the list of creditors.

(d) The liquidators shall take all appropriate steps to complete the settlement as soon as possible, and may give up all or part of the portfolio and arrange for the rescue or early termination of the policies. The disposal of the buildings when the liquidation is brought can be carried out without auction, but it will require prior approval from the Ministry of Economy and Finance.

e) Reglamentarily the powers of the Interventors will be determined in the liquidation.

8. Once the liquidation operations have been completed, the Ministry of Economy and Finance shall declare the entity extinguished and the seats in the corresponding records shall be cancelled.

Article thirty-two.-Individual actions.

1. If no judicial declaration of bankruptcy has been filed and the liquidation of the Entity is brought by the Ministry of Economy and Finance, the individual shares which the insured persons have exercised before the commencement of the liquidation or during the course, they will be able to continue until they obtain a final judgment, but their execution will be suspended and the credit in their favor will be settled with those of the other insured. The same rule applies to other claims which do not result from insurance contracts.

2. However, at the end of a year after the judgment has acquired the character of a firm, the suspension shall be automatically lifted, without the need for a declaration or a decision on the matter, whatever the State in which the judgment is the settlement.

3. In the event of a court declaration of bankruptcy or of a contest, the Ministry of Economic Affairs and Finance shall continue the liquidation to the sole effect of distributing to the insured the amount of the goods referred to in Article 33 of this Law, by ceasing to intervene in respect of the remainder of the liquidation and shall provide the judicial authority with the assistance provided for in Articles 1,333 and 1,334 of the Civil Procedure Act and other applicable provisions; all without prejudice to the the right of insured persons in the bankruptcy or competition proceedings.

CHAPTER VII

Securing the insured

Article thirty-three.-Credit Preference.

The goods in respect of which the measures provided for in Article 42, 2 and (e) have been adopted shall be particularly and exclusively to ensure the right of the insured and the beneficiaries and, where appropriate, the costs of the settlement of the entity, without prejudice to the actual charges made prior to the respective registration record in which the condition is recorded.

Article thirty-four.-Conciliation committees.

1. Differences which may arise between injured parties or their successors, insured and beneficiaries with the insurance institutions, on the interpretation and fulfilment of insurance contracts, shall be settled in the form laid down in the ordinary legislation, unless the parties expressly agree to submit to the conciliation or arbitration provided for in this Article.

2. In the event of differences, the parties may voluntarily submit to the decision of the Conciliation Committees which shall be governed by the Government, with their competence, territorial scope and composition being determined, which shall in any case be three-way, with representatives of the administration, the insured and the insurance companies. The procedure of the Conciliation Committees shall be in accordance with the principle of the rule of origin, and the parties shall have the right to be heard and to present the evidence they deem appropriate.

The Commissions will resolve the conflict according to their loyal knowledge and understanding and their award will be firm and executive.

3. In any event, insurers and insured persons, insurers to each other and those with the reinsurers may establish the corresponding arbitration clause to resolve by private arbitration the differences that arise in the interpretation, application and execution of insurance contracts which they have subscribed to. The processing of the arbitration shall be in accordance with the provisions of the current Private Arbitration Law and the award shall be firm and enforceable.

4. The rules in force on the arbitration of equity will have an additional character for the arbitration established in this article.

Article thirty-five.-Administrative protection.

1. The Ministry of Economy and Finance will protect the freedom of the insured to decide the hiring of insurance and to choose the insurance institution, as well as to go to mediation and choose the mediators, if any.

2. Policyholders, policyholders and beneficiaries may communicate to the Ministry of Economy and Finance, for the purposes of administrative punishment and adoption of the relevant measures, practices contrary to the law or affecting their rights.

3. Such practices, as well as the repeated non-compliance with insurance contracts by an insurance undertaking, shall be administratively punishable under Articles 44 and 45.

Article thirty-six.-Inembargability of certain goods.

1. The goods referred to in Article 42, 2 and (e) shall not be taken on board, even if the entity is in liquidation.

2. However, where there are no other free goods with which to deal with obligations arising from insurance contracts, the relevant control body shall determine the goods on which the judgment may be enforced, except where decree the dissolution and settlement of the entity. If the judicial authority declares bankruptcy, it shall apply the provisions of Article 32.3.

CHAPTER VIII

Reinsurance

Article thirty-seven.-Reinsurance entities.

1. They may only accept reinsurance operations:

(a) Spanish public limited liability companies which have the sole purpose of reinsurance and are incorporated in accordance with the provisions of the legislation in force.

(b) Foreign reinsurance entities or groups of foreign reinsurance undertakings operating in their own country and establishing permanent delegation in Spain.

(c) Limited companies, mutual societies and cooperatives at fixed premium, national or foreign, which are authorized for the practice of direct insurance in Spain, in the same classes as the authorization.

(d) foreign insurance and reinsurance entities or groups of foreign insurance and reinsurance entities operating in their own country and having no delegation or establishment in Spain or, having such delegation, directly accepting them from their headquarters.

2. The entities referred to in points (a) and (b) of the preceding number shall require authorization from the Ministry of Economic Affairs and Finance, in order to obtain them, in the form which they shall regulate, the same requirements as for direct insurers and specific legislation for the control of changes, if any. That authorisation shall give rise to registration in the special register of insurance institutions.

3. Institutions falling under point (c) of No 1 may be authorised by the Ministry of Economic Affairs and Finance to accept reinsurance in other classes as a general rule, where the circumstances of the market advise them.

4. The entities referred to in point (d) of No 1 shall not require authorisation to operate exclusively for reinsurance acceptance, but they shall comply with the specific legislation for the control of changes. However, transfers to certain entities may be prohibited, in accordance with the principle of international reciprocity set out in Article 5.

5. The reinsurers registered in the Register provided for in Article 40 shall be required to calculate and reverse the technical provisions in the manner determined by the Regulation on the basis of the data provided by the (a) the deposit and the application of the deposits held by them for the purposes of the coverage.

6. Reinsurer entities and reinsurance brokers shall not extend their management close to policyholders or policyholders.

Article thirty-eight.-Retention plates.

1. Insurance and reinsurance undertakings shall freely establish their reinsurance plans and the corresponding retention periods shall be related to their economic capacity for the appropriate technical-financial balance of the undertaking.

2. If there is a manifest disproportion between the risks retained by the institutions and their economic and financial capacity, the Ministry of Economy and Finance may prohibit excessive retention which would endanger the stability of the undertakings, or which They are practically limited to performing mediation functions.

Chapter IX

Competition and administrative action

Article thirty-nine.-Powers of the Public Administrations.

1. The administrative competence of the State Administration in all matters related to private insurance and reinsurance corresponds to the Ministry of Economy and Finance.

2. The autonomous communities, in accordance with the provisions of their Statutes, shall have competence for the legislative development and execution within their territory, of the bases for the management of private insurance contained in this Law and provisions (a) to supplement it, in respect of direct insurance entities whose registered office, scope of operations and location of the risks to which they ensure are limited to the territory of the community.

3. As regards the insurance and montepios cooperatives or Social Welfare Mutual Social Security cooperatives not integrated in the Social Security and with the scope indicated in the previous number, in respect of which the Autonomous Communities have assumed in their Statutes exclusive competence, it will be up to them to lay down rules for their regulation, in compliance with the basis for the management of the insurance business, and to exercise the corresponding administrative powers.

4. In the cases provided for in Article 149 (2) of this Article, 1, 11 of the Constitution and the final provision of this Law, it is for the State to grant the administrative authorization for the exercise of the insurance activity and its revocation, which shall, where appropriate, communicate to the respective Autonomous Community, as well as the control of these entities, without prejudice to the powers which, in respect of such control, correspond to the communities According to that final provision. In the cases of number 3, in accordance with the provisions of Article 149, 1, 6 and 13 of the Constitution, the State is responsible for the high economic and financial control of such entities, for which the autonomous communities will communicate to the Ministry of Economy and Finance each authorization they grant to a new entity, as well as its revocation. For both the number 2 assumptions and the number 3 assumptions, the communities shall send the statistical-accounting data of each institution to the Ministry each year, maintaining the necessary collaboration between the State Administration and the of the respective Autonomous Community, for the purpose of homogenising documentary information and coordinating, where appropriate, the activities of both administrations.

Article forty.-Special register.

The Ministry of Economy and Finance will carry a Special Register of the entities subject to this Law. It shall also include the registration of the reinsurance brokers, the breakdown experts and the senior officials of the entities and the organizations of the entities for the distribution of risks in co-insurance or the provision of common services. It shall also be registered with the titles of Insurance Agents which the Ministry grants and the certificates of sufficiency issued to the agents concerned. The records shall be public.

Article forty-one.-Promotion of insurance.

1. The Ministry of Economic Affairs and Finance, in coordination with the other competent authorities, shall encourage the recruitment of transport insurance companies in Spain or any other class resulting from exports and Spanish imports.

2. Vessels, aircraft and vehicles registered or registered in Spain, or goods of any kind located on Spanish territory, shall not be insured abroad, with the sole exception of goods under international transport. Nor can Spanish residents in Spain, as far as their persons or their responsibilities, be assured abroad, unless they are on international travel and for the duration of the trip. However, the Minister for Economic Affairs and Finance may authorise the insurance abroad of goods, persons and liabilities, exceptionally and for specific operations.

3. It is also prohibited to stipulate in Spain direct insurance operations with foreign entities that are not legally established in Spain or to do so with agents or representatives working for them.

4. The Government, acting on a proposal from the Ministry of Economic Affairs and Finance, may authorise and regulate the hiring of foreign-currency insurance, as well as the reinsurance of such operations, with application of the technical provisions of the principle of congruence money.

Article forty-two.-Precautionary measures.

1. The Ministry of Economy and Finance may adopt the precautionary measures contained in this Article where the insurance institutions are in one of the following situations:

(a) accumulated losses in excess of 25 per 100 of its registered capital or mutual fund, or of the fund referred to in Article 12, (d).

(b) Deficit of more than 5% in the calculation of the mathematical provisions, in the case of ongoing risks or of the deviation of the balance and the 20% of the outstanding claims.

(c) Deficit of more than 10% in the coverage of technical provisions.

(d) Failure of the solvency margin or guarantee fund referred to in Article 25.

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

(f) Situations in fact, 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 inadequacy or irregularity in the accounting or administration, in terms of preventing the entity's assets from being disclosed.

g) The existence of a cause of dissolution in the cases provided for in Article 30 (b), (c) and (i).

2. Irrespective of the sanction to be applied where appropriate, the precautionary measures in accordance with the characteristics of the situation may consist of:

a) Require the entity to submit a rehabilitation plan, approved by its Board of Directors or Board of Directors within one month, in which appropriate financial, administrative or other measures are proposed (a) order, make provision for those highlighted and set the time limits for its implementation, in order to overcome the situation which gave rise to that requirement. The plan will last for a maximum of three years and will concretize in its form and periodicity the actions to be carried out. The Directorate-General for Insurance shall approve or reject it within one month and, where appropriate, fix the frequency with which the institution shall report its development.

b) Require the institution to submit, within one month, a short-term consolidation plan, approved by its Board of Directors or Board of Directors, in which the form, amount and periodicity of the contributions of new resources in order to overcome the situation which has led to such a request. The plan shall be for a duration not exceeding one year and the Directorate-General for Insurance shall, where appropriate, determine the expert's report on the development of the plan.

c) Suspend the hiring of new insurance by the entity or acceptance of reinsurance. the suspension may not be extended to a date after the approval of the rehabilitation or recovery plans required in accordance with the preceding paragraphs.

d) prohibit the institution which, without prior authorization from the Ministry of Economy and Finance, can make the investments payments to be determined, to contract new debts, to cancel the credits resulting from the liquidations; Article 13, 2 (f), distribute dividends or active branches and hire new insurance or admit new partners.

(e) to prohibit the provision of goods to be determined, which shall be left under the responsibility of a depositary accepted by the relevant control body. This measure may be supplemented by appropriate measures to ensure that the prohibition is effective against third parties, such as the notification to the deposit of cash or securities and the entry in the public registers. (a) to which the decisions of the Ministry of Economic Affairs and Finance or, where appropriate, the control body of the Autonomous Community shall be registered.

(f) To prohibit the exercise of the insurance activity abroad with permanent establishment, when it is appreciated that this contributes to the situation that has motivated the adoption of precautionary measures.

g) Call the entity's administrative bodies, designating the person to chair the meeting and account for the situation.

h) suspend all or some of the administrators in their duties, and the entity should designate the persons who, previously accepted by the Ministry of Economy and Finance, have to replace them. If the institution fails to do so, the Ministry may designate it.

i) To order the execution of corrective measures of the unfavorable trends recorded in their economic development during the last exercises.

j) Intervening the entity to verify and guarantee the correct fulfillment of specific orders emanating from the said Ministry, when in another case such orders could be infringed and of this result to immediate or immediate detriment for policyholders.

3. In order to take the precautionary measures provided for in this Article, the corresponding administrative procedure with prior hearing of the entity concerned shall be instructed. Such measures shall cease by agreement of the Ministry of Economic Affairs and Finance when the reasons for which they have been removed have disappeared.

4. In the cases of failure to comply with the measures provided for in issue 2, the plans in question were not to be infeasible, and in the event of failure to require such plans to understand the administration that the situation of the The Ministry may make its recovery impossible, the Ministry may give publicity to the measures which have been adopted for general information.

Article forty-three.-Administrative infractions.

1. Infringements of the system of private insurance shall be subject to administrative penalties, without prejudice to the responsibilities required under the provisions arising from the rest of the system. Infringements of the statutory rules of the insurance or reinsurance undertakings, insurance or reinsurance undertakings, insurance, curating or winding-up insurance companies may also be the subject of administrative penalties for the purposes of administrative penalties. breakdown, when they seriously disrupt their operation or are harmful to the insured.

2. Administrators, directors or managers who, by means of intent or gross negligence, execute or permit transactions which infringe the provisions of the insurance legislation, shall be liable for any damages to the institution or to the insured as a result of the infringement, without prejudice to the penalties provided for in the following Article. The professionals referred to in Article 4 shall be subject to the penalties provided for in the following Article for infringements which are imputable to them, without prejudice to the responsibilities which, where appropriate, lay down their Statute. professional.

3. The offences are classified as minor, serious and very serious. Where a recidivism is incurred within the three-year period, the penalty indicated for the immediately higher gravity breach shall apply.

4. The following minor infringements shall be considered:

(a) The defect in the calculation or irregular investment of technical provisions, in amounts less than 5% of its overall amount.

b) Inaccurate or inappropriate information to policyholders or insurers made by insurance or reinsurance agents and brokers, insurance assessors and commissars or breakdown liquidators.

(c) The delay is less than one month in compliance with the time limits laid down in this Law, in the supplementary provisions or in the administrative resolutions, for the submission of documents or reports.

(d) Failure to comply with any other obligations or prohibitions laid down in the Statute of the entities or in the supplementary provisions of this Law, provided that they are not expressly qualified as serious or very serious.

5. The following shall be considered as serious infringements:

(a) The infringement referred to in point (a) of No 4, in amounts exceeding 5% and less than 10%.

b) Incorrect application of premium rates and contractual documentation.

c) Make discounts not provided for in the applicable premium rates.

(d) The offence referred to in point (c) of No 4, where the delay is one month or more.

(e) The defect in the solvency margin in amounts less than 5% of the corresponding amount, as well as the failure to comply with the recovery or rehabilitation plans provided for in Article 42.

(f) Failure to comply with any other obligations or prohibitions laid down in this Law, provided that they are not expressly qualified as minor or very serious.

6. The following are considered to be very serious:

(a) The infringement referred to in point (a) of No 4, in amounts exceeding 10%.

(b) The infringement referred to in point (b) of the number 4, where it is due to bad faith or intent, and the coercion in the procurement of insurance or mediation therein.

(c) The offence referred to in point (e) of number 5, in amounts exceeding 5%, and the default in the guarantee fund even if it is less than 5% of the corresponding amount.

(d) The conduct of insurance or reinsurance operations by an unauthorised person or whose authorisation has been revoked.

e) The use of contractual documentation, technical bases or tariffs, without complying with the provisions of Article 23 and complementary provisions; as well as participating in restrictive practices of competition.

f) The exercise of the profession of insurance or reinsurance agent or broker, sub-agent, insurance-appraiser and commissioner or fault-liquidator, without meeting the legal conditions; his/her financial year by person, as well as that interposition. The infringement shall also reach the entity which has used the services of these persons.

g) Repeated non-compliance with insurance contracts or abusive practices that harm the rights of policyholders or insurers.

h) The dolloy alteration of the balance sheet, profit and loss account and solvency margin statements.

i) The resistance to the inspection provided for in Article 46 in the performance of its duties.

j) The repeated non-compliance with the agreements or resolutions emanating from the Directorate-General for Insurance.

Article forty-four.-Sanctions.

1. The administrative penalties shall be as follows: warning; fine, suspension for a maximum period of three years or removal of the directors, directors or managers and delegates of foreign entities; suspension for a period of time a maximum of three years or a definitive disablement for the pursuit of the profession in the insurance sector of the professionals referred to in Article 4, insurance or reinsurance agents or brokers; revocation of the administrative authorisation and the resulting dissolution of the entity. Penalties for fines for natural persons and for suspension, removal or disablement are compatible with each other and with which they are imposed on institutions.

2. For each infringement, some of the following penalties may be imposed: for minor faults, warning and fine up to 100. 000 pesetas; for the serious, fine of 100,001 to 500,000 pesetas, and for the very serious, fine of 500,001 to 2,000,000 pesetas. The suspension, removal or disablement will apply in case of repeated non-compliance with the current regulations. The revocation of the administrative authorisation shall apply in the case provided for in Article 43, 6, j).

3. In order to graduate the penalty, account will be taken of the seriousness of the facts, the recidivism, the incidence of the infringement on the market, the volume of business, the fact that the lack of initiative has been remedied, and all the others who participate. There is a recidivism when the person responsible for the infringement has been punished by virtue of a firm resolution for an infringement to which this Law indicates the same or greater sanction, or for two or more to which the minor sanction.

4. Fines which are imposed jointly on the components of collegiate bodies shall be apportioned among those responsible, and in the event of total or partial insolvency of the latter, the institution shall be liable.

5. The Presidents of the sanctioned entities shall give an account to the other administrators of the sanctions imposed and, where the sanctioning agreement so provides, to the General Assembly or Assembly.

Article forty-five.-Procedure and competence to sanction.

1. No penalty may be imposed without prior examination of the file by the Ministry of Economy and Finance with a hearing of the persons concerned and in accordance with the Law of Administrative Procedure.

2. The Directorate-General for Insurance shall be responsible for the resolution of the cases in which penalties for warning are imposed, a fine of up to 500,000 pesetas and a suspension of up to one year referred to in Article 1 of the previous Article. In other cases, the Minister for Economic Affairs and Finance will be competent.

3. The Ministry of Economy and Finance will have the power to implement the resolutions passed on to the sanctioning files, and direct compulsion may be obtained for the inauguration of offices, books and documents for the delivery of the documents. administrators, liquidators or controllers appointed for this purpose, without prejudice to the passing, where appropriate, of the fault of the courts and the exercise of the appropriate action.

Article forty-six.-The Insurance Inspectorate.

1. The Ministry of Economy and Finance shall be subject to the inspection by the officials of the technical body for the inspection of insurance and savings, the natural, legal and other persons referred to in Article 4. The inspection may cover its legal, technical and economic-financial situation, as well as the conditions under which it carries out its activity, and all of this in general or in relation to particular questions.

2. The inspectors, in the performance of their duties, shall have the status of officials of the public authority. They shall be bound by the obligation of professional secrecy, even after the exercise of their public function.

3. The inspector shall also be able to carry out operations which may in principle qualify as insurance, in order to check whether the activity is carried out without prior administrative authorisation.

4. Inspectors shall have free access to the registered office and establishments, premises and offices in which activities are carried out by the entity or person inspected and may examine all documentation relating to their operations or request that It is presented to them, coming to them to give them the maximum facilities for the performance of their mission.

5. The inspected entity or person shall have the right to make representations to the inspection report within 15 working days of the inspection.

Article forty-seven.-Collaboration to the administrative action.

1. Insurers, mediators, professional associations, business organisations and trade unions related to the insurance business will actively collaborate for the best compliance with the provisions of this Law.

2. Professional bodies, official chambers, business organisations, trade unions, consumer associations and any other person or entity may inform the Ministry of Economic Affairs and Finance of the facts they consider may be subject to administrative sanctions or entities related to Article 4. and insured persons who may, directly or indirectly, affect their interests; they may also bring to the attention of that Ministry the actions which may result in disturbances on the Spanish insurance market.

Article forty-eight.-Insurance-appraisers, breakdown stewards and breakdown liquidators.

1. The Ministry of Economy and Finance shall exercise control over the natural or legal persons carrying out the activities of insurance experts, breakdown commissioners and breakdown liquidators. It shall lay down the conditions to be fulfilled for its action in the insurance sector, for the obtaining of the corresponding title and registration, in the special register provided for in Article 40, and shall lay down the legal arrangements for its action.

2. Insurance experts, breakdown commissioners and breakdown liquidators may be involved in professional or business organisations, which will be linked to the administration through the Ministry of Economy and Finance.

The control and relationship with the administration referred to in the preceding numbers shall correspond, where appropriate, to the competent authority in respect of natural or legal persons acting exclusively on the territory of the territory of the of a community.

Article forty-nine.-Advisory Board of Insurance.

1. The Ministry of Economy and Finance will run the Advisory Board of Insurance, which will be President of the Director General of Insurance, and Secretary, an Inspector of the Technical Corps of Insurance and Savings Inspection. Members of the Board of Directors shall be prominent representative of the Administration, insured persons, insurance and reinsurance entities, trade union and business organizations, corporations and organizations related to private insurance. and with consumers, whose collaboration is deemed appropriate.

2. The Advisory Board of Insurance shall act as an advisory body to the Ministry of Economic Affairs and Finance in matters which it submits to its knowledge. Your report will not be binding.

FINAL DEVICES

First.-1. For the purposes of Article 149.1.11 of the Constitution, the provisions contained in this Law are to be considered as bases for the ordination of private insurance, except for the following paragraphs or articles thereof: Article 26 (4), (5) and (6); Article 27 (2), (5) and (6); Article 28 (3), (4) and (6); Article 31.3, (4), (5) and (6); Article 34; Article 35.2 and (3); Article 38 (1); Article 40; Article 47; Article 48.2 and Article 49.

2. Notwithstanding the basic character of certain precepts in accordance with the provisions of the preceding number, the provisions of Article 39 of this Law shall apply, in respect of the entities and persons referred to in Article 39, respectively, of the Article 3 (2) and Article 48 (3), the Autonomous Communities may execute the powers granted to the Ministry of Economic Affairs and Finance in the following Articles: Article 3. (c); Article 14. 6; Article 24. 3; Article 27. 4; Article 29.3; Article 31.2; Article 31.7 (a) and (b); Article 32.1 and 3; Article 35.1; Article 36.2; Article 38.2; Article 42.1; Article 42.2 (a), (b), (c), (d), (e), (g), (h), (i), and (j); Article 42.3; Article 42.4; Article 43.6. (j); Article 45.1, 2 and 3, and Article 46.1. The powers referred to in the following Articles shall, on the other hand, be exclusively referred to in the following Articles: Article 5; Article 6.1; Article 6.3; Article 10.2; Article 12, initial paragraph; Article 16.3; Article 22.1; Article 28.5; Article 29.1. (c); Article 31.8; Article 37.2; Article 37.3; Article 41.2; Article 41.4; Article 48.1; final provision second; Final provision fifth; Final provision sixth, 1 and 2; Transitional provision seventh, 2; Additional provision first; and Additional provision third, 1. f).

Second. -Social welfare institutions acting exclusively as a substitute for compulsory social security shall be excluded from the scope of this Law. Those entities which carry out activities or grant benefits in addition to social security substitutes shall establish the economic and financial separation of resources and assets affected by the benefits of the Social security, to which the institution replaces, from the affections to the voluntary Social Welfare. The indicated separation shall be made within the time limit provided for in the Transitional Provision 4. 1, and once approved by the Ministries of Economy and Finance and Labour and Social Security, the entity shall be divided and the one that continues with the non-subtracted part of social security shall be governed by the rules relating to the Mutual Insurance This Law is contained in this Law. In the meantime, the rules that guarantee the solvency, liquidity and responsibility of the aforementioned entities will be jointly issued by the aforementioned ministries.

Third.-Capitalization entities covered by the Law of 22 December 1955, which at the entry into force of the present practice practice operations which are subject to it, shall be registered as a trade in the registry Article 40 as life insurance entities shall be adapted within one year from the publication of this Law, its social object to the rules laid down in Article 8.

Fourth.-The insurance companies are obliged to enter the 2 per 1,000 of the reinsurance accepted on an annual basis, to the attention of the expenses of the control services derived from this Law; the personnel, material and other essential for the purposes of the settlement of entities which lack sufficient liquid assets, without prejudice to their amount in the distribution of social security; and the derivatives of the institutional promotion of the prevention and private insurance. Its collection and administration shall be carried out by the insurance compensation consortium who shall satisfy the treasury the amount of the expenditure incurred in each financial year.

Fifth.-The Government on a proposal from the Ministry of Economy and Finance:

(a) It shall regularly update, by applying the appropriate corrective index, the minimum amounts of the social capital and mutual funds provided for in Articles 10 and 19, as well as the fines laid down in Articles 44 and 45 and the Fund the minimum guarantee provided for in Article 25.2 and the volume of premiums referred to in Article 25.3.

(b) It may reduce and, if appropriate, restore the types of perception set out in the fourth final provision.

(c) to extend, to classes other than life, the exclusivity provided for in Article 8., 2, where the characteristics of the same determine peculiarities in the structure of the insurance undertaking, or the safeguard of the interests of the policyholders make such exclusivity advisable.

Sixth.-1. The government, within one year of the publication of this Law, on a proposal from the Ministry of Economy and Finance and the advisory board of insurance, will dictate the regulation for its development.

2. The Government within one year of the publication of this Law, on a proposal from the Ministry of Economy and Finance, and in the field of its competences, will develop the regulations contained in this Law on Mutual Social Welfare.

Seventh.-1. The provisions of this Law are without prejudice to the commitments made by the Spanish State under treaties or international conventions.

2. The Government is authorized to proceed with the development of this Law, in accordance with the commitments derived from Treaties or International Conventions.

Eighth.-The Technical Corps of Inspection of Insurance and Savings becomes known as the Superior Body of State Finance Inspectors, in accordance with the provisions of the Law of Measures for the Reform of Public Administration.

TRANSIENT DEVICES

First.-1. Exceptionally, the Spanish or foreign entities that have been authorized to carry out private insurance or capitalization operations prior to the publication of this Law and whose social capital, mutual fund or fund provided for in the Article 12 (d), which are lower than those laid down in Chapter II, shall extend them within three years of the beginning of the financial year following the publication of this Law and at least one third of the annual quantity in which the It will encrypt the insufficiency. For these purposes, institutions which operate simultaneously in life insurance and life insurance other than life insurance shall be required to reach the sum of the capital required for that and all the capital.

3. The entities provided for in the number 1 of this transitional provision may complete the minimum amount of social capital or mutual fund by affecting the capital reserves by means of the liability of its balance sheet under the heading , which may only be available for incorporation into the capital or mutual fund or where they have reached the minimum required. For these purposes, the accounts for the regularization or updating of balances legally authorised by tax law may also be taken into account, but may not be capitalised until such time as they are brought in accordance with their specific provisions. Similar powers shall be held by foreign entities in order to complete the permanent fund required by Article 12 (d).

3. While the total of guarantees laid down in Chapter II has not been achieved, the entities concerned may maintain operations in the fields and territorial areas which they have authorised, without extending them to others, or accept reinsurance if they were mutual.

4. The entities covered by the number 1 of this transitional provision which do not comply with the requirements of this provision shall be wound up.

5. Mutuals at variable premiums which are believed to be segregated from other existing ones, as a result of the prohibition on operating in more than one class laid down in Article 14 (3), may constitute their prior guarantees within the time limit and in the form laid down in the Numbers 1 and 2 of this Transitional Disposition.

Second.-The mutual societies referred to in Chapter III of this Law must adapt their legal status and benefits to that set out in the same and in their Rules of Procedure within one year from the publication of the latter.

Third.-The limitation imposed in Article 26.2 of this Law shall not apply to entities subject to it which, upon their entry into force, have not completed three years of their activity.

Fourth.-1. A period of three years shall be granted, counted from the publication of this Law, within the limits to be determined, for the adaptation of the Mutualities or the Montepios of Social Welfare to the same, which shall be done record in public deed.

2. The institutions referred to in the preceding paragraph which, by 31 December 1983, are legally guaranteed to benefit persons in excess of the limits laid down in Article 16 (3) may continue to guarantee the benefits which were established on that date. In the case of risk forecasting on matters, they shall accommodate the benefits referred to in paragraph 4 of that Article 16 within three years of the publication of this Law.

Fifth.-1. Provided that they are carried out within three years, counted from the publication of this Law, the tax exemption shall be granted to the acts, documents and legal businesses that are executed to comply with the provisions of this Law, as indicates below:

(a) The Tax on Proprietary Transmissions and Documented Legal Acts, the extensions of social capital or mutual fund that the entities agree to fill in the requirement for greater prior guarantees, as set out in this Law.

(b) The same exemption shall be granted: the adaptation of the legal status of the mutual societies to the provisions of this Law, whether it requires simple statutory modification, transformation or division of the company; the creation of mutual premiums variable where it is a consequence of the prohibition of operating in more than one class, as laid down in Article 14.3; the change of social object and the operations necessary for the adaptation of the existing entities to the provisions of the Article 8., 2.

(c) The same exemption shall enjoy the adjustment or dissolution of the capitalisation entities provided for in the Third Final Disposition.

2. The merger or division of insurance or reinsurance undertakings carried out within the period referred to in No 1 shall be deemed to have improved their production and organisational structures without restriction on competition and on the benefit of the national economy, and will enjoy to its maximum extent the benefits granted by Law 76/1980 of 26 December, provided that they comply with the other conditions and conditions required by that rule, without the need for companies to the resulting form of a public limited company and without the State being subject to compliance with the established in Article 721 of the Law of Local Regime, recast text approved by Decree of 24 July 1955.

The requirements that are required in this Law for access or continuation in the exercise of the insurance activity shall not be considered to be met when the same is met by accounting revaluations taking place in the fusion process.

3. The Constitution of the transitional grouping of insurance entities provided for in Article 28.5 of this Law, as well as the legal acts and acts that are provided for in this Law, shall be exempt from the Tax on Proprietary Transmissions and Legal Acts Documented by the Constitution of the Transitional Group of Insurance Entities. are a consequence of the same. Until they are merged, they will be eligible, either for the consolidated declaration established in Royal Decree-Law 15/1977 of 25 February 1977 and for the corresponding tax system in respect of corporation tax, to the end of which it is authorizes the government to adapt the same to those groups, or to the tax transparency regime, as appropriate. Similarly, the tax exemption shall be granted to the holding of the whole of the classes of an entity with the consequent dissolution of the entity, provided that it is carried out within the time limit specified in the number 1.

Sixth.-The entities that the publication of this Law are authorized to carry out operations in the field of life and in other classes, may continue to consign such operations, but must keep separate accounts for The latter and the latter and have at least one social capital, mutual fund, permanent fund of the central house, solvency margin and guarantee fund equal to those required for the class of life plus those corresponding to the other branches in which they operate.

Seventh.-1. Deposits of transferable securities made up of insurance companies in compliance with their specific rules, in the bank of Spain or in the general deposit box shall be released after three months after the entry into force of the Regulation of this Law. Except for deposits made by delegations of foreign entities, which shall be subsist and adapt their amount to the provisions of Article 12 (e) of this Law.

2. The release of the deposits referred to in the previous paragraph shall not occur for those insurance institutions in respect of which the Directorate-General for Insurance has taken the appropriate measures as a result of non-compliance with the the legislation in force in respect of solvency margin, coverage of technical provisions or financial guarantees as long as they do not demonstrate to the same extent that such non-compliance has been remedied. To this end, the Directorate-General for Insurance shall provide the Bank of Spain and the General Deposit Box with the ratio of entities that incur such assumptions, as well as the lifting of the measures taken.

Eighth.-Those Social Security institutions that do not have the legal consideration of social security substitutes and whose collectives are included in the field of social security, but have not been integrated into the (a) the social security scheme which corresponds to, shall be subject to this Law and such groups shall retain their current framework as long as such integration does not take place.

ADDITIONAL PROVISIONS

First.-As of the date and in the terms that the Ministry of Economy and Finance points out, the Insurance Compensation Consortium will extend the scope of its protection for insurance outside the national territory mandatory liability for the use and movement of motor vehicles.

Second.-The commercial risks arising from foreign trade, in their different modalities, may be freely covered by the Spanish Export Credit Insurance Company, S. A. >, or by any other entity. insurance and insurance to operate on credit and security insurance. The management of the coverage of political and extraordinary risks on behalf of the State will continue to be carried out by the Company. Within one year the government will develop this provision, which amends the provisions of Law 10/1970 of 4 July.

Third.-1. Law 117/1969, of 30 December, regulating the production of private insurance, is amended in the following terms:

(a) The definition of private insurance production referred to in Article 1. of that Law is understood to apply to the activity of mediation in insurance and extends, with due adequacy, to the mediation in reinsurance.

(b) The production of insurance made by the insurance institutions referred to in Article 2. of that Law, it should be understood in the sense that the aforementioned entities can accept the cover of risks and engage in reinsurance without intervention by agents or brokers.

(c) Insurance and reinsurance mediation functions may be exercised by natural or legal persons in terms that are determined for each of them.

(d) Companies whose social object is exclusively the insurance agency, the insurance brokerage or the reinsurance brokerage, expressions to be included in the respective social ratio, and when the company may be established. These will be nominative. The managers or directors of such undertakings shall be in possession of the corresponding title of agent or broker, and only insurance or reinsurance agents or brokers, respectively, and natural persons who are not members of such an agent or broker may be members of them. The use of the

Insurance, Insurance, or Reinsurance Brokerage companies, which meet the requirements set out in this Law, may be members of other insurance agencies, Insurance Brokers or Reinsurance brokerage, respectively.

(e) The classification of the mediators referred to in Article 10 shall be as follows: insurance agent, insurance brokers and reinsurance brokers, which are incompatible with each other.

(f) The administrative powers provided for in Article 14 extend to the reinsurance brokers. The professional organisations of reinsurance brokers that can be established shall relate to the Administration through the Ministry of Economy and Finance.

g) Notwithstanding the prohibition contained in Article 16. 2, in the case of a temporary suspension of the operations of an institution, in one or more classes, the agents of the institution may bring new insurance contracts to another entity for the duration of the suspension and in respect of the classes to which it is refers.

(h) Non-representative agents, as long as they are not required by the title of the law, to certify their knowledge by means of a certificate of sufficiency.

(i) Brokers and insurance agents entitled, under their responsibility, may use the services of subagents, who collaborate with them in the promotion and mediation of insurance, without having the status of an agent or broker, but with identical incompatibilities.

2. Within one year of the publication of this Law, the

government by legislative decree, shall publish a recast text of the provisions relating to the promotion, mediation and advice in insurance and reinsurance contained therein and those that are not affected by Law 117/1969, December 30, regulating the production of private insurance, being able to regularise and clarify the legal texts to be recast and to harmonise them with each other and with the rest of the legislation in force, in accordance with the provisions of the Article 82.5 of the Constitution. The recast text shall include the appropriate transitional rules.

REPEAL OPTION

1. The provisions of the same or lower range of the present are repealed as set out in the same, and in particular the following:

(a) Article 17 of the Law of 17 May 1940, on the limit of production costs in life insurance.

(b) The Law of 6 December 1941 on Mutual Social Welfare.

(c) Decree-Law of 31 May 1946, only in respect of the final part of the last paragraph of Article 1 thereof. concerning the premium for compulsory passenger insurance.

d) The Law of December 22, 1949, on tax benefits to insurance and reinsurance entities operating abroad.

e) Law of 16 December 1954 on the management of private insurance.

(f) Law of 22 December 1955 on private savings and capitalisation entities, as soon as it refers to capitalisation institutions, and the provisions relating to special savings institutions shall be repealed. the time limit laid down in Article 2 elapses. of Royal Decree-Law 11/1981 of 20 August.

(g) Decree 1716/1974 of 25 April 1974 on the restructuring of the Voluntary Forecast schemes, which will henceforth be in accordance with this Law.

(e) Article 32 (2) (e) of the General Statute of the Advocate General, adopted by Decree of 24 July 1982.

2. They are declared in force:

(a) Insurance Regulation of 2 February 1912 and other provisions which develop or supplement the Law of 16 December 1954, as soon as they are not contrary to this Law, and until such time as the Rules of Procedure are given.

b) Decree-Law of 26 July 1929 on the compulsory insurance of travellers.

(c) Decree of 26 May 1943 on the approval of the Social Welfare Mutual Regulation, as soon as the provisions of this Law are not opposed and until the provisions of the Regulation provided for in the provision are promulgated (a) the seventh or the autonomous communities shall enact the relevant Regulations in the exercise of their powers.

d) Law of December 16, 1954, which creates the Insurance Compensation Consortium.

e) Law 122/1962 of 24 December (recast text approved by Decree 632/1968 of 21 March) on the use and movement of motor vehicles.

(f) Law 25/1964 of 29 April on Nuclear Energy.

g) Decree-Law 18/1964 of 3 October, which organizes the National Risk Guarantee Fund for Circulation.

(h) Law 57/1968 of 27 July, which regulates the perception of anticipated amounts in the construction and sale of dwellings.

(i) Law 117/1969 of 30 December 1971 and Regulation of 8 July 1971 on the production of private insurance as soon as they are not contrary to this Law.

j) Law 10/1970 of 4 July on export credit insurance.

k) Law 87/1978 of 28 December on Agricultural Insurance Combined and its Regulation.

(l) Royal Decree Law 10/1984 of 11 July establishing urgent measures for the consolidation of the private insurance sector and for the strengthening of the control body.

Therefore,

I command all Spaniards, individuals and authorities, to keep and keep this Law.

Palma de mallorca to 2 August 1984.-JUAN CARLOS R.-The President of the Government, Felipe González Márquez.