The Government has approved on Tuesday a royal decree law that equals, with more than a year and a half delay, the protection of insurance users in Spain with that of the rest of Europe, incorporates product suitability test, and even regulates the activity developed through the “insurance comparators”.
The Council of Ministers has served to fully transpose the directive on the distribution of insurance, whose term expired on July 1, 2018, and partially the directive on employment pension funds, those promoted by companies for their workers and which will now go informing of the estimated pension they will receive.
Additionally, the royal decree incorporates some new features of the directive to encourage long-term involvement of shareholders in the field of insurance and pension funds, to contribute to the dissemination of their investment policies, especially when they are institutional investors in listed companies .
DISTRIBUTION OF INSURANCE
The new regulations, which must be validated in Congress, affect all insurers and their employees, more than 72,000 insurance agents and about 5,000 insurance brokers, whether subject to national or regional supervision, sources have explained. of the Ministry of Economic Affairs.
The standard establishes four classes of insurance distributors: traditional mediators, insurers, complementary mediators (such as travel agencies or car rental companies) and insurance comparators.
From now on the insurers themselves will be subject to the same requirements of the traditional insurance mediators, who must have professional knowledge in line with the level of complexity and nature of their activities.
Obligations of information to the client are also established, both of the products in general and of the previous advice, to avoid conflicts of interest, and the transparency on the cost of the service is reinforced by forcing the customer to receive, before the contract, the remuneration received by the distributor.
It also incorporates specific rules for insurance-based investment products, products that being safe have an important investment component because their value depends, totally or partially, on fluctuations in financial markets.
Among them are “unit-linked” insurance, insurance linked to investment funds, where what is obtained at the end of the contract is the result of the investment of the premiums in an investment fund portfolio.
The norm obliges the insured to warn of the risks of these products after previously analyzing their suitability in order to guarantee the adequacy of the product at the level of risk tolerance and the ability to withstand customer losses.
The concepts of linked and combined income are introduced in the insurance regulations, which refer to when insurance products are offered jointly with other services or different products, in which case the insurance distributor must inform whether the different components can be acquired or not. separately.
The text also includes requirements regarding product governance; greater security in the destination of customer funds; strengthening of supervision; and a new regime of infractions and penalties, with higher fines and regulating the processes of anonymous complaints by “snitches”.