The new Law 20/2015 regarding ordinance, supervision and solvency of insurers principally includes a modification of an already existing Royal Decree 8/2004 which can be summed up as follows:
In order to speed up compensation of material damages as a consequence of road traffic accidents, all entities operating in Spain must comply with the “Direct Settlement” agreements already implemented in the Spanish market.
This modification does not only affect Spanish national entities but also foreign EU entities operating in Spain under freedom of services (FOS) or freedom of establishment (FOE)
The will of the legislator is clear: whichever entities authorized to issue MTPL policies in Spain shall comply with the “Direct Settlement” agreements for the handling of MTPL accidents between two vehicles (material damages only)
This new legislation will enter in force on the 1st July 2016 as it is fixed in the above mentioned Law 20/2015.
We strongly recommend all entities operating under FOS/FOE in Spain to contact UNESPA (the Spanish Insurer’s association) for further information.