One of the great myths about insurance is the amount of fine print you can find on the policy. Or at least that’s what happened a while ago. Currently, the contents and limitations of the insurance policy have been simplified and the size has been equalized.

That doesn’t mean that the myth is gone, the font is bigger and usually in bold, but still, it may still surprise you. And almost always the surprise is negative.

I have been involved in insurance for more than three decades and still today I hear how the insurer clings to the fine print to avoid paying.

So I think the time has come to dedicate an article to the limitations of the insurance policy that cause so much abuse.

Let’s go with it!

How are the clauses of the insurance contract different?

As in any other contract, in the insurance contract, there are also stipulations and clauses that bind those who sign it. In the article on how to interpret an insurance policy, I tell you about the parts that make up the contract. In this one, we are going to see what is the difference between the delimiting clauses and the limiting or excluding clauses.

The general and particular conditions will be drawn up clearly and precisely. Clauses limiting the rights of the insured will be highlighted in a special way, and they must be specifically accepted in writing.

The Insurance Contract Law has been in force for about 40 years and although it has undergone several updates, the last one took effect on January 1, 2016, a few Supreme Court rulings have been needed to precisely define the difference between the risk delimiting clauses and limiting clauses in the insurance contract.

For the TS, the risk delimiting clauses are those whose purpose is to define the object of the insurance, specifying which risks, if they occur, will entitle the insured to receive the agreed benefit.

However, by limiting clauses, he understands that they refer to conditioning or modifying the rights of the insured and therefore the compensation, once the event that is the subject of the insured risk has occurred.

The insurer will compensate for the market value of the car if you collide with a lamppost and you are not drunk.

This is a typical example of self- damage coverage in car insurance. If you collide with a tree (insured risk) the company will pay you the market value (coverage limitation), as long as you do not drive the car drunk (limiting condition).

What delimiting clauses can I find in my insurance policy?

Simple, right?

Of course on paper, if it seems so.

But things get complicated when they put a booklet with more than 40 pages on the table. Packed with articles, bold text, and different font sizes or taking you from one article to another.

As I was saying, risk delimiting stipulations are those that define the object of the contract. That is, they define and specify:

1. What are the risks that constitute the object of the insurance.
2. What amount is insured and what are the limits of the benefit.
3. During what period it is constituted,
4. In what time frame.

Its purpose is to establish, without ambiguity, the objective bases of the nature of the risk in coherence with the object of the insurance. If we take this to your insurance, you will find these delimiting clauses:

The clauses that define the risk.

This group includes the conditions that describe the risk and the coverage provided by the insurance contract.

They are clauses whose wording must be clear and understandable, although they do not need to be highlighted in the policy. These are some:

1. Those that identify the parties that establish the contract, insurer, and policyholder, insured, or beneficiaries.
2. They determine the people, property, or activity that is the subject of the insurance. If what you are insuring is a house, a car, an activity, or if it is health insurance or life.
3. Where the risk is located and what are its characteristics and identifiers. The place where the home, business, or community is located, what are its characteristics, what prevention and protection measures it is equipped with, or the license plate and accessories installed if it is a vehicle.
4. Sums insured. It is the value that we assign to the insured assets in the event of a risk.
5. What risks are covered, which must be consistent with the nature of the insured property? If the object of the insurance is an asset (the house, the car, or the mobile ) the risks covered will be repaired or replaced. When it comes to people, the defined risks will be aimed at providing a service, medical care, compensating the insured or his beneficiary. For example, if you die or become disabled.
6. The period of coverage. These clauses determine when the insurance begins when it ends if it is possible to extend it and for how long.
7. The price of the insurance. It is one of the most important insurance conditions, so you must detail what makes up the price, and the conditions, if any, for its update.

Delimiting clauses of the contract.

There are other conditions in the insurance contract that delimit certain rights and obligations of the parties, which by their nature must be significantly highlighted in the policy.

Fundamentally, they are clauses that establish the limits provided by the insurance coverage or the procedures that the insured and insurer must follow in certain circumstances.

The clauses referring to the coverage limits are made up of those that determine the amount of compensation assumed by the insurer in each guarantee or all of them, as well as the deductibles or deficiencies that the insured assumes in each of the benefits. Insurance.

Other conditions do not become limitations of the insurance policy but that must be highlighted because they regulate the conditions and deadlines to oppose the extension of the insurance or its unenforceability. Also how to act in the event of a claim or how will be the communications with the insurer.

The limitations of the insurance policy. A (not so) small letter that may surprise you.

The limitations of the insurance policy are established by the so-called limiting or exclusive clauses. These are those that restrict, condition or modify the rights of the insured to compensation or the provision of the service by the insurer, once the event that is the subject of the insurance has occurred.

A few lines earlier, it referred to the fact that these are clauses that must be highlighted especially in the contract and that must be expressly accepted in writing by the policyholder. This is intended for the insured to have exact knowledge of the conditions that regulate the insurance contract.

The Supreme Court considers it sufficient that the limitations of the insurance policy are drafted in such a way as to allow the insured to understand their meaning and scope to differentiate them from those that are not of that nature.

By saying this, you validate your writing in bold or so that they stand out from the rest. Regarding the express acceptance in writing, it considers that the policyholder must sign both the general and the specific conditions, as these are the ones that usually contain the limiting clauses.

The jurisprudence has highlighted the differences established in article 3 of the LCS between the limiting and harmful clauses. While the former, even without being favorable to the insured, are considered valid referring to the nature of the insurance contract, the latter is always invalid.

Having identified the difference between the delimiting clauses and the limiting clauses, now it is time to see how the limitations are grouped in the insurance policy.

The limitations on all insurance coverage.

Many times it is difficult to distinguish between the delimiting clauses from the exclusive ones, despite being highlighted by a different typeface or highlighted in a different color, like those in the previous image.

However, we can distinguish between two groups of exclusions: those that affect all the coverage of the contract and the individual ones of each guarantee.

The limitations of the insurance policy that affect all the guarantees revolve around:

• Damages that occur before contracting the insurance or are different from those defined in the contract.
• Those events are related to the attitude and activity of the insured. Those caused by intent or gross negligence, inexcusable negligence, or neglect in the maintenance of the goods are excluded.
• Those declared by the public power as catastrophic or national calamity are also excluded. Those due to phenomena of nature or whose coverage is paid by the Insurance Compensation Consortium.
• The expropriation or requisition of property, by the imperative of any government or those that occurred in war conflicts.
• And normally, the payment of fines or penalties of any kind.

These exclusions, common to practically all contracts, are joined by others specific to each type of insurance.

The particular limits of each guarantee.

One of the characteristics that must govern an insurance contract is that the conditions that define it must be related to its nature. This requires that each of the coverage you provide has its own limitations or exclusions.

If you compare the previous image with this one, you will see that both are related to theft coverage. But while the former corresponds to home insurance, the latter refers to car insurance. Both are part of the respective general conditions and may be modified or suppressed through the particular or special conditions of the contract.

Both the general and specific exclusions of each guarantee must be known and expressly accepted by the insured. This consent requires that both the general and particular conditions must be signed in writing. If the contract is signed online, the acceptance can be made digitally.

Harmful clauses, without effect for the consumer

The general conditions, which in no case may be detrimental to the insured,…

In this way begins article 3 of the Insurance Contract Law, whose content gives as much play as to write this post.

The aforementioned text, in addition to referring to the delimiting and limiting conditions of the rights and their acceptance by the insured, is picked up from the start mentioning a third group of clauses, the harmful ones.

But while the former may be valid, although they require the express acceptance of the insured, the damaging clauses are not, as long as they may leave the content of the contract empty or frustrate the economic purpose for which the subscriber is signed.

As you can see, the concept of the injurious clause is more restrictive compared to the limiting one, making them invalid or null.

But it is also that the law requires its withdrawal from the insurance contract in the event that any of the general conditions of the contract is declared void by the Supreme Court.

Final thoughts

Anyway, I have come up a bit and the article has become a bit long, but the better you understand what the limitations of the insurance policy are, the better you can defend your rights before your insurer.

If you still have any doubts, this is the essential information about the three types of conditions that you can find in your insurance:

1. The clauses whose purpose is to determine or delimit the object of the contract, define the risk, its amount, or the term and scope of coverage.
2. The limiting conditions whose purpose is to condition or limit the rights of the insured and therefore their compensation provided that the insurance risk had occurred.
3. Harmful or surprising clauses, which reduce the content of the insurance contract in such a way that it is impossible to access coverage for the claim.

For me, a fundamental aspect when it comes to qualifying insurance is in the limiting clauses it contains because as an insured, the less my rights limit the better.

Do you still have doubts about any clause of your insurance policies? Leave it in the comments section.

The health questionnaire is for insurers an essential tool to know the risk and for the insured a source of conflict if their answers lack the required veracity and it occurs …

The health questionnaire in life or health insurance has become a fundamental tool for insurers.

While to contract car insurance, the insurer looks, among other things, in your history as a driver, in life, or health insurance they are interested in knowing your lifestyle or physical condition. Based on this information, they will delimit the risk and establish the conditions that will govern the contract.

The policyholder has the duty, before the conclusion of the contract, to declare to the insurer, in accordance with the questionnaire that he submits, all the circumstances known to him that may influence the risk assessment.

So all the insurers in the market require that the insured answer a questionnaire as a prerequisite for contracting the insurance.

And it is the insured who has the duty of the declaration, so it must be he and not another, who truthfully answers the questions to which the insurer submits.

What do insurers want to know from the health questionnaire?

A few years ago, the health questionnaire was not so decisive for the insurer to accept the insurance application. Today things have changed and the insurer gives the health questionnaire capital importance, without it, it will not be possible to take out the insurance. In many cases, acceptance is conditional on the approval of the insurer’s medical office.

It should be emphasized that the health questionnaire to which the insurer submits you must meet certain requirements. It must contain questions relating to the health of the insured, be reasonably detailed, and cannot be subject to interpretation. It may not contain questions related to private life, such as the candidate’s sexual orientation.

But the insured is only obliged to answer what is asked, nothing more. Therefore, if the insurer has not asked about it, later it will not be able to claim that the information has been withheld.

Normally the health questionnaire is made up of these three sections:

Life habits

These are issues related to daily exercise, tobacco use, alcoholic beverages, or drugs.

Medical history

It lists all the issues related to illnesses you have had, surgical operations, chronic pathologies or accidents, and sick leave. In addition to detailing the above, the insurer is also interested in knowing when it occurred or was diagnosed, so it will ask the date.

Actual state

This section is intended for you to report if you are in treatment for any ailment, the drugs you take, or, for example if you suffer from any type of allergy.

Depending on the content of your answers, the insurer may request medical information on a certain condition or carry out additional medical tests. In this case, don’t worry about the expenses, the medical check-up is on your own.

Why be honest when answering the health questionnaire?

The health questionnaire is the condition imposed by the insurer to access life or health insurance.

And many times we are not entirely sincere in our responses. If we cheated our mother with the number of drinks or cigarettes, why not do it with the insurance. We also assume the role of a physician for a while, assessing how relevant the question is, and if it has been many years since our tonsils or meniscus were removed, we don’t count it. And unless we are taking pills, cholesterol, glucose, or transaminases, they will always be fine.

But it is that article 10 of the LCS includes another paragraph that says verbatim:

The insurer may terminate the contract by means of a statement addressed to the policyholder within one month, from the knowledge of the reservation or inaccuracy of the policyholder. Unless there is intent or gross negligence on their part, the premiums relating to the current period at the time of making this declaration will correspond to the insurer .

Omitting relevant information, about which the insurer has asked in its health questionnaire, is the reason for terminating the policy. But, if you also prove that it has been omitted on purpose, you will lose the right to a refund of the premium.

If on the occasion of a claim, the insurer became aware of the inaccuracy in the declaration, it could:

• Reject the consequences of the accident,
• Reduce the compensation in proportion to the difference between the premium paid and the one that would have been received if the true entity of the risk was known.
• Include an exclusion in the policy, regarding that ailment.

The inaccuracy in the health declaration is the first argument that the insurer will use to reject the claim. Later, in case of litigation, you may find that you have supplemented it with that the policyholder acted in bad faith (fraud) or gross negligence. Later you will discover how to counteract this situation if you see yourself fully involved.

Do I have to fill out the questionnaire myself or can the bank or the insurance company do it?

It happens many times that in the confidence of the person who makes us the insurance, we fill out the health questionnaire, without the necessary attention. Whoever asks takes it for granted that he knows us well enough not to make a mistake by answering on our behalf and for whom he must answer, it is less compromising than giving explanations. So, without further ado, we stamp the signature on the questionnaire accepting its content.

This situation is frequent when the person filling in the form is the bank manager, the broker, or the insurer’s agent. In both cases, the desire to sell a policy or sign the loan turns such an important event into a mere procedure. And as we have seen, the repercussions of not being honest with the insurance can lead you or your beneficiaries not to charge a dollar.

When this happens and the insurer rejects the claim, the conflict arises. Some of these claims have reached the Supreme Court, which has spoken according to each case. These are some issues on which it has already spoken and in a positive way for the interests of the insured.

On certain occasions, it has been considered irrelevant that the form has not been filled in by the insured, taking into account the amount of personal data provided to the insurer and that he would not have known otherwise.

Absence of intent or gross negligence

One of the reasons argued by the insurer for denying insurance benefits is the existence of bad faith (intent) or gross negligence of the insured, for not answering truthfully or with the intention of deception, to the questions of the health questionnaire.

It has been ruled out by the TS that there is fraud when it is the bank employee or the insurer’s agent who fills out the health questionnaire and the client is limited to signing it. It has been considered that this fact is equivalent to the failure to submit the form by the insurer and therefore its consequences cannot fall on the insured.

The same reasons have been argued to reject the position of the insurer when the questionnaire is not filled out, nor signed by the insured.

conclusion

If for insurers the health questionnaire is a fundamental tool to assess risk, for the insured it is the key to access to life or health insurance.

But if the key is not correct, you may enter a maze, in which the insurance company has an advantage. To try to be on an equal footing, you must be sincere in your answers when you go to answer the questionnaire that the insurance company puts in front of you. If the company does not want to insure you, it is better that they tell you before and not after paying the insurance for a few years.

Lying on the health questionnaire is one of the most common reasons why insurers reject the insured’s claims. The normal thing, when it happens, is that they deny the medical benefit or reject the payment of the insured capital.

And if they consider that there has been intent or gross negligence in the declaration, they could cancel the contract.

Have you been entirely sincere in responding to the health statement? Has it brought you consequences?

Leave us the answer in the comments, we will be happy to read you!

One of the most determining factors before purchasing a product or service is having all the information and the best advice. You may think that the issue does not suit you, but when it comes to rights protection …

Law of Insurance Distribution. Or what is the same, the rule that replaces the repealed Insurance Mediation Law?

You may think that it is an issue that does not affect you at all, neither in your business nor in your personal life. Well, you are wrong!

Look, one of the most determining factors before purchasing a product or hiring a service is having all the information and the best advice. And in insurance, the product is as important as who sells it. So this article is about that, about the actors involved in the distribution of insurance.

The publication and entry into force of the new Insurance Distribution Law mean adapting legislation to the European Insurance and Reinsurance Distribution Directive. A regulatory framework is established that modifies the traditional insurance market and therefore also obligations with consumers.

The objectives of the new Insurance Distribution Law

On February 5, RDL 3/2020 was published. It has taken more than three years since its parliamentary process began for the rule to finally see the light.

This new rule will change the traditional way of selling insurance. Until now, the mediator was in charge of selling the products made available to him by the insurer to his clients. From now on, the distribution becomes comprehensive and can be carried out by all those involved in the insurance market.

At the same time, the mechanisms that allow the single insurance market within the European sphere are regulated, which will undoubtedly influence greater competitiveness among mediators. The direct consequence of this situation should translate into a greater benefit for the insured.

This benefit is necessarily linked to greater protection. And this is only achieved by adapting the products to particular needs, making them more understandable. Also increasing transparency, both in relation to the products and in the activities carried out by the insurance distributor.

The new features incorporated into the new Insurance Distribution Law

The impact of having to adapt the legislation on insurance mediation to the European guidelines has resulted in the promulgation of this new standard. And it comes loaded with news, these are some of the most relevant.

1. New operators

From now on, traditional mediators are no longer alone. Insurance distributors are considered to be the insurance companies themselves, and their employees when they participate in the active sale of their products. Insurance comparators are also included and the figure of the complementary insurance mediator is created.

Insurance comparators

Although they were already in the market, it is now when the activity is incorporated as one more insurance distributor. They must be an Agency or Brokerage, and they must provide the client with all the information corresponding to the type of mediator in question.

In the insurance distribution, they will have to provide all the information related to the insurance contracts according to the choice made by the customer online or through the web. In addition, when the client can contract directly or indirectly through the web, they must provide a classification of the products with prices, discounts, and a comparison between them.

Mediators who use online means or use websites for the distribution of insurance must develop written policies that guarantee their transparency. These policies must always be available for their supervision. The websites must inform about the ownership and condition of the same so that the user can exercise the rights that assist them.

The complementary insurance mediator

This new figure is reserved for the natural or legal person who carries out the distribution of insurance as a complementary nature to the main activity and only distributes certain insurance products complementary to the product or service specific to its activity. Investment companies or credit institutions may not be a complementary insurance mediator. It is about regulating the insurance distribution activity where the main activity is another. An example of this can be travel agencies or car rental companies.

It will be an essential requirement to be registered in the administrative registry of insurance distributors of the DGSFP. In addition, in the case of legal entities, administrators, the person responsible for the distribution activity and the people who are part of the management bodies responsible for distribution must also be registered.

The lack of activity of the complementary insurance mediator may lead to the loss of the authorization. Lack of activity is understood when it has not started or for two consecutive years, the distributed premiums do not exceed 30,000 dollars.

On the other hand, the figure of the external Collaborator of the mediator undergoes some changes. From now on, the “advisor collaborator” whose only function was limited to presenting clients disappears.

2. More information, greater transparency

The new Insurance Distribution Law establishes what information and how it must be provided to the client before signing the insurance contract. It also places special emphasis on information related to insurance-based Investment Products and the rest.

In general, the information must be clear, precise, and understandable for the client. It must be provided on paper and in the official language of the State where the risk is located, the State where the commitment is established, or in any other language by mutual agreement between the parties.

In addition to being on paper, it will be possible to report on durable media or through a website.

The durable medium must allow the information addressed to the client to be stored. At the same time, it must allow the reproduction without changes and that it can be accessed later for the necessary time. The condition for offering this medium is that the customer has chosen the durable medium instead of choosing to receive it on paper.

Informing the client through the website requires that the client has accepted that the information is made by this means. It must be a suitable place for the insurance operation and the client has had to be informed of everything related to the web address. You must have the guarantee that the information will be available for consultation for the time reasonably necessary.

The Information Document prior to contracting the insurance.

The law establishes that before contracting the insurance, the distributor must present to the clients a document that contains all the relevant information about the product.

The Prior Information Document must have a standardized format and will be used in all NO-VIDA products, excluding major risks.

The IPID will be prepared by whoever designs the product, normally it will correspond to the insurance entities. In the event that the product has been designed by the broker, he will be the one to do it.

The most important requirements that the IPID must meet are specified in that it will have a clear structure that allows easy reading. It will be accurate and not misleading and will include a statement that the pre-contractual and contractual information for the product are provided in other documents. It will contain all the information related to the type of insurance, coverage, and insured amounts, the risks excluded, the geographical scope of application, the duration, and the means of payment. It should also refer to how the contract can be canceled or terminated and the means of dispute resolution.

One last point is that it must be delivered effectively to the client by all insurance distributors and intermediaries.

On the obligation to report the remuneration of the distributor

In addition to the above information, the obligation to inform the client before the conclusion of the contract of the remuneration that the distributor will receive is established. Depending on the nature of the remuneration, this can be:

1. By fees: the remuneration paid directly by the client.
2. By commission: remuneration is included in the insurance premium.
3. Any other remuneration: This is any economic advantage offered and granted in connection with the insurance contract.
4. Combined: A combination of the previous types.

If the agreement contemplates the payment of fees to the insurance mediator, the latter must inform the amount or when it is not possible, the method for its calculation. This obligation, which affects all distributors, must be stated clearly and precisely. The same is applicable for payments made by the policyholder, other than periodic premiums.

3. Marketing of products

The Insurance Distribution Law introduces different sales models (informed, advised, in execution), the combined sale, or related products.

It is worth highlighting the differences established by the standard on sales models, distinguishing between:

• Informed: It is one that is carried out in accordance with the demands and needs of the client, based on information obtained from the same, and that seeks to provide objective and understandable information about the insurance product so that the client can make an informed decision.
• Advised: it is based on the existence of a personalized recommendation made to the client, at his request or at the initiative of the insurance distributor, regarding one or more insurance contracts.
• In execution: The customer has chosen the product on their own and simply has to execute the purchase order on their behalf.

Distribution of Insurance-based Investment Products (IBIP’s)

IBIPs are insurance products where the maturity or redemption value is totally or partially subject to market prices.

With the primary purpose of protecting the client, insurers and insurance intermediaries will have to offer the client of Insurance-based Investment Products (IBIP’s), clear guidelines, and recommendations on the risks inherent in said products. This information should include all associated costs and expenses, including advice. In addition, when they carry out advisory work, they must collect accurate information about the client’s financial knowledge and experience, their financial situation and the objective pursued.

Prevention of conflicts of interest.

The new Insurance Distribution Law gives special relevance to conflicts of interest. These usually appear when one or more people have conflicting interests, and professional independence and objectivity may be compromised. To prevent them, the norm provides that the insurance distributor may not establish any remuneration, sales target, or another system that may constitute an incentive for this or its employees to recommend a certain insurance product if it can offer a different one that is better fit the customer’s needs.

In addition, mediators and insurance entities must detect, prevent, and report any possible conflict of interest.

The practice in Combination Sale and Linked Sale

The new insurance distribution rule goes on to regulate the practices in the combined and linked sale. It is established that the insurance distributor will have the duty to inform the customer when the insurance contract is offered together with an auxiliary service or product if the different components can be purchased separately.

In the combined sale, the insurance can be purchased separately and maybe the main product or an accessory or auxiliary product of a good or service that is not insurance.

When it comes to linked sales, insurance is auxiliary to a good or service that is not insurance but is an inseparable part of the product in question.

Before contacting the insurance, the distributor will expressly inform the client about whether a combined or linked sale is being made. The costs and expenses of each component of the product or service must be reported separately. In addition, on the effects that the non-contracting or individual cancellation of the insurance or any of the linked products would have on the rest. It is also necessary to inform you about the differences between the joint offer and separately.

4. Product governance

Product governance is a new concept introduced in the new insurance distribution standard. It refers to the requirements in the design, approval, and control of insurance products.

Prior to the marketing of insurance, insurance distributors who design products for sale must prepare, maintain, and review the approval process for each product. New requirements are established in the design, approval, and control to ensure that the customer’s needs are taken into account in all phases of the product.

This product governance affects both insurers and insurance brokers who design insurance products to sell to their clients.

5. Separate accounts

Another novelty that the new Insurance Distribution Law brings is the obligation that insurance intermediaries have to separate the funds received from clients from the economic resources of the company. That is to say nothing about everything coming in and out of the same bag.

From now on, they have to allocate a specific account in which they will only be able to deposit the premiums received from the client or the amounts delivered by the insurance companies as compensation or reimbursement of the premiums destined for the clients.

6. Infractions and sanctions

With the new Insurance Distribution Law, infringements are reinforced and penalties are considerably increased.

In the case of serious infractions, the sanctions can range from the cancellation of the registration in the administrative register or the temporary suspension for a maximum period of 10 years, to fines whose amount varies according to:

If it is a legal person, the fine can reach up to 3% of the annual business volume according to the latest accounts approved or one million euros. It may also be twice the amount of the profits made or the losses avoided with the infringement if that can be determined.

In the case of a natural person, the fine may be greater than 100,000 dollars or twice the amount of the profits obtained or the losses avoided with the infringement, if it can be determined.

These sanctions are substantially increased if the offense committed is due to the distribution of IBIP’s.

To the economic sanction or to the cancellation or suspension of the authorization to operate, the publicity to the constitutive conduct of the infraction may be imposed.

However, this is not all, because the disciplinary regime does not stop only at the insurance dealer. It is also attributable to those who hold administrative positions, the person responsible for the distribution activity, or those who are part of the management body responsible for the distribution activity. And if the offense is personal, the sanction is also personal, and can even go as far as being disqualified from holding positions of administration and management.

7. Training in the Insurance Distribution Law

Training is another of the sections in which the new insurance distribution law has incorporated new requirements. On the one hand, the concept of the relevant person is established for the purposes of training. It is understood that a relevant person is one who, being an employee or not, participates directly in the distribution of insurance, informing or advising clients.

Therefore, relevant persons are the person responsible or those who are part of the management team responsible for the distribution in the insurance companies. The same consideration in the case of insurance intermediaries, reinsurance brokers, legal entities, and external collaborators of the intermediaries.

Continuous training, a necessary requirement

Another innovation in training refers to the abolition of the old groups’ A, B, and C. In the development of this new law, the following levels of training are considered.

Level 1: Includes the person responsible for the distribution in the case of an individual or, where appropriate, half of the people who form the management body responsible for the distribution of insurance companies, insurance and reinsurance brokerages, and safe banking operators. They will need to complete initial training of at least 300 teaching hours and continuous training with a minimum of 25 hours per year.

Level 2: Includes insurance agents, employees of insurance companies, and insurance intermediaries who provide advice to clients on insurance or reinsurance products. Likewise, it includes the people who make up the distribution networks in the safe banking operators and the external collaborators of the mediators. They will have to carry out initial training of 200 teaching hours and continuous training with a minimum of 25 hours per year.

Level 3: This level includes all the people of level 2, but with the difference that they only carry out information tasks on insurance products, but without advice. Initial training is limited to a minimum of 150 hours, with continuous training that may not be less than 15 hours per year.

Final reflection

It has taken more than two years to see the light of the new Insurance Distribution Law. And he has, as they say in basketball, on the horn.

If you work in the world of insurance distribution, all your activity, obligations, or how to do things are regulated in this rule. We have seen some of the highlights of what they are new in the distribution of insurance. And also some of the main objectives:

• Establish mechanisms that favor the single insurance market within the European framework, in terms of competitiveness.
• Benefit the interests of insurance consumers, reinforcing transparency, and guaranteeing homogeneous client protection.

So far my participation. Now it’s up to you to leave us your answer to the questions in the comments.

Do you dedicate yourself to the distribution of insurance? Have you had to adapt your business?