18 Jul
Member News

Pérez-Llorca | Insurance Market Update

BBVA’s takeover bid for Sabadell would ultimately impact existing bancassurance partnerships with Allianz and Zurich respectively

In early May, the Spanish bank BBVA made an initial all-share offer for Sabadell to merge, which was rejected by Sabadell’s board, prompting BBVA to turn hostile and take the offer directly to Sabadell’s shareholders. BBVA’s bid is subject to a minimum acceptance threshold of 50.01% of Sabadell’s shareholders in addition to the relevant regulatory approvals required for both the takeover bid and the subsequent merger process (i.e., stock exchange, antitrust and competition, and banking supervisory authorities, among others). As a first step, the Spanish Securities Market Commission (CNMV) admitted BBVA’s application procedure to authorise its takeover bid for Sabadell. The bid process will be long and may continue into 2025.

If BBVA’s bid succeeds, the Spanish insurance sector would experience a new bancassurance reorganisation affecting several insurance companies, such as Zurich, Allianz, Sanitas, Meridiano, and BBVA’s affiliate, BBVA Seguros, as a result of the potential impact that the subsequent merger process between the two banks may have on the relevant strategic partnerships to distribute insurance on an exclusive basis through their respective networks (retail).

BBVA and Allianz currently have a strategic alliance to boost their non-life insurance business in Spain through a joint venture (BBVA Allianz), whereas Sabadell and Zurich have an alliance for the distribution of both life and non-life insurance products in Spain through two separate joint ventures (BanSabadell Vida and BanSabadell Seguros Generales). Moreover, BBVA Seguros specialises in offering life insurance products, Sanitas has distribution agreements with BBVA and Sabadell for the health business, and Meridiano and Sabadell have a distribution agreement for the burial business.

 

PIB Group announces the acquisition of three additional insurance brokers in Spain

PIB Group, the insurance broker owned by the British private equity funds Apax and Carlyle, continues its expansion strategy in the national market with the acquisition of three insurance brokers, Fabroker, Saré and Moné. With these three acquisitions, they reinforce their presence in Bilbao, Zaragoza and Tarragona, where they already had operational offices. PIB Group Spain has so far acquired 17 brokerages and increased its team to more than 300 people, with €250 million in premiums under management.

Pérez-Llorca advised PIB Group on their expansion in Spain and its recent transactions.

 

Transfer of Sa Nostra Vida’s portfolio to MedVida Partners

MedVida Partners has completed all the necessary administrative procedures to conclude the acquisition of the former Sa Nostra Vida life insurance portfolio (recently merged with VidaCaixa). According to MedVida’s official statement, the solution implemented results in an economically sound mechanism for both parties to transfer the portfolio and crucially ensures the continuity and protection of the expected future benefits for its policyholders.

Pérez-Llorca advised VidaCaixa (Sa Nostra Vida) on this transaction.

 

Miller acquires the Spanish insurance brokerage Bruzon

British broker Miller, which specialises in reinsurance and direct insurance, has acquired Madrid-based Bruzon Correduría de Seguros y Reaseguros and Bruzon Services. The deal is awaiting approval from the Spanish authorities, but, following this, it will begin operating under the Bruzon Miller brand to reflect the collaboration.

 

The French insurance undertaking SFAM closes its Spanish subsidiary

France-based insurance undertaking SFAM SAS, which specialises in providing insurance coverage for technological devices, has ordered the closure of its Spanish subsidiary, SFAM Ibérica Servicios, SL. SFAM commercialised its insurance policies using the trade name Celside Insurance and through large companies such as Fnac and Mediamarkt for their electronic devices.

The reason for its closure is based on the court-ordered liquidation of the parent company in France because of unpaid debts to the French social security authorities. According to the complaints report of the Directorate General for Insurance and Pension Funds (“DGSFP”), more than half of the complaints filed were accepted by the DGSFP. In addition, the Spanish Data Protection Agency (AEPD) had also imposed penalties on the Spanish subsidiary.

 

INSURANCE REGULATORY AND CASE LAW UPDATE

The Spanish Government appoints a new General Director for the Spanish insurance supervisory authority

Following the voluntary dismissal of Mr. Sergio Álvarez, on 28 May 2024 the Council of Ministers appointed Mr. José Antonio Fernández de Pinto as the new General Director of the DGSFP. Until now, Mr. Fernández de Pinto held the position of Deputy Director General of Inspection of the DGSFP.

 

New Division of Technological Supervision and Digital Innovation at the Spanish insurance supervisory authority

On 24 April 2024, Royal Decree 410/2024 was published. Its Article 8 establishes the structure and functions of the DGSFP and introduces a new function related to the operational supervision of digital processes and technological innovation in the insurance and pension funds sector, as well as the analysis and monitoring of specific technological risks of insurance and reinsurance undertakings. To this end, a new Division of Technological Supervision and Digital Innovation has been created within the structure of the DGSFP, which will assume this new function, as well as the functions related to the coordination of relations with European Union institutions and supervisors from other States and international organisations, and the analysis of the documentation that entities must submit to facilitate the control of their activities in terms of technology and digital innovation.

 

The Insurance Legal Update Q2 2024 is now available

The Insurance Legal Update is a quarterly publication prepared by Pérez-Llorca’s Insurance and Reinsurance team that compiles the most significant legal developments in the insurance sector from corporate, regulatory and litigation perspectives, as well as concerning any other area of law that may be of interest to insurance specialists.

The Insurance Legal Update Q2 2024 can be downloaded here.

 

PRACTICAL Q&A ON SPANISH INSURANCE REGULATIONS

Q. What would happen if the premium revision is not foreseen in the insurance contract but the insurance undertaking intends to modify it?

 

A. If the insurance contract does not include any clause for premium revisions, then Article 22 of Insurance Contract Act should apply in order to establish the adjustment sought, as it entails a contractual modification of the premium initially agreed on. Therefore, the insurance undertaking would be obliged to communicate the amendment of the premium to the policyholder at least two months in advance of the expiration date (pursuant to Article 22.3 of Insurance Contract Act).

 

The policyholder must expressly consent to the modification of the premium. Indeed, if the policyholder does not say anything, the modification should not be applicable because there is no way of knowing that they tacitly accepted it. In the event that the insurance undertaking applies the amendment without the express consent of the policyholder, such modification could be considered null and the policyholder would be entitled to claim the difference between the premium paid and the original premium.

 

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Compliments of Pérez-Llorca – a Premium Member of the EACCNY.