Spain Proposes CCS as 'Bridge Entity' to Manage Insolvent Insurers
Spain's Ministry of Economy proposes the CCS as a 'bridge entity' to manage insolvent insurers, ensuring policy continuity and claims payment under a new draft law aligned with EU directives.
- • Ministry of Economy proposes CCS as a 'bridge entity' in insurer resolutions.
- • CCS would ensure continuity of contracts and payment of claims during insolvency.
- • The draft law requires financial separation of CCS activities related to insolvent insurers.
- • Public consultation on the draft law is open until February 19 before parliamentary processing.
Key details
The Spanish Ministry of Economy, Trade, and Industry has proposed a new regulatory role for the Consorcio de Compensación de Seguros (CCS) to act as a 'bridge entity' when insurance companies become insolvent. This initiative, outlined in a recently published draft law, aims to align Spain's regulatory framework with European Union directives.
In cases of insurer bankruptcy, the CCS would temporarily take over parts or the entirety of the troubled company's assets and liabilities. Crucially, this would ensure the continuity of insurance contracts and the payment of claims, protecting policyholders from disruption. The CCS would operate with strict financial and accounting separation from its other activities to guarantee transparency and avoid commingling of funds.
The draft law outlines multiple resolution options for insolvent insurers, including liquidation, direct sale, and asset segregation. While serving as a bridge entity, the CCS is prohibited from issuing new insurance policies or modifying existing ones in ways that increase liabilities.
Currently, the government has opened a public consultation period for this draft law, which will run until February 19. Afterward, the Ministry of Economy will review feedback and potentially introduce amendments before forwarding the proposal to the Congress of Deputies for parliamentary processing.
Minister Carlos Cuerpo emphasized that this proposal is designed to provide an orderly resolution mechanism for insurer insolvencies, maintaining market stability and protecting consumer interests in Spain's insurance sector.
This article was translated and synthesized from Spanish sources, providing English-speaking readers with local perspectives.
