Today, trade relations between France and Spain are very close and fluid. These trade relations represent a very important turnover for both countries.
According to the ICEX –Spanish Institute of Foreign Trade– and the General Direction of Customs of Spain, in 2014, 15.7% of Spanish exports were headed to France, and 11% of Spanish imports came from its northern neighbour.
With 6% of imports, Spain is the sixth largest supplier in France, just behind the United States.
From another point of view, almost 2,000 French companies have branches in Spain, employing 300,000 people. In France, 1,400 Spanish companies are employing almost 70,000 workers.
These intense trade relations are due, on the one hand, both to geographical and cultural proximity as well as to the fact that both countries belong to the European Union, and on the other hand to the homogeneity and quality of their products and services: these relations not only generate high monetary traffic, large and constant amounts of goods on maritime and road transport, large number of “expatriate” workers in one or the other country, but also large number and large variety of contractual relationships supporting all these trade exchanges.
The standards of international law in the insurance contract
Within this framework of trade and economic relations, it is easy to assume that sometimes accidents happen and that they can be covered by insurance companies of one country or another – damage, no-payments, professional liability, etc.-
The implementation of freedom to provide insurance services other than life insurance by Council Directive 88/357 / EEC of 22 June 1988 reflects the need to coordinate the standards of the dispute relating to the insurance contract.
In the case of risks covered by insurance policies, it is important to know the applicable insurance regulations.
In Spain, to do so, must be taken into account the expiration date of the insurance contract. Contracts formalized as of 17 December 2009 will be governed by the decisions of REGULATION (EC) No 593/2008 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 17 June 2008 on the law applicable to contractual obligations (Rome I), of which Article 7 governs the applicable conflict standards. Contracts concluded before that date will be governed by the conflict standards organized in Article 107.5 of the Spanish Insurance Contract Law. The general rule for insurance contracts concluded once the Rome I Regulation came into effect, excluding “big risks” insurance contracts, is that only the parties can choose the law applicable to their contract. This will be:
- The law of any Member State where the risk is located when concluding the contract.
- The law of the country in which the policyholder has his habitual residence.
- Regarding life insurance contract, the law of the Member State of which the policyholder is a national.
- In the case of an insurance contract covering risks limited to claims occurring in a Member State other than the one in which the risk is situated, the law of the Member State of occurrence
- When the holder of an insurance contract covered by this paragraph carries on a commercial, industrial or liberal activity and the insurance contract covers two or more risks relating to that activity and is situated in different Member States, the law of one of the relevant Member States or the law of the country in which the policyholder habitually resides
Furthermore, it should be noted that these rules do not apply to so-called “large risk” insurance contracts, which are provided for in Article 13.27 of DIRECTIVE 2009/138/EC OF THE EUROPEAN PARLIAMENT AND COUNCIL of 25 November 2009 on access to insurance and reinsurance activities, and their exercise (Solvency II). For these risks, the general rule is the application of the law chosen by the parties and, failing this, the insurance contract is governed by the law of the country where the insurer has his habitual residence. If it appears from all the circumstances that the contract has obviously closer links with another country, the law of that other country shall apply.
It must also be taken into consideration that a Member State may ask the insurance contract being governed by the law of the Member State which imposes the obligation to take out insurance.
Because of all these considerations, it is imperative that French companies and insurance companies with interests in Spain should count on a Spanish legal representative who can protect their interests in the event of an accident or a commercial dispute in which spanish insurance standards and jurisprudence can be applied.
At AGM Abogados, we have 30 years of experience in the defense of major insurance companies and their policyholders in the event of accidents resulting from their commercial activity, damages, fires, professional civil liability, transport accidents, criminal liability of companies and their managers (compliance), etc.