Opinion of the General Directorate of Insurance and Pension Funds (DGSFP) 14/20192.

In Spain, there was no notable legal decision concerning insurance intermediaries’ Professional Indemnity in 2020. However, the complaints Department of the General Directorate of Insurance and Pension Funds (DGSFP) issued an opinion on a complaint directed against a broker who failed in his duty to provide information and advice.


A property owners association approached an insurance broker, who helped it take out a policy to cover its operations. As the renewal date approached, the broker sent an email to the association advising that the insurer did not intend to renew the policy. Accordingly, the association took the initiative to approach another insurance company without the broker’s assistance and took out a new policy covering the same interests. Shortly afterwards, it received a letter from the first insurance company advising that the contract had been renewed. The association then held the broker liable for having placed it in a situation of being over-insured and requested reimbursement of the premium paid unnecessarily to the second insurer. The broker claimed that the association’s administrator had decided to take out a new insurance policy of his own volition without informing the broker and without having first checked that the previous policy had been cancelled. He also made the point that once informed of the situation, he took care to assist his client in dealing with the insurer.


The DGSFP’s opinion was that the broker had failed in its duty towards its client by having provided wrong information and for not having sufficiently assisted the client in the steps to be taken following the email advising the first insurer’s intention not to proceed with the renewal of the contract.

CGPA comments

This ruling can only serve to remind insurance intermediaries of the importance of the obligations they have and, in particular, of the duty to monitor an insurance policy throughout its lifetime, implying, among other things, the need for pro-active and documented management of their renewal procedures.