Spain sets up its first financial and insurance mediation body

Member States have sought to encourage alternative dispute resolution methods in an effort to relieve the workload congestion in the Courts and longer time of legal proceedings. In addition to the “traditional” tools of arbitration, mediation and conciliation, the financial sector in several Member States has set up its own dispute resolution system. Their powers, jurisdiction and resources vary from one Member State to another. After several countries such as Ireland, the United Kingdom, Belgium or France, Spain is creating a new mediation authority to resolve disputes in the banking, investment and insurance sectors.


Its creation was actually decided in 2018, but was momentarily halted for political reasons and because of the health crisis. After several months of latency, this project is about to be implemented “imminently” by the Ministry of Economy, according to some sources.

The Independent Administrative Authority for the Protection of Financial Customers (Autoridad Administrativa Independiente de Protección del Cliente Financiero),  will have as its main mission to resolve disputes between the financial sector – including insurance intermediaries – and customers, and will be able to issue binding decisions up to a certain amount. This threshold could be set at 50,000 euros, according to some sources, but this would not have been decided yet.

Currently, Spanish insurance companies and brokerage firms have two options for dealing with complaints against them: they can either set up their own “Customer Service Department”, or outsource this service to a “Defensor del Cliente” (“an independent entity or an independent expert, responsible for dealing with and resolving complaints and claims). Dissatisfied consumers must go to court if they do not agree with the solutions proposed to resolve their complaint.

Most of the time, insurance companies have a “customer service department” to deal with the large number of complaints filed against them. Brokers generally opt for a “Defensor del Cliente”, often through the use of law firms, and this service is most of the time free of charge. Thus, in the event of a claim, consumers may be offered one of these channels to resolve their complaint: either the customer service department or the Defensor del Cliente, depending on the service set up by the broker or the insurance company.

With the creation of the Ombudsman, these mediation channels will still exist, but consumers will now have a “second option” to resolve their complaint before suing their insurance broker. The two systems will therefore work together, since consumers will still have to first lodge a complaint with the broker, before referring the matter to the ombudsman if their complaint is rejected or has not been dealt with within one month.


  • In some other countries (Ireland and UK) as well, the decisions issued by Ombudsmen are legally binding on both parties, while in some other countries (Belgium, France), they have a more “moral authority”.
  • Unlike courts, European Ombudsmen can issue their decisions on a “fair and reasonable” test. Indeed, Ombudsmen are not strictly bound to apply the legal principles or case law developed by courts. This makes it possible to avoid strict application of the terms of the contract or the rule of law when it would lead to a solution that is contrary to common sense or manifestly unfair. Thus the solutions provided by Ombudsmen occasionally turn out to be different from a judicial decision.
  • In Common law countries, the powers of Ombudsmen have recently been increased so that they can now direct a financial services provider or distributor of insurance products to pay compensation up to €500,000 in Ireland, and £350,000 in the United Kingdom.

This new authority will have extensive powers, such as the power to declare abusive conditions null and void. According to the sources consulted, the new body will be able to rely on the complaints services of the three other financial supervisors: the Bank of Spain, the National Securities Market Commission (Comisión Nacional del Mercado de Valores, CNMV), and the Directorate General for Insurance and Pension Funds (Dirección General de Seguros y Fondos de Pensiones, DGSFP). The difference is that the decisions of the Independent Administrative Authority for the Protection of Financial Customers will be binding.

According to available sources, the new mediator will lack the capacity to impose sanctions on parties. Nevertheless, if it becomes aware of facts that could constitute infringements, it will communicate the information in its possession to the Bank of Spain, or the relevant supervisory authority.

In addition, according to some sources, filing a complaint with the future Ombudsman will generate a cost of €200 to be paid by the insurance company or the intermediary, which can only encourage them to try to offer acceptable solutions to their clients on their own.

Sources: Las decisiones del nuevo supervisor de clientes de seguros y finanzas serán vinculantes hasta 50.000 euros – Seguros News

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