Question:
Dear Sir, my father signed an insurance policy in Ireland, subject to the Spanish Law. After his death, the insurance company is delaying the compensation payment using all kinds of excuses. Could we ask the insurer to pay interests for this delay, and if so, how much?
Answer.
Dear reader thank you for your consultation.
When we are facing a dispute with an Insurance Company (be it Spanish or not), under Spanish law; the first thing to do it is to check carefully the general and special conditions of the policy, to check if there is any special mention about the deadline to pay compensation, interest, etc.
Normally the interest to be claimed in a legal dispute or court case, is based on article 1108 of the Spanish Civil Code. Which states that the interest to be claimed for delay would be either the one agreed, or if there is no such agreement, the legal interest. Normally, interests would accrue from the presentation of the claim in court.
Interests to be paid by insurance companies.
But, it is important you know that in Spain the Insurance contract Law 50/1980 ( Ley 50/1980, de Contrato de Seguro.) in its article 20, foresaw specific interests for insurance disputes.
Regarding life insurance policies, if the insurer delays in the fulfillment of the payment, by not complying with its obligation within three months of the loss taking place, then interest should also be paid.
Unless the contract or insurance policy specifically contains a more beneficial compensation for the insured. Then the level of interests to be paid would be as follows:
Compensation for delay shall consist in the payment of an interest equal to the legal interest rate in force at the time, plus 50%. Also this article says that in any case, two years after the loss, the annual delay interest shall not be less than 20%.
The interest would start from the date of loss, unless the policyholder, insured or the beneficiary has not fulfilled their duty to report the loss within the time fixed in the policy or, alternatively, in the seven days from when they had known of it. In this case, the interests will start from the day of submission of the claim.
The law also says that the insurer will not pay any compensation for delay when the lack of compensation payment is due to a just cause or not the insurer’s fault.
If you have any problem with an insurance companythat does not want to pay to you the compensation foreseen in a life insurance policy, our office can help you, contact us.
The information provided in this article is not intended to be legal advice, but merely conveys general information related to legal issues.
Carlos Baos (Lawyer)
Spanish Law firm.
White & Baos 2014 – All rights reserved
