The Reinsurance Agreement, authorised by the European Commission on the 4th of December, 2020 within the framework of the State aid for economic support to reduce the effects of COVID-19, which were included in the Royal Decree-law 15/2020, of the 21st of April, is aimed at becoming an incentive for business activity in Spain as it encourages the development of economic transactions, serving as a guarantee for the collection for sales or services provided, giving the necessary safety to the trade operations.

It has been configured as a proportional, non-optional reinsurance programme, with a loss limit of 500 million euros for the Ministry of Economy, Trade and Enterprises, through the Consorcio de Compensación de Seguros.

As it is dealing with a branch that requires some specialisation, it is extended to all the insurance companies operating in Spain with a premium volume of no less than 10 million euros in 2019, with regard to short term trade risks undersigned in Spain by policyholders residing in the country.

The cover period, for undersigned years, will go from October, 2020 to June 2021, with a maximum transfer percentage of 60%. The conditions of the Agreement will be, in general, those laid out in the private reinsurance programmes of the companies who undersign the Agreement with the Consorcio, except for the reinsurance commission, which will be the minimum between 35% and the real cost of the development expenses for each assignor in 2019.

The assignors must take on the commitment to not substantially reduce the risk limits that are susceptible to being covered for the different policyholders and sectors of economic activity existing on the date of the signing of the Reinsurance agreement.