PORTUGAL Law and Practice Contributed by: Leonor Futscher de Deus, Broseta Abogados, SLP
2.2 Writing of Insurance and Reinsurance Under the Insurance Activity Law, insurance and rein- surance business in Portugal can only be carried out by the following entities: • Portuguese-based insurers and reinsurers author- ised by the ASF; • Portuguese-based mutual insurance and reinsur- ance undertakings authorised by the ASF; • branches of insurers and reinsurers established in other EU member states acting in Portugal under freedom of establishment (FoE), provided certain provisions are met; • branches of insurers and reinsurers established in a third country authorised by the ASF; • public insurers and reinsurers set up in accord- ance with Portuguese laws, provided that such undertakings have insurance or reinsurance opera- tions as their object, under conditions equivalent to those under which undertakings governed by private law operate; • insurers and reinsurers in the legal form of a Euro- pean company in accordance with the applicable legislation; and • insurers and reinsurers established in other EU member states acting in Portugal under freedom of services (FoS), provided certain provisions are met. General Requirements Applicable to Portuguese- Based Insurers and Reinsurers Insurers Insurers must have as their exclusive corporate pur- pose insurance activity and operations arising directly therefrom, excluding any other commercial business. The taking-up of direct insurance business is subject to prior authorisation from the ASF, which is granted for a particular class of insurance, covering the entire class, unless the applicant wishes to cover only some of the risks pertaining to that class. Portuguese law does not allow companies to pursue activity simultaneously in life insurance and non-life insurance, with one exception: the authorisation for life insurance may comprise accidents and sick- ness (classes of non-life insurance). Other than that, authorisation cannot simultaneously encompass life and non-life insurance.
The minimum share capital is as follows: • EUR2.5 million for non-life insurers to conduct business in sickness, legal expenses or assistance; • EUR7.5 million in the event the undertaking con- ducts business in more than one of the classes referred to in the preceding bullet or in any other class or classes of non-life insurance; • EUR7.5 million in the event the undertaking con- ducts life insurance business; and • EUR15 million in the event the undertaking con- ducts business simultaneously in life insurance and one or more classes of non-life insurance, where authorised. Reinsurers Reinsurers must have as their exclusive corporate purpose reinsurance activity and related operations, including the management of shares held in other companies within the financial sector. The taking-up of reinsurance business is subject to prior authorisa- tion from the ASF, which is granted for non-life reinsur- ance activity, life reinsurance activity or both. The minimum share capital is as follows: • EUR7.5 million in the event the undertaking con- ducts non-life reinsurance or life reinsurance busi- ness; and • EUR15 million in the event the undertaking con- ducts both kinds of reinsurance activity. Requirements applicable to both insurers and reinsurers Insurers and reinsurers must be incorporated in the legal form of a public limited liability company ( socie - dade anónima ) with nominative shares and subject to registration at the Commercial Registry Office, tax authorities and social security. The share capital must be totally subscribed and paid up at the incorporation. The shareholders, members of the board and key- functions staff are subject to fit and proper criteria. The authorisation granted by the ASF permits insurers and reinsurers to pursue business in Portugal, also covering the right of establishment and the freedom to provide services in other EU member states – pro-
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