PORTUGAL Law and Practice Contributed by: Leonor Futscher de Deus, Broseta Abogados, SLP
vided the notification procedure between supervisors is duly complied with. The ASF must grant authorisation within six months of receiving the application or, where applicable, after receiving any additional information from the appli- cant – but never after 12 months from the date the application was initially filed. The authorisation will expire in the event the undertaking is not incorporated within six months or does not start its activity within 12 months from the date the authorisation was granted. Consumer Insurance, SME Insurance and Corporate Insurance Large risk versus mass risk The Portuguese insurance legal framework is based on two main concepts: mass-risk insurance and large- risk insurance. The distinction between these two types of insurance arises from the Insurance Activity Law. Large-risk insurance comprises the following risks. • Risks classified under the following classes: (a) Railway Rolling Stock; (b) Aircraft; (c) Ships; (d) Goods in Transit; (e) Aircraft Liability; and (f) Liability for Ships. • Risks classified under Credit and Suretyship class- es where the policyholder is engaged profession- ally in an industrial or commercial activity, or in one liberal profession, and risks relate to such activity. • Risks classified under Land Vehicles, Fire and Nat- ural Forces, Other Damage to Property, Motor Vehi- cle Liability, General Liability and Miscellaneous Financial Loss classes, insofar as the policyholder exceeds at least two of the following criteria: (a) a total balance sheet of EUR6.6 million; (b) a net turnover of EUR13.6 million; (c) an average number of 250 employees during the financial year; or (d) if the policyholder belongs to a group of undertakings for which consolidated accounts are drawn up, the foregoing criteria must be applied on the basis of the consolidated accounts.
Mass-risk insurance encompasses all insurances that do not fall under the scope of large-risk insurance. Mass-risk insurance is subject to stricter legal rules
with a view to consumer protection. Consumers versus professionals
The Insurance Contract Law does not provide for an autonomous category or definition of “consumer insurance” versus “professional insurance”. Instead, it bases the protection of consumers on the imposition of stricter legal provisions with regard to mass-risk insurance. As a rule, insurance contracts are governed under contractual freedom. However, mass-risk insurance is subject to several limitations that aim to protect the consumer, who – depending on the circumstances – may act in the capacity of policyholder, insured or beneficiary. The protection granted by the law is not based on the personal or professional purpose of the policyholder, it is based on the classification of the risk (mass-risk versus large-risk). In this regard, the Insurance Contract Law establishes that certain rules are mandatory as regards mass-risk insurance. Said rules are divided into: • absolutely mandatory rules (rules that cannot be waived by the parties); and • relatively mandatory rules (rules that allow the parties to provide for different solutions other than those established by law, provided said solutions benefit the policyholder, the insured or the benefi- ciary, where applicable). Legal restrictions Furthermore, the Insurance Contract Law settles that the following risks cannot be guaranteed under Por- tuguese law, under penalty of the insurance being null and void: • criminal, administrative or disciplinary liability; • kidnapping, sequestration and other crimes against personal freedom (save for civil compensation); • possession or transportation of narcotics or drugs, the consumption of which is forbidden; and • the death of children under 14 years old or of those who are incapable of governing themselves owing
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