PORTUGAL Law and Practice Contributed by: Leonor Futscher de Deus, Broseta Abogados, SLP
5. Distribution 5.1 Distribution of Insurance and Reinsurance Products The Insurance Distribution Directive (IDD) was trans- posed into the Portuguese legal order by the Insurance Distribution Law without substantial divergences. Portuguese-Based Intermediaries Pursuing insurance distribution business is subject to prior authorisation from the ASF, except for activities that are carried out under an exemption. The Insurance Distribution Law provides for the fol- lowing types of insurance intermediaries: • ancillary insurance intermediaries; • insurance agents; and • insurance brokers. The requirements applicable to insurance intermediar- • acts for and on behalf of one or more insurers pur- suant to a distribution contract executed between the parties; • conducts insurance distribution on an ancillary basis to its professional activity; • cannot distribute insurance products covering life insurance or liability risks, unless said cover complements the good or service the intermediary provides as its principal professional activity; • cannot distribute IBIPs; • subject to professional qualification and profes- sional indemnity insurance, but with lower require- ments than agents and brokers; • registration application at the ASF must be filed by an insurer; and • the ASF will grant authorisation within 60 days of receiving the application or, where applicable, after receiving any additional information from the applicant. Agent ies can be summarised as follows. Ancillary insurance intermediary • acts for and on behalf of one or more insurers, pur- suant to a distribution contract executed between the parties;
The reinsurance agreement should be formalised by means of a written document between and signed by the parties. Unless otherwise stated, the reinsurer does not have any relationship with customers. 4. Transaction Activity 4.1 M&A Activities Relating to Insurance Companies Mergers The merger of insurers or reinsurers may be authorised by the ASF, provided that the conditions applicable to the taking-up and pursuit of the business under the Insurance Activity Law continue to be fulfilled. Several of the provisions regarding incorporation of insurers Any person who intends either to acquire, directly or indirectly, a qualifying holding in an insurer or reinsurer or to further increase such qualifying holding ‒ as a result of which the proportion of the voting rights or of the capital held will reach or exceed the thresh- olds of 20%, one-third or 50%, or the company con- cerned becomes its subsidiary ‒ must notify the ASF of said acquisition project in advance. Notification also applies when the qualifying holding is below the mentioned thresholds, but the acquisition is likely to enable the acquirer to exercise a significant influence over the management of the company. The ASF may decide to oppose the acquisition project if the acquirer fails to guarantee sound and prudent management of the company. The reduction/disposal of a qualifying holding of a stake to below the above-mentioned thresholds is likewise subject to prior notification to the ASF. or reinsurers apply. Qualifying Holdings The Insurance Activity Law does not impose limita- tions regarding foreign ownership/investment, provid- ed there is compliance with the provisions laid down therein.
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