Spain’s National Markets and Antitrust Commission (CNMC) has approved structural reports addressing the upcoming regulatory overhaul of the Spanish insurance and reinsurance sector. While the antitrust watchdog broadly welcomed measures intended to reduce bureaucratic burdens for smaller firms, it cautioned that Spain is introducing domestic solvency mandates that are significantly more restrictive than those outlined by the European Union.
The regulatory review evaluates a preliminary draft law and royal decree designed to amend Spain’s existing Law 20/2015 on the organization, supervision, and solvency of insurance entities. The sweeping modifications serve as Spain’s domestic transposition of updated European Union solvency directives.
The CNMC expressed support for the reform’s emphasis on proportionality, which scales compliance mandates based on an insurer’s total size and systemic market importance. A central element of this approach is the creation of a brand-new classification for “Small and Non-Complex Undertakings” (SNCUs). Under the current proposal, companies achieving SNCU status will benefit from simplified corporate governance structures and reduced technical reporting frequencies. Furthermore, the implementation of a “positive administrative silence” policy means that an operator’s initial classification application will be automatically approved if regulators fail to respond within a designated timeframe, accelerating overall market access.
Despite these positive adjustments, the CNMC discovered multiple areas where Spanish lawmakers chose to implement gold-plating—the practice of layering stricter national mandates on top of baseline EU requirements. The regulator warned that these excess hurdles could place Spanish firms at a distinct competitive disadvantage within the broader European single market.
For example, while the baseline EU Directive grants member states the explicit authority to exempt both SNCUs and captive insurance firms from costly, mandatory solvency balance sheet audits, the Spanish framework retains this expensive obligation. Additionally, for larger entities seeking individualized proportionality exemptions, Spain’s legislative draft relies on a “negative administrative silence” mechanism, meaning unaddressed requests are automatically rejected. The CNMC also highlighted lingering regulatory barriers that explicitly block social provident mutual funds from merging with alternative corporate legal structures or expanding seamlessly across the EU, an issue that potentially compromises the principle of competitive neutrality.
To maintain equilibrium between financial sector stability and healthy market competition, the CNMC recommended that lawmakers relax the audit requirements for small and captive entities while expanding positive administrative silence policies. The agency emphasized that any strict national divergence from EU standards must be backed by heavy justification to prove it does not establish disproportionate barriers to entry. Finally, the antitrust authority urged swift development of cross-border operational tools, ensuring that deeper integration into the European single market can successfully offset local regulatory friction.
