The professional civil liability arising from the distribution activities of an exclusive insurance agent is, as a general rule, attributed to the insurance company with which the agency contract has been concluded, including the actions of its external collaborators, in accordance with the legal regime applicable to insurance agency contracts and the structure of insurance distribution and its parties.
This does not preclude the insurer from claiming damages from the agent internally in the event of a breach of contractual duties of care, as established by case law in a case involving a failure to verify the policyholder’s signature on the health questionnaire, in line with the agent’s obligations to act with diligence and in good faith in the interests of the policyholder.
At the same time, the distribution framework requires registration and compliance with requirements to operate as an exclusive agent, subject to verification and control by the insurance company, without prejudice to the potential administrative liability of the various parties within the system and, in particular, the insurer’s liability for infringements committed by its exclusive agents vis-à-vis the authorities.
But we ask ourselves: what is the legal rule governing the attribution of professional civil liability of the exclusive agent?
The sectoral regulation governing insurance distribution in Spain, following the repeal of Law 26/2000, is Royal Decree 3/2020 of 4 February, which transposes Directive (EU) 2016/97 on insurance distribution and sets out the regime applicable to the distribution of insurance and reinsurance (definition and scope, distributors and registration, cross-border activity, supervisory control and rules of general interest)
It is established that, without prejudice to any other liabilities the agent may incur, the professional civil liability arising from the actions of the insurance agent in the course of distribution, and that of their external collaborators, is attributed to the insurance undertaking with which the agency contract has been concluded, “in accordance with the provisions of the agency contracts entered into”
This attribution falls within the broad concept of insurance distribution, which encompasses advice, proposals, preparation, conclusion and assistance in the management and performance of the contract, including claims assistance, activities typically carried out by the agent in the course of business.
What role do the agency contract, registration and the agent’s duties play in determining liability?
The insurance agency contract must be formalised in writing; it is of a commercial nature and is governed by the terms agreed and, subsidiarily, by the Agency Contracts Act.
To act as an exclusive agent, the insurance company must verify requirements and maintain an internal register, as well as establish internal policies and procedures to ensure the integrity and training of those involved in distribution, with the register being subject to the control of the supervisory authority.
In terms of contractual obligations, the agent must act loyally and in good faith, with the diligence of a prudent trader, providing the employer with the information necessary for the proper management of the entrusted operations; this functional standard is relevant for assessing breaches that may trigger internal consequences against the agent, without altering the external rule of legal attribution of professional civil liability to the insurer,
How does the attribution of liability to the insurer relate to any recourse against the agent and to administrative liability?
The legal attribution of liability to the insurer does not prevent the insurer, in its internal dealings, from claiming compensation from the agent for the losses caused by the agent’s breach of contract.
This is stated in a case where the agent failed to ensure that the health questionnaire was signed by the policyholder, thereby depriving the insurer of essential information for assessing the risk and causing compensable damage; the agent’s conviction for negligence is upheld, and it is clarified that the legal provision regarding the insurer’s liability towards third parties does not preclude a claim for reimbursement or recourse against the agent in accordance with the contract and applicable civil law.
In the public sphere, the penalty regime identifies offenders and, specifically, establishes that insurance undertakings are liable to the Administration for breaches of the distribution regulations committed by their exclusive insurance agents, without prejudice to any administrative liability that may be attributed to the latter, thereby reinforcing the framework of institutional attribution of distribution risk.
In the judgment under consideration, STS 1692/2025
- An exclusive insurance agent arranged a life insurance policy.
- He failed to verify correctly that the health questionnaire had been signed by the actual policyholder.
- As a result:
- The insurer had to pay the benefit (disability).
- Subsequently, the insurer brought a recourse claim against the agent for the damages suffered
The legal issue raised is whether, in accordance with the Insurance Distribution Act, which attributes the agent’s liability to the insurer,
Can the insurer seek recourse against the agent for his negligent conduct?
The Supreme Court’s doctrine is as follows:
The purpose of the Insurance Distribution Act is:
-
- To protect third parties (policyholders/injured parties).
- It allows them to claim directly against the insurer.
It does not regulate internal relations between the insurer and the agent.
The insurer may seek recourse and claim against the agent:
-
- For the damages caused by their negligence.
- Even if it has had to respond to the insured party.
There must have been negligence on the part of the agent who breached their professional duty of care, as the agent was required to verify the authenticity of the signature and the details.
This omission prevented the insurer from correctly assessing the risk.
The court rejected the claim for ‘loss of opportunity’ but applied the criterion of alternative conduct in accordance with the law:
-
- Had the agent acted correctly, the damage would not have occurred.
Conclusion: Consequently, in its ruling, the Supreme Court dismissed the agent’s appeal, confirmed the insurer’s civil liability and ordered the agent to compensate the insurer for the damage caused.
However, there are two levels of liability:
- External: the insurer is liable to the policyholder (third-party protection).
- Internal: the insurer may seek recourse against the negligent agent.
At Belzuz Abogados S.L.P., as a firm specialising in Insurance Law and Civil Liability, we are available to advise you on the impact of this reform, both from the perspective of insurance practice and in the defence of the interests of victims and policyholders.