The new Real Estate Credit Act was published in the Spanish Official Gazette on 16 March and entered into force in June 2019, allowing banks to adapt properly to the changes it introduced.
What Do These Changes Mean?
These changes represent fresh air for both insurance consumers and insurance companies.
The law prohibits certain practices by banks that condition consumers into choosing a specific insurance product when taking out a mortgage loan.
Thanks largely to proposals from the Spanish Association of Insurance Brokerages, ADECOSE, to achieve regulation of this kind, the protection of these consumers has increased.
Greater Freedom
This makes consumers freer to choose the best insurance for them, while insurers can also operate more easily in a free market.
The regulation prohibits banks from charging consumers additional expenses for carrying out a comparative study of insurers if the interested party refuses to take out the bank’s final proposal.
Without Harming the Consumer
Nor may loan conditions be modified in a way that harms the consumer.
This applies when the consumer chooses insurance different from the offer made by the bank, whether the decision is made during the arrangement of the banking product or during renewal.