We would like to wish all our Clients and Friends

A Very Merry Christmas and a Fantastic 2012!

Here are excerpts from a great article that was published in the Canarian Weekly 14th May 2010. It is important for expats to understand the legal implications of  an insurance contract and the correct process of cancellation.

Mr. Smith is phoning around asking for quotes, the day before the renewal date of his car insurance policy. But Mr. Smith doesn’t know that it is already too late. He should have given two months notice to cancel the policy. Don’t think that by cancelling the DD or by not paying the bill, Mr. Smith will get away with it. Probably he will face a judicial process. Read here how you can avoid getting in to trouble and change insurance company in the correct manner.

An insurance policy is a contract. Just like your rental contract or even your work contract. Having that in mind, Insurance is a contractual relationship entered into by the insurer and the insured (you). The Deal is quite simple: on such a contract, commonly called the policy, usually provides that, on payment of the premium, the insurer promises to indemnify and reimburse the insured for any loss incurred by him from certain stated causes. This contract in Spain is ruled by the Law 50/1980, and if you want to cancel your policy you should know the following:

Most people are not aware that they should advise the insurance company 2 months before it is due. This is the Law in Spain, and even if you are not “aware” of the law you are obliged to act accordingly. The Law of Insurance (art. 22 de la Ley 50/1980) says that if you want to cancel your insurance contract, you must send a written letter or fax with a minimum of two months notice. If you don’t do that, Insurance Companies can reclaim in court the payment of the premium. Before the European Economical Crisis, most Insurance Companies didn’t bother to claim unpaid premiums, but nowadays, as sales are decreasing and costs are getting higher, Insurance Companies are coming back to claim unpaid premiums, specifically if they are more than 300€/a year. And Insurance Companies have nothing to lose: when they take you to court, if they win, you are entitled to pay your premium, the cost of their lawyer (and yours) and the costs of the judicial process. The Insurance Company will win, because they are acting accordingly to the law.

Bad Bank or Good Bank?

One of the reasons why Insurance Companies are getting back to claim unpaid premiums from their clients is mainly due to bad banking practices in Spain. Banks can’t give anymore mortgages so they are looking for other ways of income. So Bank directors are pressuring their employees (who normally have no clue about insurance) to sell insurance to their clients, no matter how. Bad banking practices include all sorts of schemes: from breaking data protection, getting inside your account, checking when your insurance is running out and calling you before the renewal to give you a more “tentative” price, or worse, to return your direct debit on purpose, so that they can place their insurance product on you. In the last year we have seen how Banks in Spain are returning massive stocks of insurance receipts without the permission of their clients. So Insurance Companies to avoid this “Old-west Scenario” are getting back to claim their rights in court.

How it Works

So the policy, as a contract, must contain all of the elements necessary for a valid contract. The mutual considerations here are the premium paid by the insured and the promise of coverage made by the insurance company.

The causes of damage as provided for in the policy are also called “risks”. The company specifically stipulates those risks which are covered under the particular policy. Any risk that is not stated shall not be included. A policy must have a subject which is to be insured. It may be the life of a designated person, a house, your car, etc. The risk or peril against which the life or property is to be insured must be specified in the policy: the death of a person, liability resulting from the negligent operation of an automobile, etc.

The amount for which the policy covers the loss must be indicated. The insurance taker is the holder of the policy. Normally the term during which the policy will be in effect is 1 year, after which it is renewed automatically unless you decide not to renew it, in which case you should previously advise the insurance company 2 months before it is due.

An insurance company may cancel an insurance policy only under the following circumstances: If the insured has lied or made false statements on his/her application or in a claim he/she submitted; If the peril covered is increased. In these cases when there is no good faith, the insurance company shall pay the difference between the premium agreed and the premium which should have been paid for the increase of the risk; if the insured object is sold.

Failure to pay premiums when they fall due, there is a 30-day grace period available to the insured to give him an opportunity to pay the premium without affecting his rights under the policy.

Spreading the word – Market Update by David Rogers.

Global – World stocks slipped on Friday as European shares halted a four day rally, while government bonds in Europe climbed, with investors bracing for U.S. jobs data that could reinforce concerns the world’s biggest economy is losing momentum.

Signs that Greece will miss its 2011 deficit target of 7.6percent underscored concerns about the euro zone debt crisis, prompting investors to lighten their risky assets.

Global - Global import and export growth rates slowed in the second quarter of 2011, signalling a faltering recovery worldwide, according to the Organisation for Economic Cooperation and Development (OECD).

Total imports of the G7 nations (Japan, France, Germany, Italy, the U.K., the U.S. and Canada) and the Bric countries (Brazil, Russia, India and China) increased by just 1.1% between April and June. This is a big drop from the 10.1% recorded in the previous quarter.

These countries also say exports grow by just 1.9percent compared with 7.7percent previously.

China and Brazil were the only two OECD members to register an increase in imports, while only China also experienced export growth.

Asia – In 2011 and 2012 it is expected that India and China together will contribute more than 40percent of global growth, according to a new report from Julius Baer.

The first Julius Baer Wealth Report to focus on Asia, was published on Wednesday, it provides an analysis of the High Net Worth Individuals (HNWI) in the Asia region.

In the report, Julius Baer said it expects the estimated 1.16 million HNWIs in Asia, with wealth of around USD5.6tn in 2010, to more than double to 2.82 million by 2015, with these individual’s wealth expected to triple to USD15.81m over the same period. China alone is forecast to have 1.4 million HNWIs with wealth of USD8.76tn by 2015.

However, Indonesia stands out as having the highest expected rate of growth for HNWIs over the five year period, with an expected increase of 25percent, bringing the total number of HNWIs to 99,000, with wealth of USD487m by 2015.

Spreading the Word – Market Update by David Rogers

Blacktower Financial Management (International) Ltd

If you have a question for David or require any further information request it here.

Greece – The Greek parliament narrowly voted in favour of a drastic package of austerity measures on today, intended to save the country from defaulting on its debts.

The proposed tax hikes and spending cuts have been deeply unpopular with the Greek public. A nationwide 48-hour strike is under way and violent clashes are continuing in the streets of the capital, Athens.

Greece is heavily in debt and the package is needed to win the latest tranche of a EUR110bn loan. There will be a second vote on Thursday for the implementation of different parts of the package, such as tax rises and the sale of state assets.

Global – French Finance Minister Christine Lagarde has been officially chosen to lead the International Monetary Fund (IMF). She will become the first female managing director of the global lending organisation.

Before the IMF’s 24-member board voted to appoint her to the position, she was endorsed by the Obama administration. She had also won support from Europe, China and Russia.

Lagarde takes over at a tumultuous time. Europe’s debt crisis is intensifying.

Asia Pacific – Credit ratings for companies based in the Asia Pacific region are likely to remain stable for the rest of the year, investors have been told.

Moody’s Investors Service points out the first half of 2011 saw little change in the ratings of the area’s non-financial corporates and predicts this trend will continue over the coming six months.

In the year to date, the share of rated companies with ‘stable’ outlooks in the region has risen to 83percent, a 3percent increase on the same period in 2010.

Brazil – The government bond ratings of Brazil have been upgraded from Baa3 to Baa2 by Moody’s Investors Service. Brazil’s rating was last moved by Moody’s on September 2009, when it was lifted from Ba1 to Baa3 and given a positive outlook.

The ratings agency says its new decision is based on Brazil having a sovereign credit profile consistent with ratings in the higher Baa range and a moderate susceptibility to credit boom-related event risk.

Want to know how to make money or save tax through these trying times: Call David Rogers on 0034 952 816 443 or 0034 622 345 558 or email david.rogers@blacktowerfm.com

The right advice

Getting the right financial advice as an expat in Spain is so very important. Over the coming months we will be publishing articles by David Rogers of Black Tower Financial Management. In my view David is the person to speak to when seeking advice in finance related matters.

The Spanish Advantage (Investments)

There are a substantial number of Expats living in Spain that may not be aware of certain advantages open to them purely as a result of the fact that they live here.

For example did you know that you can be protected from the European Savings Directives rules on Withholding Tax, which is a tax levied on growth from savings or investments?

To avoid this you need to take advantage of the favorable way in which Spain looks at investments. In this regard it is possible for a person who lives in Spain to open what are known as Spanish Compliant Portfolio Accounts (SCPA). A SCPA is an extremely tax efficient vehicles for holding invested funds and cash.

For example: If you held funds on deposit in the general banking system or you have funds invested in non-complaint products, under the European Savings Directive, any growth obtained is subject to withholding tax.

The current rate of withholding tax is 19%. (This is tax law and is always charged on growth, although not readily explained by the banking system or many off-shore providers.

What does that mean? Well as an example if you had €100,000 either on deposit or in certain non-compliant off-shore structures and that grew to €110,000 then there would be a 19% tax charge applied to the growth element only (€10,000).

This would result in withholding tax charge of €1900. This applies no matter whether you touch the original amount or the growth element. In other words tax on the growth is unavoidable.

Unless you take advantage of a Spanish Compliant Portfolio Account, in which case, the tax treatment is far more favorable.

In this case if the €100,000 had grown to €110,000 and the policy owner decided NOT to touch the investment at all, then there would be NO tax to pay. This is known as tax free role up, because the policy owner can now get growth on the tax that they would have paid if the had been in the banking system or in non-complaint off-shore structures.

Furthermore, should the policy owner wish to drawdown from the policy a Spanish Compliant Portfolio Account also provides an extremely favorable tax position for the policy holder.

In this case for example, if the client wished to take the whole growth (€10,000) then this would be treated as follows:

Of the €10,000 withdrawn, €9,000 would be treated as Return of Capital, and be exempt from tax (zero tax to pay) and the remaining €1,000 would be taxed as investment income which is levied at 21%. So in the case it is possible for the policy holder to get hold of €10,000 with all taxes paid for only €210 or 2.1% in tax. Or put another way he would have saved €1,690 in tax charges alone.

There is not a more favorable (legal) way of dealing with invested funds and as such this should be, at least, considered as an option for anyone living in Spain or anyone that has funds invested in either the banking system or in non-complaint investment portfolios.

In this regard many Expats have been sold and/or invested in non-complaint products so if you have funds invested its worth establishing of they are Spanish Compliant.

If you want to know more, or want to establish whether you are in non-compliant products please contact me on 0034 952 816 443 or 0034 622 345 558 or email me at david.rogers@blacktowerfm.com

Expats in Spain

Moving to Spain temporarily or permanently is a decision that an expat thinks deeply and thoroughly before taking it. Many beloved ones will stay back in their home country and the expat will not see them as often, even though Internet and the low cost airlines will make him feel closer to home than some years ago. However, within the decision of moving to Spain one must consider the possibility of passing away on Spanish soil. No one wants this to happen, but it can happen. For this reason, one must evaluate what options the insurance Spanish market can offer you to fulfil this need. This type of insurance has been distributed in Spain for almost a century and works different than in the rest of Europe. In Spain it is distributed as an independent product and it acts as a service provider, managing the insurance company all the paperwork. With the Caser Expatriate Funeral Plan a one call service is provided in English 24 hours 365 days. This helpline service is the only call that the next of kin needs to make. Caser will then take over the arrangements and planning of all of the arrangements be it a funeral or repatriation.

What should I know?

Let’s list for example some of the key aspects that an expat should consider before contracting a funeral insurance product.

1. How much does funeral insurance cost?

It depends on the insurance company and the product. Caser offers a product to the expats of under 71 years old that includes repatriation of the body to the home country, a 24 hour helpline (legal and product orientation) and many other covers from a very competitive premium. You will find three guiding examples with their annual premium:

1. Man, 65 years old, English nationality: 140 euros / year.

2. Man, 55 years old, English nationality: 65 euros / year.

3. Man, 45 years old, English nationality: 35 euros / year.

Don’t forget that if an expat contracts an insurance policy, he will have access to funeral services at a much lower rate than if he contracted the services directly himself.

2. Is there a waiting or grace period?

No. For example, if an expat contracts a policy the 1st of January of 2011 and he passes away on March 2nd, 2011 the policy will have full coverage. This is a huge difference and advantage if we compare funeral insurance with other products distributed in Spain under the name of Funeral Plans where you must pay upfront between 3.000 to 8.000 euros in some cases. And if you pay under instalments you could end up paying up to 10.000 euros.

3. Can an expat be sure that the insurance company will cover 100% of the funeral costs?

Yes. The insurance companies increase yearly their premiums based on the cost of living in order to guarantee at all times 100% of the covers that were contracted by their clients.

In Spain, more than 50% of the population has funeral insurance. This fact must be taken into consideration by any expat due to two relevant aspects: experience and infrastructure. Over 100 years of experience back up the Spanish exclusive know-how on this matter and also have allowed the creation a solid infrastructure to service the market in Spain and abroad.

4. Could there be a case where the Insurance Company would not pay the funeral service contracted?

If the policyholder has knowledge of a health problem when the funeral policy is being contracted, he should inform his insurance intermediary so the insurance company can evaluate his case. If not, in case of death, if the insurance company, from the information obtained from the death certificate and its medical evaluation, determines that the policyholder’s health condition was not the one stated in the policy, could decide to decline the coverage. In these cases, the family would be informed about this decision and they would be offered the possibility to provide medical documentation that could prove that the policyholder had no knowledge of his health problem at the time of contracting the policy. If the information provided to the insurance company showed enough positive proof, the insurance company would pay out immediately all the funeral services costs as stated in the policy. Keeping an updated medical history, not just for this matter, it will always be a good idea.

5. Would the insurance company pay back any money to the relatives if the funeral costs were lower than what the insured had paid in life?

It depends on the insurance company. Caser pays back 25% of the net premiums as long as three years have gone by since the issue date of the policy, the policy is active, and all the receipts have been paid and no previous coverage has been made to the same policy.

You can get more information on funerals in Spain here, and you can get an accurate quotation of costs for your individual circumstances here.

Threatened strike at Spanish Airports called off

The tourism industry breathed a sigh of relief as AENA, Unions and the Ministry of Development reached a tentative agreement that will avoid the 22-day strike at airports called for Easter and over the summer holidays. The deal, reported this morning, came after 17 hours of negotiation.

For the agreement to be reached between the unions (CCOO, UGT and the USO and the direction of AENA) must be approved by the assembly of the unions and workers and ratified by AENA in a referendum, which could happen in middle to the end of next week.

Agreed terms

The preliminary terms provide that the collective agreement applies to all workers regardless of which AENA company they work for, including dealerships. This collective agreement shall remain in force until 2018.

Another aspect of the deal is that AENA have agreed to have a seat on the board of directors of the new model concession airport, specifically in the airport concessions from Madrid-Barajas and Barcelona-El Prat

Also, the tentative agreement includes the maintaining of jobs and working conditions of workers of AENA, AENA airports and concessionaires.

Easter IS SAFE

Secretary of State for Transport, Isaiah Táboas, a member of the negotiating table, has welcomed the agreement under which “the tourism sector and citizens can be confident that they can travel during the Holy Week.”

Ever since the announcement of the strike on March 8, concern was widespread in the tourism industry. Táboas saw how it threatened the “slight recovery” that had been anticipated in previous months. The employers’ sector-hotels, travel agencies and other business groups, immediately expressed their firm opposition to a strike that would “cause irreparable damage to tourism and the image of Spain” urging the parties involved to agree terms to avoid the strike at airports.

The mere announcement of the strike in recent weeks has resulted in cancellations of bookings and travel arrangements. However, the tourism sector expects the negotiated settlement, reached with a sufficient margin of time before the holiday period at the beginning of Holy Week (17 to 24 April) to return to normal. This should allow for reservations and contracts within the tourist regions, which like the Canaries had been seriously jeopardized over the Easter holiday, to hang the “no vacancies” sign up once again.

Many thanks to Raquel Pérez for this article.  If you are in need of legal advice relating to any legal matter you can contact Racquel on the details below…

Raquel Pérez

Director

raquel@perezlegalgroup.com

Perez Legal Group

Centro Comercial Elviria, oficina 6

29604 Marbella

(T) +34 952 833 169

(F) + 34 952 830 262

(M) + 34 699 45 66 97

Angela Buick, Granada…..

“Thank you for professional service as always!!”

Debby Evans, Costa Locks……

“John is a mine field of information. Very reliable and always offers choices and guides you through very difficult decisions on insuring your home, life, car and more! I would highly recommend his services to everyone.”

Andy Owner/Editor at Ronda Today…….

“When it comes to getting insurance in Spain, John is one of… no I correct that, he’s the only guy I recommend my friends talk to.”

Steve Ingram, Tenerife…..

“I have full praise for your Insurance Services John, good prices, communication and after-sales too.
I would and have highly recommend(ed) Insure Ex-pats. Thank you.”

David Rogers, Benalmadena……

“I have used the services of John McKenzie on several occasions and I continue to do so. I have found John to be very prompt and highly competitive. I have also worked closely with John in various B2B networks and have found his manner and professionalism to be of great benefit to all that meet him.  In this regards I would not hesitate to recommend John to any of my family, friends, colleagues or associates.”

Cheryl Kennell, Eco Electrics……

“John was recommended to us for our car insurance and the service we received was friendly and extremely efficient. Since then, we have taken out home insurance and public liability insurance – all very easy and price competitive.”

David Phillips, Star La Cala Real Estate…….

“I have used John on several occasions on a personal basis for my insurance needs. I have also used him on a professional basis providing cover and excellent advice for our clients  John gets my recommendation every time”

Luisa Murratore. Mijas Costa……….

“I have taken out both my car and household insurance with Caser, through Insure Expats and have been very pleased with the prices and level of service that I have received. I always recommend John to any of my friends who are looking for insurance and always find the quotes that and my friends and I receive to be competitive and more realistic than a lot of other insurance companies out there. Thanks John!”

Susan Dyson, First Stop Secretarial………

“John is the consummate professional in his field of insurance. Whenever I’ve asked for a quote for his different products I have been given the information in a timely fashion. John the follows up with a telephone conversation in which he explains everything and invites you to ask him any questions. I have used John’s insurances services for a while now and have never hesitated to recommend him to my friends, colleagues and associates.”

Elaine Barclay, Slush Spain SL…….

“I would not hesitate to recommend John to anybody who requires his services. He is full of enthusiasm and you can completely rely on him to do what he says he will.”

Shrah Hawes, Greenhouse Clothing Spain………..

“I would like to thank you for your support and professionalism in processing and finding the right insurance for me.  As you know I had been insuring both our cars with one of your competitors and  not only did you save money, but you also gave us more benefits on our insurance policy. It was an easy decision therefore when you did exactly the same when asked to quote for our household insurance. Thank you for “listening” to what we want and need – it’s to your credit.  It is for this reason therefore that I wish you to quote for my Public Liability insurance for the business. John it is a pleasure to give you our family and corporate business.  Thank you and I look forward to speaking to you soon. Well done and don’t change what you are doing – you are head and shoulders above your competitors.”

Matthew Gomis, Reconditioned Laptops……

“I have to say, that in all the years I’ve lived on the coast you have been among the very few truly professional and efficient people I’ve ever dealt with and its a pleasure to recommend you to whoever I can. Jane & Neil are also delighted with both quality of service and value for money. Hope we can all count on you for many years to come.”

Planning your holidays?

It is usually about this time of the year that we are thinking about planning our holidays and trips back to visit our loved ones. For expatriates this often includes several journeys and the purchase of an expensive annual travel insurance policy.

Free travel insurance

Here’s some great news and an opportunity to save money! Did you know that Caser Seguros, Spain’s 4th largest insurance company offer FREE TRAVEL INSURANCE as part of their expatriate home insurance policy?

And things get even better! Caser are also offering a 20% INTRODUCTORY DISCOUNT ON ALL HOME POLICIES contracted through Insure Expats before the 31st January 2011.

Introductory discount

Why not request a no obligation quote now and see how much you could save this year?

TO ALL OF OUR READERS

A VERY MERRY CHRISTMAS

AND BEST WISHES FOR

A FANTASTIC 2011!