Mutual insurance companies

The condition of mutual member is inseparable from that of policyholder or insured, and limits cannot be placed on joining the mutual society other than those provided for in the statutes and for justified reasons. On the other hand, these entities are democratically managed by the mass of mutualists, who have in the General Assembly the supreme body of expression, and in the Board of Directors elected in the assembly, the fundamental governing body. All this means that these entities should be considered as part of what has been called, in recent years, the social economy, together with cooperatives and labor companies.

Mutual insurance companies act as a complementary social security instrument to the compulsory one, so their benefits are compatible with and totally independent of the rights that may correspond to their mutual members or beneficiaries due to their inclusion in the compulsory social security schemes. However, mutual insurance companies may be alternatives to the compulsory social security regime for self-employed workers, as is currently the case with professionals such as lawyers, architects, quantity surveyors, etc. Consequently, mutual insurance companies can carry out pension fund management operations under the terms of the legislation that is applicable to them.

Mutual insurance companies can be of two types depending on the regime of the contributions they receive: a fixed premium or a variable premium.

The Administration of the Community of Madrid assumed, from January 1, 1995, the competences, including the legislative ones (respecting the insurance legislation and the basic regulations), with respect to the social security mutual societies not integrated in the social security, when their registered office and the scope of operations and location of the risks they insure are limited to the territory of the Community of Madrid. Based on this, it was approved Law 9/2000, of June 30, on Social Welfare Mutualities (BOCM no. 160, of July 7).

Once the competence was assumed, the Order 983/1997, of April 7, of the Ministry of Economy and Employment, which creates the Register of Social Welfare Mutualities of the Community of Madrid (BOCM No. 88, of April 15), whose nature is merely administrative, being the Mercantile Registry the one that has constitutive character.

Article 24 of the Law 9/2000, of June 30, on Social Welfare Mutualities (BOCM no. 160, of July 7) determines that, in the constitution of social welfare mutual societies, at least 25 mutual members must attend, if they are natural persons, one being sufficient, if it is a legal person. In the latter case, you must undertake to insure the risks to the person or things that affect at least 25 individuals.

Once the mutual society has been established and the corresponding notarial deed has been formalized, it must be registered in the Mercantile Registry of Madrid prior to requesting administrative authorization to carry out the mutual activity.

The authorization, granted following a report from the competent body of the General State Administration, will determine the benefits that the mutual society can recognize, as well as its registration in the Register of Mutual Societies of the Community of Madrid, in accordance with the provisions of article 6 of the Law 9/2000, of June 30, on Social Welfare Mutualities (BOCM no. 160, of July 7).

The bylaws must be included in the public deed of incorporation, and registered in the Mercantile Registry, as well as their possible modifications. They must include the denomination and the indication about whether it is a fixed or variable premium, or if it operates with both systems; also, the corporate purpose, the scope of action, the rights and obligations of mutual members and the objective requirements to be admitted; the information rights of mutual members; general assembly classes; the composition of the board of directors; the participation, where appropriate, of protective persons; as well as the rules on the mutual fund and the liquidation of the exercise, the responsibility for the social debts, the possible spills and the system of election of the positions.

In no case will the coverage and benefits scheme be incorporated into the statutes, and must be regulated either in a benefit regulation (if there are also the so-called authorized social benefits, they must be contemplated in another different regulation) or through insurance policies, or combining both. instruments.

As for its structure, the law requires the existence of the General Assembly, the meeting body of all mutual members to deliberate and adopt agreements and the supreme body for expressing the company's will, and among whose non-delegable functions is that of electing the members. of the Board of Directors. On the other hand, the Board of Directors will be made up of the number of members established in the statutes, who must all be mutual members, although there may be protectors who are part of the Board, according to the provisions of the statutes, without it being possible for them to reach have effective control over it. The Board of Directors will necessarily contain a President and a Secretary, and will collectively hold the power of legal representation of the mutual society, being able to appoint proxies (voluntary representation).

Another corporate body that Madrid law requires to provide in the statutes is the Management, which may be performed by one or more people.