Marine insurance claims support the implementation of a 20 per cent interest rates in cases of default in payment of claims by insurance companies.
In 2009, the Supreme Court passed a ruling that set a court precedent, stating that although marine insurance is still regulated by the old Commercial Code, it allows ancillary implementation of parts of the Act 50/1980 of Insurance Policies.
Thus, in the absence of clauses in the insurance policy that within the limits of autonomy, regulate the consequences of a default by the company, and given that sections 770, 774 and 805 of the Commercial Code, do not prevent the supplementary application of section 20 of the Act 50/1980, interest rates are to be paid in the event of a default in the delivery of the indemnity.
Section 20 of the Act 50/1980 states that the insurer incurs in default when the indemnity has not been paid within three months of the incident, or the minimum amount of the loss has not been delivered within forty days from the receipt of the declaration of the accident or loss.
The compensation for default involves the payment of the legal interest rate on the indemnity –currently, the legal interest rate is 4%-, plus and additional 50% premium. However, would two years pass since the accident or loss without any without any delivery of an indemnity from the company, the interest rate shall not be less than 20% per annum.
It is now a quite court practice to set as compensation for most insurance defaults the legal interest rate increased in 50% —currently, 6%—; applying a 20% interest rate on the indemnity from the second year since the loss, on.
However, since the New Act 14/2014, of Sea-Going Navigation, its section 406.2 states that the mandatory insurance of recreational vessels shall be ruled by the provisions of the Act 50/1980 of Insurance Policies, being void any agreement to the contrary.
For shipowners, there is glee and delight on it all.