The Spanish Property Insurance Cartel

20 Pages Posted: 14 Dec 2011

Date Written: December 13, 2011


Inherent Defects Insurance (IDI) for new housing buildings is mandatory in Spain since 2000. The instauration of this legal requirement prompted an upsurge in the IDI market in the following years. Being confronted with competition, major insurance carriers active in that market promoted a cartel, which involved also IDI reinsurers. This article examines the features of the Spanish IDI cartel, uncovered by the National Competition Commission (NCC) in 2009. The companies involved in the cartel were punished with the largest fine ever imposed by competition authorities in Spain (over 120 million €). This article describes how the cartel was organized and operated and underlines reinsurer’s key role in assuring and propagating the effectiveness of the minimum price agreement all over the market.

It also critically analyzes the assessment of the cartel by the Spanish NCC and how it dealt with the arguments submitted by the firms to defend their behavior.

Keywords: property insurance, reinsurance, cartel, inherent defects insurance

JEL Classification: G22, K12, K14, K21, L41

Suggested Citation

Marcos, Francisco, The Spanish Property Insurance Cartel (December 13, 2011). Available at SSRN: or

Francisco Marcos (Contact Author)

IE Law School ( email )

Castellón de la Plana 8
Madrid, Madrid 28006

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