International insurance programmes
A single policy does not cover a group with subsidiaries in several countries. What covers a group is an architecture: one parent policy and as many local policies as jurisdictions require.
What it is
An international programme solves a problem that looks administrative and is not: insurance is not a global contract, it is a contract governed by the law of the place where the risk is located. That location determines which rules apply, where premium taxes fall due, and whether an insurer may write there at all. Which is why a single policy bought from head office stops working the moment there are subsidiaries with assets, employees or liabilities in other countries.
The standard structure answers that on two levels. A master policy, bought by the parent, setting the group's wording and limit. And locally admitted policies, issued in each country by an insurer authorised there, giving regulatory compliance and allowing claims and taxes to be settled locally. Between the two sit the clauses that stop the differences from becoming a gap.
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At a glance
- Structure
- Master + local
- Bridging clauses
- DIC and DIL
- Framework in Spain
- LOSSEAR
- Broker registered with the DGSFP
- J0140
An international programme exists not because centralising is convenient, but because insurance is not a global contract. It is a contract governed by the law of the place where the risk is located, and that location decides three things: which rules apply, where premium taxes fall due, and whether an insurer is authorised to write there.
In Spain the framework is Law 20/2015 on the organisation, supervision and solvency of insurers and reinsurers, and within the European Economic Area the freedom of services regime also applies. Outside it, each jurisdiction has its own rules, and in a number of them non-admitted insurance is restricted or prohibited.
The gaps are not in the sections, they are between the policies
The standard architecture combines a master policy bought by the parent, setting the group's wording and limit, with locally admitted policies issued in each country by an insurer authorised there.
The trouble appears at the seam. The local policy is issued to its own market's standard, usually narrower than the master's, and with a sum sized for that subsidiary's operations. If nobody closes that difference, the subsidiary is covered at its country's level even though the group bought far more. Two clauses exist for that:
- DIC, difference in conditions: raises local cover to the master wording.
- DIL, difference in limits: raises the local sum to the master limit.
A verifiable example of why this matters sits in a neighbouring class: under compulsory motor insurance, where the accident occurs in another EEA state the limits of that state apply, unless the Spanish ones are higher. The same vehicle, different cover depending on where the accident happens. We set it out in fleet insurance.
The most frequent gap: growing by buying
In groups expanding through acquisition, the new subsidiary arrives with its own insurance — or none — and with renewal dates that do not line up with the programme. If the contract does not provide for automatic inclusion of newly acquired companies up to an agreed threshold, that company stays outside until the next renewal. It is a clause that costs little to negotiate when the programme is designed and a great deal to add once the deal has closed.
Why through a broker
As a brokerage registered with the Spanish insurance regulator, the Dirección General de Seguros y Fondos de Pensiones, under reference J0140, New Brokers acts on the client's mandate, not on any insurer's behalf.
In an international programme the most valuable work is the least visible: building the single picture of companies, assets, limits and renewal dates by country. In mid-sized groups that picture does not exist until it is built, and without it nothing can be designed and no missing subsidiary can be spotted. After that, coordinating issuance and auditing periodically is what keeps the programme from degrading without anyone noticing.
What is covered
Group master policy
The contract bought by the parent that sets the reference wording, the group's aggregate limit and the common cover policy.
Locally admitted policies
Those issued in each country by an insurer authorised there, giving regulatory compliance and allowing claims and taxes to be settled at destination.
DIC clause, difference in conditions
Raises the local policy's cover to the master wording where the local one is narrower. Without it, the subsidiary is covered to the local standard, not the group's.
DIL clause, difference in limits
Does the same for the limit: where the local policy carries a lower sum, the master responds for the difference up to its own limit.
Tax and premium allocation
The split of premium between countries according to the risk located in each, which is what allows premium tax to be settled where it falls due.
Centralised claims handling
A single point of contact for the group and common procedures, with local payment where the rules require the claim to be paid locally.
Cover for newly acquired subsidiaries
Automatic inclusion of companies acquired during the policy period, up to an agreed threshold, without reopening the whole programme.
Risks in countries without local issuance
How to treat jurisdictions where there is no local policy, or none is worth having, handled from the master with whatever safeguards each country allows.
Consolidated information and reporting
The single picture of cover, limits, renewal dates and claims by country, which in a mid-sized group rarely exists before the programme is built.
Programme audit and gap control
The periodic review that catches subsidiaries outside the programme, lapsed local cover, or limits that have fallen short.
Limits and deductible
| Element | Function |
|---|---|
| Master policy | Sets the group's wording and limit |
| Locally admitted policies | Give regulatory compliance in each country |
| DIC clause | Raises the local to the master wording |
| DIL clause | Raises the local to the master limit |
| Where the risk is located | Determines law, taxes and admissibility |
This table describes the usual architecture of an international programme, not a single legal regime: there is no global insurance statute. In Spain the framework is Law 20/2015 on the organisation, supervision and solvency of insurers and reinsurers, and within the European Economic Area the freedom of services regime also applies. Local issuance requirements, premium taxation and admissibility vary country by country and must be checked case by case. Cover and limits are governed by the specific conditions of each contract.
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Go to the client areaWhat is not covered
In an international programme the gaps are rarely in the sections themselves, but in the seams between the parent policy and the local ones.
Subsidiaries not declared in the programme, which fall outside even where the parent believes they are included.
Countries whose rules prohibit non-admitted insurance and where no local policy has been issued.
Paying a subsidiary's claim from the master policy where the jurisdiction requires it to be paid locally.
Differences in wording against the local policy where no DIC clause has been bought.
The excess over the local limit where no DIL clause has been bought.
Premium taxes not allocated according to the risk located in each country — not a loss event, but a contingency all the same.
Penalties for local regulatory breach, which no policy covers.
Risks subject to each country's own compulsory regimes, which follow their own rules regardless of the programme.
When you will be asked for it
A subsidiary covered to the local standard, not the group's
A subsidiary's local policy has a narrower wording than the group master, and the loss falls precisely on a section the local one does not include.
What it means
Without a DIC clause, the subsidiary is covered to its country's standard and not to the group's, even though the parent bought broad cover. The gap is in neither policy: it is between them.
A local limit that runs out on a large loss
The sum bought locally is enough for day-to-day operations but is exhausted by a significant loss.
What it means
The DIL clause is what makes the master respond for the difference up to its own limit. Without it, the excess falls on the subsidiary, regardless of the much higher limit the group had in place.
Acquiring a company mid-year
The group buys a company in another country whose existing insurance matches the programme in neither wording nor renewal date.
What it means
If the programme has no automatic inclusion up to a threshold, the new subsidiary stays outside until the next renewal. It is the most frequent gap in groups that grow by acquisition.
How it is arranged
Mapping companies, assets and jurisdictions
We establish which companies make up the group, what assets, employees and liabilities each has and in which countries, because that is where each risk is located.
Inventory of existing local cover
We collect the policies each subsidiary already holds with their limits, wordings and renewal dates. In mid-sized groups that picture does not exist until it is built.
Designing the architecture and the bridging clauses
We define what sits in the master, where locally admitted cover is required, and which differences in wording and limit need closing with DIC and DIL.
Placement, coordinated issuance and periodic audit
We coordinate issuance in each country, align renewal dates, and review the programme regularly to catch subsidiaries outside it, lapsed cover or short limits.
Covers that work alongside this one
D&O — Directors and officers liability
Directors of subsidiaries answer under the law of their own jurisdiction, with liability standards that can differ sharply from Spain's.
General, employers' and product liability
Liability for an exported product is judged where the damage occurs, not where it was made, and the regimes differ widely between countries.
Property damage and business interruption
Each subsidiary's assets are insured where they sit, and local compulsory regimes for extraordinary risks operate there too.
Transport and cargo
Each mode and country applies conventions with different ceilings, which means looking leg by leg on a multimodal movement.
Fleets and vehicle transport
Compulsory motor limits change according to the state where the accident happens, even within the European Economic Area.
Frequently asked questions
Isn't one global policy enough for the whole group?
No, and the reason is regulatory rather than commercial. Insurance is governed by the law of the place where the risk is located, and that location determines which rules apply, where taxes fall due, and whether an insurer may write there. In a number of countries non-admitted insurance — covering a local risk from a foreign policy — is restricted or prohibited. That is why the standard structure combines a master policy with locally admitted ones.
What exactly are DIC and DIL clauses?
They are the programme's two seams. DIC, difference in conditions, raises the local policy's cover to the master wording where the local one is narrower. DIL, difference in limits, does the same for the sum insured: where the local policy carries a lower limit, the master responds for the difference up to its own. Without them, each subsidiary is covered to its country's standard even though the group bought far more.
Where are premium taxes paid?
Where the risk is located, not where the policy is signed. Which is why allocating premium between countries is not an accounting formality but part of designing the programme: a badly allocated premium creates a tax contingency at destination that no policy covers. It is one reason local issuance cannot always be replaced by cover written from the parent.
When does an international programme make sense?
When the group has subsidiaries with their own assets, employees or liabilities in more than one jurisdiction, and particularly where it grows by acquisition. Below that, coordinating local policies usually suffices. The clearest signal that one is needed is being unable to say, without calling each subsidiary, what limit each holds and when it renews.
What about a subsidiary we buy mid-year?
It depends on whether the programme provides for automatic inclusion of newly acquired companies up to an agreed threshold. Where it does not, the new subsidiary keeps its previous insurance — or none — until the next renewal, and that is the most frequent gap in groups that grow by buying. The clause is worth negotiating when the programme is designed, not when the deal lands.
What information do you need to prepare a proposal?
The group structure with the shareholding in each subsidiary, the location of assets and employees by country, each company's current policies with limits and renewal dates, turnover by country, and the consolidated claims history. If corporate transactions are under way, their expected timetable too.
This information is for guidance only and is not binding. Covers, limits and exclusions are governed in all cases by the specific terms of each policy. New Brokers Correduría de Seguros, S.L., registered with the DGSFP under reference J0140.