The Portuguese Government has announced its intention to establish a Fund for Natural and Seismic Catastrophes (Fundo de Catástrofes Naturais e Sísmicas), coupled with a mandatory catastrophe insurance for dwellings and business premises. The measure originates in the Transformation, Recovery and Resilience Plan (PTRR), and is referenced again in the 2027 State Budget Report, which signals a forthcoming revision of the insurance regime applicable to catastrophe and earthquake situations.
Under the model announced, the fund would operate as a public-private risk-sharing mechanism, carrying an initial allocation of €20 million, with a solidarity mechanism to support lower-income households in meeting the premium. The funding model follows a proposal developed by the ASF (Autoridade de Supervisão de Seguros e Fundos de Pensões), under which a new parafiscal charge levied on insurance premiums from the mandatory insurance would serve as a regular source of financing for the fund.
We would stress that, at this stage, this remains speculation. No draft decree-law has been published, no public-consultation text is available, and the operative rules including the scope of the mandatory cover, the basis and rate of any contribution are not yet known. The responsible minister has indicated only that the regulating decree-law is expected to enter into force during 2027.
Sovos is monitoring the progress of this measure and will issue a further update as soon as any draft legislative text is published.
