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01 February 2011
On May 26 2010 ISVAP, Italy's insurance regulator, published Regulation 35/2010 on transparency in respect of insurance products. Among other things, the regulation provided for a supplementary rule to Article 48 of ISVAP's Intermediary Regulation 5/2006, which had a significant impact on the bancassurance market. Article 52 of Regulation 35/2010 introduced a prohibition against the same party being both the beneficiary of insurance coverage and an intermediary of the relevant contract, whether individual or collective. This prohibition applied to an entity acting directly or indirectly, even through group relationships, its own business or the business of other companies in its group,
A number of market players lodged an appeal before the regional administrative court. They sought the removal of the rule on a number of grounds, including:
The provision at issue appeared only in the final version of the regulation, not in the previously published 2007 and 2009 versions, which prevented public consultation.
The court upheld the appeal and quashed Section 52 of Regulation 35/2010 on the grounds that ISVAP had breached Section 191(4) of the code.(1) The other grounds have not been examined.
In response, ISVAP conducted a public consultation in December 2010 and January 2011. It proposed a draft provision which largely confirms the prohibition against acting simultaneously as a beneficiary of insurance coverage and an intermediary of the relevant contract. Comments have been submitted and ISVAP's response is awaited.
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