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14 February 2012
On December 6 2011 the Italian insurance regulator, ISVAP, issued Note 2946, which supplements Article 48 of its Regulation 5/2006. The new note concerns the rules of conduct for insurance intermediaries. According to Article 1 of the note, a person or entity is prevented from both brokering a policy and being the beneficiary or payee of the related insurance contract, whether individual or collective (for further details please see "New conflict of interest provision hits PPI"). The new provision is to apply from April 2 2012.
Legislative Decree 201/2011(1) has identified a new area of unfair commercial practice in the field of insurance. The decree clarifies that a bank, credit institution or intermediary thereof acts unfairly where it requires customers to purchase a payment protection insurance policy, brokered by the same entity, as a condition of entering into a financing agreement (eg, a loan agreement).
Unfair commercial practices are punishable by fines of between €5,000 to €500,000 in accordance with the relevant provisions of the Consumer Code. In a report issued on January 9 2012 the Competition Authority focuses on the need to ensure greater quality and transparency, with particular reference to costs. In particular, consumers should be made aware of costs incurred in the financing contracts, as well as those under the relevant policy, so as to increase competition and reduce intermediation costs.
In the very recent Liberalisation Decree (which is now to be approved by Parliament), an obligation has been introduced (under Article 29) for banks, financial institutions and financial intermediaries that require a life insurance contract to be signed before a mortgage is disbursed to submit at least two estimates from two different insurance groups to the customer.
For further information on this topic please contact David Marino or Mauro Carretta at DLA Piper Italy by telephone (+39 02 80 61 81), fax (+39 02 80 61 82 01) or email (firstname.lastname@example.org or email@example.com).
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