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12 June 2012
As part of the recent reform of Italian law, the insurance regulator, ISVAP, has issued various new regulations and draft regulations which will have a significant impact on insurance contracts and the internal structure of insurance companies. This update highlights some of the most noteworthy changes.
Regulation 40/2012, issued on May 3 2012, implements the provision of Article 28(1) of the Legislative Decree of January 24 2012. This established that banks and other financial intermediaries which make payment of a loan conditional on the applicant previously having taken out insurance must supply the applicant with at least two estimates from different insurance groups (for further details please see "Further shake-up on bancassurance and payment protection insurance"). The regulation identifies the minimum required contents of the insurance contract in order to help consumers to compare the offers and find the cheapest insurance available.
These new rules extend to foreign undertakings that perform insurance business in the Italian territory under either the freedom of service or the freedom of establishment regulations.
Regulation 41/2012, issued on May 15 2012, contains significant new amendments on the organisation, powers and procedures of administrative and monitoring bodies with responsibility for insurance companies. The amendments relate specifically to the risks of money laundering and terrorism financing, and are in line with the rules in Regulation 20/2008 on internal controls, risk management, compliance and outsourcing. The new rules apply to:
ISVAP recently opened a public consultation on amendments to its Circular 574D(1) on passive reinsurance. The consultation document(2) states that in light of the new provisions, undertakings must implement internal reinsurance polices which take into account their liquid assets and aim to ensure that proper documentary evidence of reinsurance transactions is kept. The new rules will apply to Italian insurers and reinsurers, foreign reinsurers and branches established in Italy by non-EEA insurers.
ISVAP has also sought public comments on Draft Order 45, which will amend Regulation 36/2011,(3) setting forth guidelines for investments and assets covering technical reserves. The aim of the order is to establish the terms, conditions and limits applicable to insurance undertakings when covering their technical reserves through the use of assets comprising investments in:
The new rules will apply to Italian insurers and reinsurers and to branches established in Italy by non-EEA undertakings.
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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