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02 October 2007
Between July and September 2007 the Istituto per la vigilanza sulle assicurazioni private e di interesse collettivo (ISVAP), the Italian regulatory body which has authority over insurance companies, insurance intermediaries and the domestic insurance market, published six draft regulations implementing the recently enacted Insurance Code, dealing with:
The consultation period for the complaints-handling proposals has now ended; the other consultations will end shortly.
The regulation on complaints handling applies to both domestic and foreign insurers, including those offering insurance services under EU freedom of establishment or freedom of services rules, but does not have a significant impact on the existing legal framework set out in ISVAP Circular 518/D of November 21 2003.
The most significant change clarifies that insurers are required to establish internal policies which ensure that the natural or legal person in charge of handling complaints considers such complaints impartially and has no conflicts of interest.
Forms for notifying ISVAP of complaints and the relevant facts are attached to the draft.
In addition to its general and concluding provisions, the regulation on classification of risks sets out instructions for the classification of risks within life and non-life classes of insurance (Section 2).
The general provisions contain a list of uninsurable risks, including certain financial warranties and losses which arise when corporate entities accept responsibility for penalties levied against an individual (in the event that the entity in question waives the right to take action in recourse against the individual).
Section 2 clarifies the proper classification for, among other things, serious illness and long-term care coverage, private mortgage insurance and first demand insurance guarantees.
The regulation does not apply to EU insurers which have permission to establish a branch office in Italy under passporting rules.
EU Directives 2002/12/EC and 2002/13/EC on solvency margin requirements for life and non-life insurance undertakings were implemented in Italy in 2003; ISVAP Regulations 2322/2004 and 2415/2006 were subsequently issued on the same subject.
The aim of the new regulation, which almost entirely repeats the provisions of the two previous regulations, is to improve policyholder protection and strengthen the measures for preventing insolvency.
The regulation applies only to domestic insurers and branch offices of non-EU insurers.
The main aim of the book-keeping regulation is to consolidate the existing provisions and provide clarifications. It sets out a complete list of books for life and non-life insurance activity respectively. It also provides clarification on where and for how long insurance documents must be stored.
In line with previous regulations, specific provisions apply to firms providing motor insurance and reinsurance services.
Branch offices of EU insurers established in Italy are exempt from the regulation.
The regulation on compulsory winding-up procedures for insurance undertakings approaches the issue in innovative terms and in accordance with the recently enacted reform of Italy's insolvency legislation.
The regulation extends the responsibility of the relevant insolvency authorities; prior authorization from ISVAP is required only in connection with major transactions. This change is intended to expedite the liquidation process for insurance undertakings.
The regulation does not apply to branch offices of EU insurers.
In accordance with Article 308 of the Insurance Code, the regulation on the use and abuse of the term 'insurance' and related terms clarifies which entities are entitled to use words such as 'insurance', 'reinsurance', 'insurance company' and 'insurance intermediary' in their company names and, more generally, in their communications with the public.
The aim of the regulation, which distinguishes between restricted and generally permitted uses of such terms, is to prevent fraud and give ISVAP greater supervisory control over the insurance market.
For further information on this topic please contact David Maria Marino at Giuffrè Scorcelli Rosa & Partners by telephone (+39 02 7639 0744) or by fax (+39 0276 390 681) or by email (firstname.lastname@example.org).
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