The classification of index and unit linked policies as insurance or financial products continues to be debated in Italy, notwithstanding the Supreme Court’s decision no. 6061 of 18 April 2012.
The issue arises from the enactment of Law no. 262/2005 – entered into force on 25 January 2007 -, which extended the application of the Italian Financial Act over “financial products issued by insurance companies“, formerly governed by the Insurance Code. Based on the principle of tempus regit actum, most of the Italian Courts ruled that linked policies issued before 2007 could only be governed by the Insurance Code (see decisions by the Courts of Treviso 13 July 2005, Lecce 15 January 2007, Rome 20 march 2009, Naples 5 June 2009). According to some others, Law no. 262/2005 shed light on the financial nature of such products, subject as such to the Italian Financial Act independently on the time when they have been issued (see decisions by Courts of Venice 24 June 2010, Milan 23 July 2010, Parma 10 August 2010).
The Supreme Court [see our post of 9 April 2014] unfortunately failed to take a clear position in this debate and preferred a case by case approach, asking Italian Judges to apply a sort of risk factor test, whereby the disputed policy will be classified as insurance product only if the demographic risk taken by insurance companies prevails over the financial risk assumed by consumers. Continue Reading
On 5 June 2017, in response to the Congressional efforts to “repeal and replace” the Affordable Care Act (the ACA), the New York Department of Financial Services (NYDFS) issued a press release entitled “Governor Cuomo Announces Aggressive Actions to Protect Access to Quality, Affordable Health Care for All New Yorkers” (the Press Release), which outlines the “aggressive actions” Governor Andrew M. Cuomo intends to take to “make certain that no matter what happens in Congress, the people of New York will not have to worry about losing access to the quality medical care they need and deserve.”
The Press Release outlines the types of actions that will affect how health insurers operate in New York even if Congress passes a bill to repeal significant requirements of the ACA. It also provides that the “new first-in-the-nation measures will ensure that essential health services are protected and covered for all New Yorkers regardless of efforts at the federal level to strip millions of Americans of their healthcare.”
To continue reading, click here.
The Hogan Lovells’ Corporate Insurance Newsletter for May has been published. This provides a round-up of UK, EU and international regulatory developments relevant to UK based insurance market participants. In this issue, amongst other items, we cover:
- The FCA’s final rules on implementing information prompts in the annuity market
- The FCA’s consultation on proposed guidance on its approach to reviewing Part VII transfers of insurance business
- Updates on PRIIPS Regulation from the FCA, PRA and European Commission
Two years after the Insurance and Bonding Companies Law was enacted, surety insurance is finally starting to take effect in Mexico and coexist with other institutions that integrate the bonding sector.
In Mexico, surety insurance is regulated as a mechanism to guarantee obligations, under which an insurer must indemnify the insured (ie, the beneficiary) in case of a breach of the policyholder’s legal or contractual obligations.
Click here to read the complete article.
On 16 May 2017 the CIRC and the Hong Kong Office of the Commissioner of Insurance (“OCI“) entered into a framework agreement aimed at mutual recognition of solvency regimes between Mainland China and Hong Kong.
China adopted a risk-based capital regime, C-ROSS, with effect from 1 January 2016. In Hong Kong, the consultation on a risk-based capital regime is ongoing (with a first quantitative exercise expected to occur later this year), and it is likely that such a regime will be introduced in a few years’ time. Continue Reading
Background to the issuing of the Polish regulator’s position
Based on the new regulation in the Polish insurance market that entered into force on 1 January 2016, the general terms and conditions of insurance (“GTC“) as well as other standard contracts must be published by insurers on their websites. The Polish regulator (“KNF“) noticed, however, that the fulfilment of this obligation differed among insurers. Consequently, the KNF noted the need to unify the practice in these terms and recently issued its position concerning insurance companies publishing their standard contracts on their websites. The document is available here in the Polish language version only. Continue Reading
On Monday 15 May 2017 the Financial Conduct Authority (FCA) published a consultation paper on new proposed guidance on its approach to reviewing applications to transfer insurance business under Part VII of the Financial Services and Markets Act 2000 (FSMA) (a Part VII Transfer). Comments are requested by 15 August 2017.
In accordance with the terms of a Memorandum of Understanding between the FCA and Prudential Regulation Authority (PRA), the PRA takes the lead on managing the process of a Part VII Transfer and has responsibility for approving the appointment of an independent expert, approving notices, issuing the necessary certificates and corresponding with overseas regulators if necessary. The FCA has an active role in the process and must be consulted with by the PRA at all stages. Both regulators may provide reports to the Court and attend the final Court hearing. Continue Reading
There is an emergent divergence of opinion between trade body Insurance Europe and regulators. Will calls for further regulation create more substantial fissures?
Insurance Europe, a trade body comprised of insurance associations representing approximately 95% of European premium insurance income, recently issued a press release reaffirming its stance on EU proposals for harmonising recovery and resolution frameworks for insurers. Insurance Europe argues that proposals for substantially changing recovery and resolution rules for insurers are unnecessary. Rather, it asserts, current safeguards provided under Solvency II (a European framework governing capital adequacy and risk reduction for insurers) are sufficient. Insurance Europe’s announcement was borne out of a discussion paper from the European Insurance and Occupational Pensions Authority (“EIOPA”), in which it considered harmonising national recovery and resolution frameworks for insurers in the EU. EIOPA suggested “minimised harmonisation” whereby EU member states would be enabled to implement new regulatory measures to their respective insurance markets. Click here for more details of the EIOPA proposals and Insurance Europe’s response.
The Hong Kong Financial Services Development Council, an advisory body to the government, has recently released a report on the Hong Kong insurance sector. Its key recommendations are:
- Boosting the Hong Kong reinsurance market, including by negotiating preferential treatment for Hong Kong reinsurers under C-ROSS, China’s risk-based capital regime, and by extending tax incentives for offshore reinsurance to life reinsurance and to direct insurers conducting reinsurance business.
- Turning Hong Kong into a leading marine insurance market, including by negotiating preferential treatment for Hong Kong insurers under C-ROSS, creating tax incentives for marine insurance and marketing Hong Kong as a marine insurance hub.
- Establishing Hong Kong as a leading domicile for captives through regulatory guidance on captive management and operations, proactive support by the insurance regulator and enhanced marketing. The development of the Hong Kong captive industry has been a focus for some time. Significant regulatory and tax concessions for captives have been in place for a number of years, and in 2012 the Chinese central government encouraged Mainland companies to set up their captive insurers in Hong Kong. However, despite those measures, only three captives have been established in Hong Kong to date. As the report correctly identifies, a critical mass will typically have to be reached in order for a jurisdiction to become a hub for captives. It is doubtful whether that critical mass can be achieved in Hong Kong without the Chinese government taking active steps to promote Hong Kong as a captive hub.
It has been announced that the new Independent Insurance Authority for Hong Kong (“IIA“) will assume its functions on 26 June 2017 (the “Commencement Date“), replacing the Office of the Commissioner of Insurance.
From the Commencement Date, the appointment of “key persons” (such as officers responsible for risk management, compliance, financial control, internal audit and the actuarial function of authorised insurers) will be subject to approval by the IIA on the basis of “fit and proper” criteria. The same requirement will apply to new directors of Hong Kong incorporated insurers. The existing approval regime only applies to certain controllers, chief executives and managing directors of authorised insurers. Continue Reading