On 8 June IVASS launched three public consultations on its draft regulations providing for secondary level legislation regarding insurance and reinsurance distribution, pre-contractual transparency requirements to be met in connection with the distribution of insurance products and on administrative sanctions.
Although the Legislative Decree approved by the Italian Government on 16 May aimed at implementing in Italy the IDD has not been published yet in the Italian Official Journal, IVASS decided to accelerate the approval process of the necessary secondary level measures. They will significantly impact the current regulations regarding the activity of insurance undertakings and intermediaries and are to enter into force by 1st October 2018.
The new public consultations launched by IVASS are related to the following regulations:
- Draft Regulation on insurance and reinsurance distribution lays down a new regulatory framework regarding the access to distribution activity and the exercise of such activity by reflecting the provisions set out by the IDD related to – among other things – the new categories of distributors, the conduct rules to be complied with by insurance intermediaries, the professional training to be carried out by distributors, the rules aimed at preventing and managing conflict of interest, as well as the promotion and placement of insurance contracts through distance selling techniques. Moreover, IVASS proposes to increase the level of digitalization during the entire process for the distribution of insurance policies and for the management of the contractual relationship. As a consequence of the approval of the new regulation, the current regulatory provisions applicable to insurance intermediaries mainly included in IVASS Regulation no. 5/2006 and the distance selling of insurance products (IVASS Regulation no. 34/2010) will be amended and replaced accordingly.
- Draft Regulation on transparency, advertising and realization of insurance products which is aimed at reviewing and amending the current regulatory provisions contained in IVASS Regulation no. 35/2010, would provide a standardised base pre-contractual document for each insurance product category that will replace the standard Informative Note (Nota Informativa) as follows:
- the IPID (Insurance Product Information Document) for non-life products,
- the so called Life DIP (Documento Informativo Pre-contrattuale Vita) for life risk insurance products (provided by the Italian Insurance Code as an Italian peculiarity) and
- the KID (Key Information Document) for insurance based investment products as provided by the EU regulations.
In addition, IVASS introduces a supplementary standardized pre-contractual document to be delivered to potential customers together with the base documents, the so called Supplementary DIP (“DIP Aggiuntivo”) aimed at collecting information which is supplementary and complementary with respect to the information contained in the base documents, in order to ensure a more detailed knowledge of the product and to guide the client toward an informed decision on contractual rights and obligations.
Apparently, such Supplementary DIP does not apply to investment policies belonging to class III and V (unit and index-linked policies and with profit products) given that insurers are currently obliged to draft and deliver an Offering Prospectus as per Consob Regulation on Issuers. However, IVASS would expect that in the next future such mandatory requirement might be replaced by the Supplementary DIP.
IVASS also paid particular attention to enhance the rules aimed at protecting contracting parties: specific provisions were introduced for the purposes of reducing dormant policies, facilitating contractual simplification (including enhancement of the digitalization of the insurance market) and facilitating comparability of the conditions in the event of amendments to the original contract.
- Draft Regulation on administrative sanctions defines the new procedure to be followed by IVASS when levying administrative pecuniary and disciplinary sanctions for violations of legal and regulatory provisions from 1st October 2018. The new provisions set out, among other things, the principle of “materiality” of the violation for the purposes of starting the proceeding, which aims at balancing the new system to the actual impact of the violations. It also introduces the possibility of jointly ascertaining specific violations of the same nature made by companies and intermediaries in a certain period of time, as well as stricter maximum amounts for fines, also linked to the turnover of the relevant entity involved and the related calculation criteria.
The public consultations will close on 9 July 2018.
Click here to download the Draft Regulation on insurance and reinsurance distribution, here to download the Draft Regulation on transparency, advertising and realization of products and here to download the Draft Regulation on administrative sanctions (all available in Italian only).