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Italy: Insurance based investment products: Consob simplifies transparency requirements for life insurance undertakings

On 28 June Consob (the Italian supervisory authority on financial markets) launched a public consultation regarding amendments to its Regulation adopted with Resolution No. 11971 of 14 May 1999 (“Consob Regulation on Issuers”) in order to review the pre-contractual information requirements to be met by insurance undertakings when issuing insurance products with financial content (i.e. life insurance products belonging to insurance class III and V).

This consultation follows the recent publication of Legislative Decree No. 68 of 21 May 2018 implementing in Italy Directive (EU) 2016/97 on insurance distribution (the “IDD”) which amended respectively the Italian Insurance Code and the Consolidated Financial Act, by providing specific provisions regarding insurance based investment products (“IBIPs”) both in terms of pre-contractual disclosure requirements and conduct rules.
On the basis of the regulatory framework currently in force in Italy, the requirements on pre-contractual information regarding IBIPs may be summarized as follows:

  • for Classes III and V products insurers are required to publish an offering prospectus prepared in accordance with the Schemes provided by Consob Regulation on Issuers (respectively for unit linked, index linked and capitalization products);
  • for the other IBIPs insurers are required to publish an informative dossier (Fascicolo Informativo) prepared in accordance with the provisions established by IVASS in its Regulation No. 35/2010 (recently subject to amendments).

In addition, for all IBIPs addressed to retail clients (the definition of which coincides with that of “packaged retail and insurance-based investment products” provided by Regulation (EU) No. 1286/2014, hereinafter the “PRIIPs Regulation”) insurance undertakings are obliged to deliver to prospect clients and to file with Consob a standard pre-contractual document containing key information on the product (KID).

Considering the complex legal and regulatory framework briefly outlined above, the need of reviewing the existing information requirements emerged, with the aim of defining a homogeneous regime for all IBIPs, ensuring consistency with the KID for PRIIPs, removing duplications and avoiding conflicting or redundant information, in line with European legislation.

With these amendments to its Regulation on Issuers Consob eliminates the obligation to publish an offering prospectus for classes III and V products and in general repeals the provisions regarding the offer to the public of financial products issued by insurance companies.

On the basis of the new regulatory framework which would be defined, the pre-contractual documentation to be made available to IBIPs prospect policyholders would consist of: (i) the PRIIPs KID, indicating the key information of the product and (ii) the additional pre-contractual information document prepared by IVASS (so called DIP aggiuntivo), containing information on the issuer, as well as further information regarding rights and obligations of the contracting parties.

Although out of the scope of these amendments, Consob also clarified and confirmed that the obligations for insurers and intermediaries regarding the filing with Consob of the KIDs of PRIIPs do not fall within the perimeter of the exemption regime currently provided for certain insurance products with financial content.

The public consultation will close on 27 August 2018. Please click here to download the text of the document (available in Italian only).

We remain at your disposal for any clarification you may need.