A GUIDE
FOR INSURANCE BUSINESS
IN ITALY
For insurance companies
operating under the principle of freedom of services in Italy
CONTENTS
PREFACE...............................................................3
I. INSURANCE BUSINESS IN ITALY.........................4
II.DISTRIBUTION OF INSURANCE PRODUCTS......15
III. ANTI-MONEY LAUNDERING...........................20
IV. DATA PRIVACY...............................................23
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PREFACE
The guide is to provide an overview of the
requirements set forth by Italian laws and
regulations as they may apply to a foreign
insurance company which carries out life/non life
business in Italy under the principle of freedom of
services. The subjects treated in the guide are not
covered exhaustively and this guide is intended
only to provide basic information on Italian law
without any reference to particular issues
concerning specific products. The guide is general
and its content is subject to changes. It should be
used for general guidance only. Companies or
individuals seeking to conduct business in Italy
are advised to obtain detailed information on
applicable laws and take professional advice
before making any decisions.
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I. INSURANCE BUSINESS IN
ITALY
1. OPERATIONS UNDER THE PRINCIPLE OF
FREEDOM OF SERVICES
An insurance company being based within the
European Union (EU) but outside of Italy may
operate within the territory of the Italian
Republic either under the principle of freedom to
provide services (FOS) or under the principle of
freedom of establishment (FOE).
The FOE enables insurance companies to pursue
economic activities in a stable and continuous
way in other Member States by establishing
agencies, branches or subsidiaries.
In contrast, the FOS enables insurance companies
to pursue economic activities in other Member
States without establishing agencies, branches or
subsidiaries. The FOS principle provides that an
insurance business conducted in compliance with
the applicable laws of a Member State may be
carried out in the same manner and at the same
conditions in another Member State, provided
that the aforementioned manner and conditions
do not conflict with the compulsory rules of the
Member State where the activity is carried out
under the FOS principle.
Due to the applicable “home country control”
principle, the insurer pursuing business under the
FOS in a foreign Member State remains subject to
the laws and regulations of its home Member
State. However insurance companies operating
under the FOS principle shall comply with the
compulsory rules of Italian law, too. Compulsory
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rules of Italian law are those set forth to protect
“general public interest” and that reflect
fundamental general principles of the Italian
juridical system.
2. SUPERVISORY AUTHORITIES
There are different supervisory authorities in Italy
which are competent for insurance matters and
connected issues. Three important supervisory
authorities are Ivass (“Istituto per la Vigilanza
sulle Assicurazioni”), Consob (“Commissione
Nazionale per le Società e la Borsa”) and Covip
(“Commissione di vigilanza sui fondi pensione”).
which acts in full autonomy in the juridical,
financial,
accounting,
organisation
and
management field. Its supervision aims at
ensuring correct management of insurance and
reinsurance companies as well as correct conduct
of intermediaries and other insurance sector
participants.
As of 1 January 2013, Ivass has replaced the
former supervisory authority called Isvap
(“Istituto per la vigilanza sulle assicurazioni
private e di interesse collettivo”). The new
authority Ivass is under the control of the Bank of
Italy and has have the same supervisory powers
Isvap previously had.
2.1. Ivass
In Italy supervision functions over the insurance
sector are carried out by Ivass, a special national
authority. Ivass is an independent authority
Ivass is competent for issuing binding regulations
for the insurance sector and has, inter alia, the
power to enforce precautionary measures and
sanctions. Ivass shall adopt any regulation
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necessary for a sound and prudent management
of insurance companies and for the transparency
and fairness in the conduct of the supervised
entities. To this end it may also issue appropriate
recommendations or interpretations.
2.2. Consob and Covip
Other authorities having supervisory and
regulatory powers on insurance companies are
Consob and Covip. The regulatory and
supervisory powers granted to Consob mainly
apply to the conclusion and distribution of
contracts related to financial products issued by
insurance companies. With reference to such
products, Consob has supervisory and regulatory
powers in the subject-matters, such as
transparency, correctness of conduct, compliance
with regulations, handling of complaints,
management of conflicts of interest potentially
prejudicial to customers, etc.
Covip is the competent supervisory authority for
pension funds with the task of ensuring the
proper functioning of the pension funds system
and protecting its participants and their savings.
3. GOVERNING LAW
3.1. Italian Laws and Regulations
The local insurance law is mainly governed by the
Insurance Code (Legislative Decree no. 209 of
September 7, 2005, Regulation no. 35 of 26 May
2010) as well as other Regulations issued by
ISVAP, the predecessor of Ivass. In addition,
further requirements can be imposed by general
laws such as e.g. the Italian Civil Code (Codice
Civile, hereafter “C.C”.), Anti-money-laundering
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Laws (Legislative Decree no. 231 of 21 November
2007, hereafter “AML Law”), the Consumer Code
(Legislative Decree no. 206 of 6 September 2005),
the Italian Personal Data Protection Code
(Legislative Decree no. 196 of 30 June 2003,
hereafter “IDPC”) etc.
3. 2. Italian Mandatory Provisions
Nonetheless, should the insurance contract be
governed by the laws of another State, Italian
mandatory provisions shall apply. Such
mandatory provisions shall protect the so called
“general interest” and reflect general principles
of the Italian juridical system. In some cases it
might be also advisable to comply with rules and
regulations which are not considered mandatory
since Italian authorities have the tendency to also
apply such rules and regulations to insurance
companies operating under the FOS principle.
4. CONCLUSION OF THE INSURANCE CONTRACT
The most common way of executing an insurance
contract is to sign a hard copy of same. Distance
insurance contracts may be created as an
electronic file signed by means of a certified
electronic or digital signature. Evidence regarding
insurance contracts shall be provided in writing.
The insurer is obliged to provide a copy of the
insurance policy or any other document executed
by the insurer upon request of the policyholder.
5. FORMAL ASPECTS OF INSURANCE CONTRACTS
5.1. Language
An insurance contract, any document attached to
it as well as the related correspondence shall be
in Italian unless the parties agreed upon another
language.
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5.2. Drafting Criteria
5.3. Unfair Terms
The contract and any other documents provided
by the insurer shall be drafted in a clear and
exhaustive manner. Highlighted characters shall
be used to draft clauses implying forfeitures,
nullity and limitations of coverage or costs to be
borne by the policyholder.
The insurance contract can contain so-called
“unfair terms” which are terms that directly or
indirectly limit or try to limit the counterparty’s
rights. Such unfair terms shall be void, whereas
the rest of the contract shall remain in effect.
Under certain conditions, the unfair term can be
approved by the consumer leading to the
effectiveness of the unfair term. In this case the
unfair term has to be acknowledged in writing by
the consumer in order to be effective and
enforceable. This leads to an obligation to sign
the contract twice: the first signature is to
conclude the insurance contract whereas the
second signature is for the consumer to expressly
acknowledge and approve any unfair terms.
To this extent the supervisory authorities provide
very detailed schemes for all different insurance
products. These schemes aim to ensure that the
customer is properly informed by giving him the
opportunity to evaluate advantages and
disadvantages of an insurance product. The
documents issued by the insurance company
have to be drafted precisely in accordance with
the requirements of such schemes and have to
include all information requested.
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6. INVALIDITY OF CONTRACTS
be annulled. The insurer may request the
annulment of such an insurance contract.
6.1. Void
7. TERMINATION AND WITHDRAWAL
The insurance contract is subject to limitations
and can only be stipulated within a certain legal
framework. For example, if the subject-matter of
the contract conflicts with the law, public order
or prevailing moral principles or mandatory
principles, it is deemed null and void by the law.
The same applies, if the aim of the contract is
impossible to reach, unlawful, not determinable
or lacks certain essential elements.
7.1. Termination
An insurance contract may be regarded as
terminated if the risk no longer exists after the
execution of the insurance contract. However,
the insurance company is entitled to the payment
of the premiums due until the date on which the
insurer is informed thereof.
6.2. Voidable
7.2. Withdrawal by the Insurance Company
If
the
policyholder
provided
incorrect
declarations or omitted to declare information on
essential circumstances for the insurer’s consent
with malice or gross negligence, the contract can
In case of incorrect declarations or omitted
information provided by the policyholder without
malice or gross negligence, the insurance
company may withdraw from the insurance
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contract through a declaration to be sent to the
insured.
8. OBLIGATIONS ARISING PRIOR AND AFTER THE
EXECUTION OF CONTRACT
Also, in case the policyholder informs the insurer
of the existence of circumstances producing an
increase of the insured risk, the insurance
company may, inter alia, withdraw from the
contract.
8.1. Obligations Prior to Execution of Contract
7.3. Withdrawal by the Policyholder
The policyholder may withdraw from the contract
within thirty (30) days from the receipt of the
confirmation of its conclusion. In this case the
insurer has to reimburse any premium already
paid by the policyholder. This does not apply to
contracts having a duration of six (6) months or
less.
The insurance company has to comply with
exhaustive information obligations imposed by
Italian law. However, the scope and content of
such information obligation varies depending on
the specific nature and characteristics of the
insurance product. The underlying concept of
such pre-contractual information obligation is to
inform the customer of all characteristics and
limitations of the particular insurance product
giving him the opportunity to proper evaluate
whether the product fits his needs.
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8.2. Obligations after the Execution of Contract
Also after the conclusion of the contract the
insurance company is exposed to information
obligations. Changes which have impacts on the
insurance policy have to be communicated. For
example, in case of a transfer, merger or
demerger of portfolio the new insurance
company shall inform the policyholder and those
entitled of the respective event in writing. The
relevant communication shall include the
corporate name and the registered office of the
new insurance company, etc.
8.3. Utilisation of Distance Communication
Techniques
An insurance company may provide any
information to the policyholder utilizing distance
communication techniques, provided that a copy
of any communication can be acquired by the
policyholder on a durable medium and that the
policyholder agreed in advance to use such
means of communication.
9. STATUTE OF LIMITATIONS
The limitation period of the right to payment of
the premium is one (1) year from the date the
payment becomes due.
With regard to the limitation periods for claims
arising from the insurance contract, it is
necessary has to distinguish between life
insurance contracts and non-life insurance
contracts. The limitation period of rights arising
from life insurance contracts is ten (10) years,
while the limitation period of the rights arising
from all other types of insurance and reinsurance
contracts is two (2) years.
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10. COMPLAINTS
10.1. Entitled Persons and Entities
All natural and legal persons, consumers and
consumer associations and, in general, anyone
representing collective interests can lodge a
complaint with Ivass against insurance and
reinsurance companies, intermediaries and
technical experts.
10.2. Addressee
Complaints concerning the management of the
contractual relationship shall be directly sent to
the insurance company, without prejudice to the
possibility of bringing such complaints before
Ivass in certain cases.
Ivass can be addressed whenever the violation of
applicable law is suspected, when an insurance
company does not answer a complaint as well as
in case of certain complaints regarding crossborder disputes.
10.3. Claim Handling by Ivass
Ivass may request the entities to provide data,
information or documents. Also, Ivass may
request the insurance company to provide
clarifications directly to the claimant.
In case of complaints against EU-insurance
companies, Ivass shall involve the supervisory
authority of the home Member State and
communicate the outcome of the complaint to
the claimant as soon as Ivass receives the
necessary information from the foreign
supervisory authority.
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10.4. Cross-border Disputes
For the settlement of cross-border disputes, the
claimant having his/her residence in Italy may file
the complaint either with Ivass or directly with
the competent foreign authority by requesting
the activation of the FIN-NET procedure.
10.5. Information
Companies
Obligations
of
Insurance
Each insurance company shall insert, among the
information on the handling of complaints, the
instructions on how to file a complaint with the
company in the pre-contractual information note.
It shall specify the office responsible for
examining complaints and the relevant contact
numbers and addresses. The company shall
further insert information on how to file a
complaint with Ivass or, in case of an insurance
company with registered office in a different
Member State, with the supervisory authority of
its home Member State.
11. ADVERTISEMENT OF INSURANCE PRODUCTS
11.1. General Rules
The advertisement of an insurance product shall
be based on accurate information, comply with
the information note and provide the general
terms of the relevant products. These principles
apply also when advertising is carried out by
intermediaries.
11.2. Obligations
Advertisement shall clearly indicate the name of
the insurance company. Expressions such as
"guarantees", "guaranteed" or similar terms can
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be used only if a guarantee is actually issued by
the insurance company. Returns shall be
advertised net of any charges envisaged by the
procedures for profit sharing. In case the
insurance company intends to advertise the
maximum payable return, the message shall
include the minimum rate of return. If the
advertisement is carried out by intermediaries,
insurance companies shall ensure that the
intermediaries comply with the rules on
transparent and accurate advertisement of
insurance products. Advertisement prepared by
intermediaries is subject to the insurance
company’s prior authorisation.
transparency and accuracy have been violated, it
may suspend advertising on a precautionary
basis. If a violation is ascertained, Ivass shall
prohibit the advertising.
11.3. Powers of Ivass
Ivass may require companies and intermediaries
to send advertising material on a non-systematic
basis. If Ivass suspects that the provisions on
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II. DISTRIBUTION OF INSURANCE
PRODUCTS
2. DISTRIBUTION THROUGH BANK
INTERMEDIARIES/ POSTE ITALIANE
2.1. Requirements
1. INTRODUCTION
The two most common modalities utilized to
distribute insurance products by insurance
companies operating under the FOS principle are
through bank intermediaries as well as through
distance communication techniques. Also,
Insurance companies operating under the FOS
principle may reach agreements with other
intermediaries. However, these agreements may
only be stipulated within a certain legal
framework.
Intermediary banks enrolled with Section D of the
RUI may distribute insurance policies provided
that the policies distributed by the above
intermediaries are exclusively standardized
insurance policies.
Only policies having pre-determined clauses and
guarantees which are not modifiable by the
intermediaries may be distributed. Insurance
companies may allow the intermediary banks to
issue policies directly at their premises as long as
the contractual terms and conditions set forth by
the insurance company cannot be modified. If the
intermediaries can issue the insurance policies
through electronic means, adequate protection
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must be implemented to
interference caused by the
themselves.
prevent any
intermediaries
2.2. Distribution of Non-standardized Insurance
Policies
Non-standardized insurance policies may be
distributed by intermediaries enrolled with
Section D (inter alia, intermediary banks) only
inside the intermediaries’ premises and provided
that the individuals in charge of distribution are
enrolled with Section A of the RUI which is
dedicated to insurance company agents.
2.3. Information Obligation
misleading; the insurance company shall provide
clients and prospective client adequate
information so that they are able to understand
the nature of the product as well as the risks
connected thereto so that they are able to make
an informed decisions.
3.
DISTRIBUTION
THROUGH
COMMUNICATION TECHNIQUES
DISTANCE
3.1. Definition
Distance communication techniques are those
means which may be used for the conclusion of
the contract without the simultaneous physical
presence of the insurance company and the
policyholder.
All of the information, including advertising and
promotional messages provided to clients and
prospective clients shall be correct, clear and not
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3.2. Scope of Application
The insurance company may not market
insurance contracts at distance without the
express prior consent of the policyholder.
Furthermore, the absence of a reply or dissent
may not be construed as consent on the part of
the policyholder.
When promoting and marketing insurance
contracts at distance it is prohibited to use
procedures preventing certain categories of
policyholders from contacting the insurance
company.
Advertising and placement through distance
communications techniques shall not be
performed. If they have already commenced,
they shall cease immediately if the client
expressly dissents thereto. For this purpose, the
client shall be duly informed on the possibility of
refusing such communications.
3.3. Call-center
An insurance company may use a call-center,
provided that, inter alia, the staff is employed by
the insurance company itself or, in case the staff
is not employed by the insurance company, the
latter shall assume full responsibility for their
work. In such cases the insurance company shall
appoint one of its employees as the person in
charge of the coordination and supervision of the
promotion and marketing of insurance contracts
through the call-center.
3.4. Distribution by Telephone
In case of distance sale of insurance contracts by
telephone, the insurance company shall, inter
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alia: a) if the caller is the insurance company,
declare in a clear and unequivocal fashion its
corporate name and the commercial purpose of
the call; b) provide, subject to the consent of the
policyholder, inter alia, the following information:
(i) the identification code or the name of the
person in contact with the policyholder and the
relationship of the latter with the insurance
company; (ii) a description of the main features
of the insurance contract; (iii) the total premium
to be paid by the policyholder to the insurance
company for the insurance contract, including the
taxes paid by the insurance company on behalf of
the policyholder etc.; c) inform the policyholder
that further information is available upon request
and indicate the nature of such additional
information.
3.5. Online Distribution
An EU-insurance company shall ensure that its
web-site contains, inter alia, the following items
in a clear and visible fashion: (a) the insurance
company’s name and registered office in its home
Member State; (b) the insurance company’s
telephone and telefax numbers and email
address; (c) the declaration that the insurance
company is duly authorized to operate in Italy
and the number of enrolment with the register of
insurance companies kept by Ivass.
If the information is provided through a website
and it is not addressed personally to a client, the
following conditions, inter alia, must be met: (i)
the use of the website shall be appropriate in
consideration of the context of the relation with
the client; (ii) the client shall specifically agree
with such modalities for the receipt of the
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information; (iii) the website address and the
access point to information within the website
shall be clearly indicated.
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III. ANTI-MONEY LAUNDERING
1. INTRODUCTION
Insurance companies operating in Italy under the
FOS principle are generally subject to the laws
and regulations of their home country and shall
only comply with the compulsory rules of Italian
law, i.e. those protecting general public interest.
Even though the AML Law is not indicated as a
regulation of general public interest by Ivass on
its website, it should not be fully disregarded.
Since anti-money laundering is a very sensitive
and important matter with a long history it seems
advisable for insurance companies operating
under the FOS principle to at least comply with
the very basic provisions of the AML Law.
2. CUSTOMER DUE DILIGENCE OBLIGATIONS
2.1. Conduction of Customer Due Diligence
A customer due diligence has to be performed in
case a continuous relationship is established, in
case of a transaction whose value is equal to or
higher than € 15.000, if there is a suspicion of
money laundering or terrorist financing as well as
if there are doubts about the veracity or
adequacy of customer identification data
obtained previously.
2.2. Required Activities
The customer and beneficial owner have to be
identified. If a continuous relationship is
established, information about its purpose and
intended nature has to be obtained and the
relationship has to be monitored.
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2.3. Identification of Natural Person
If the natural person is present, identification and
verification shall be performed on the basis of
valid identity documents. Should the natural
person be absent, identification and verification
shall be performed on the basis of additional
documents, data or information and by adopting
supplementary measures. Also, it shall be
ensured that the first payment relating to the
transaction is made through an account in the
customer’s name with a credit institution.
2.4. Identification of Company
The company’s identity shall be verified through
e.g., an excerpt from the companies’ register.
Information necessary to identify and verify the
identity of the company’s representative(s) with
signatory powers shall be verified as well as the
existence of such powers.
2.5. Identification of Beneficial Owner
The beneficial owner’s identification shall be
verified at the same time as the customer’s
identification. Adequate measures shall be
adopted in order to have knowledge of the
control structure.
2.6. Simplified Customer Due Diligence
It is not necessary to conduct customer due
diligence activities, with the exclusion of
reporting suspicious activities, inter alia, if the
customer is subject to the obligations imposed by
the AML Law.
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3. REPORTING OBLIGATIONS
Suspicious transactions suggesting that money
laundering or terrorist financing is being or has
been carried out or attempted must be reported
to the Financial Intelligence Unit. Suspicion may
arise from the characteristics, size or nature of
the transaction or from any other circumstance
ascertained as a result of the activities performed
and taking into account the economic capacity
and the activity the interested person is engaged
in.
The AML Law provides for sanctions which may
vary from fines (from a minimum of € 100 up to €
500.000 or more when the fine is equal to a
percentage of the sum transferred) to
imprisonment.
4. TRAINING AND SANCTIONS
Measures for an adequate training of staff and
collaborators should be adopted to ensure the
correct application of the AML Law.
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IV. DATA PRIVACY
1. INTRODUCTION
It seems advisable to apply at least the basic rules
of the Italian Data Privacy Code (“IDPC”) to
insurance companies operating under the FOS
principle, notwithstanding the applicability of the
“home country principle”.
The competent authority in charge for verifying
compliance with data privacy regulations is the
Data Protection Authority (“Garante per la
Protezione dei Dati Personali”).
2. PROCESSING OF PERSONAL DATA
“Personal data” is any information, including a
personal identification number, through which a
natural person can be identified, even indirectly.
Information referring to legal entities, bodies or
associations is not covered.
Protection includes all operations, carried out
with or without the help of electronic or
automated means, concerning the collection,
recording, organization, keeping, interrogation,
elaboration, modification, selection, retrieval,
comparison,
utilization,
interconnection,
blocking, communication, dissemination, erasure
and destruction of data.
2.1. Consent of Data Subject
As a general rule, the consent of the data subject
is required to process his/her personal data. The
consent shall be deemed effective only if, inter
alia, it is given freely and documented in writing
with regard to a clearly identified processing
operation.
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However, consent is not required while
performing standard business activities, i.e. the
performance of a contract to which the data
subject is party or the fulfilment of specific
requests by the data subject prior to entering into
a contract. Also, the consent of the data subject is
not required for personal data processing
necessary for the execution of an insurance
contract.
2.2. Processing of Sensitive Data
When processing sensitive data further activities
are required. “Sensitive data” is defined as
personal data allowing the disclosure of racial or
ethnic origin, religious, philosophical or other
beliefs, political opinions, membership of parties,
trade unions, associations or organizations of a
religious, philosophical, political or trade-unionist
nature as well as personal data disclosing health
and sex life.
If data processing regards sensitive data, the
consent of the data subject shall be in writing.
Exceptions from that principle are only made in
the presence of prevailing interests.
Also, the Data Protection Authority’s prior
authorization is required. However, the Data
Protection Authority may issue a general
authorization for specific activities or categories
of business allowing the processing of sensitive
data, except for data disclosing sex life.
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2.3. Data Subject’s Rights
-
The data subject is entitled, inter alia, to:
- request to transform the data into an
anonymous form, update, supplement
and delete his/her personal data;
- object, on legitimate grounds, to the
processing of his/her personal data;
- object to the processing of personal data
where processing is carried out for
marketing or commercial purposes.
-
-
the obligatory or voluntary nature of
providing the requested data;
the consequences if data is not provided;
the entities to which the data may be
communicated, or that receive the data in
their capacity as data processors and the
scope of the dissemination of the said
data;
the rights as per Article 7 IDPC;
the identification of the data controller.
2.5. Notification of Data Protection Authority
2.4. Information Obligation before Processing
Personal Data
The person has to be informed in advance, in
writing or verbally, that his/her data will be
processed. The notice shall contain, inter alia:
- the purposes and modalities of the data
processing;
Data controllers are required to notify the Data
Protection Authority when processing higher-risk
categories of data. These include genetic and
biometric data, data processed for the purpose of
analysing or profiling individuals as well as creditrelated information.
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For more information please contact us:
Giovanna Aucone
Partner and Head of the Insurance Department
E.: [email protected]
OFFICES
Milan
Via Sant’Andrea, 3
20121 Milan
T. +39 02 76013359
F. +39 02 760 27478
Rome
Via Lisbona, 11
00198 Rome
T. +39 06 884 1535
F. +39 06 884 2094
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