With Law 238/2021 (European Law), published in the Official Gazette on 17 January 2022 and entered into force on 1 February 2022, introduced several amendments to the Code of Private Insurance ("CPI"). These amendments implement EU Directive 2019/2177 (the "Directive"), which amended the Solvency II Directive (Directive 2009/138/EC), on the taking-up and pursuit of the business of insurance and reinsurance. The regulatory action at European level - and the consequent national one - has been triggered by the steady increase in cross-border insurance business, carried out under the freedom to provide services (FoS) or the freedom of establishment under the single authorisation and home country control principles. This makes it necessary to ensure greater supervisory convergence between the Member States and to improve the consistent application of EU law in case of cross-border activity. For this purpose, information exchange and cooperation between supervisory authorities of the member States and EIOPA shall be strengthened, and specific notification requirements for national authorities shall be introduced. Undertakings with Head Office in Italy To obtain authorisation to carry on insurance or reinsurance business, undertakings with their head office in Italy must submit to IVASS a scheme of operations, containing a series of information regarding the operational characteristics of the undertaking. With the implementation of the Directive, it has now been provided that, if the scheme of operations indicates that a "significant" part of the business of the Italian company will be carried on in another Member State (under FoS or freedom of establishment) and that such business is potentially significant for the market of the host Member State, IVASS shall inform EIOPA and the supervisory authority of the host Member State providing sufficient detail (Article 14-bis paragraph 2-bis CPI for insurance business and Article 59 paragraph 2-bis CPI for reinsurance business). The "significance" of the cross-border activity shall be be assessed, according to the Directive: (i) in terms of annual gross written premiums subscribed in the host Member State compared to the total annual gross written premiums of the insurance undertaking, but also (ii) in terms of impact on the policyholder protection in the host Member State and (iii) in terms of impact of the branch or activity of the insurance undertaking concerned on the market of the host Member State in terms of freedom to provide services. The collaboration between supervisory Authorities is foreseen not only at the time of the access to activity of insurance, but also in the course of business, if a crisis situation is identified. If, during the supervisory activity, IVASS identifies a deterioration in the financial conditions of Italian undertakings pursuing business in the EU under the FoS or establishment regime, or other risks that may have a cross-border effect, IVASS shall inform EIOPA and the supervisory authority of the host Member State providing sufficient detail (Article 192, paragraph 4-bis CPI). UE Undertakings Operating in Italy The exchange of information between authorities also applies in reverse, from the authority of the host country to that of the home country. In fact, it is foreseen that if there is reason to believe that an EU undertaking carrying out relevant activities in Italy raises serious concerns in respect to consumer protection, IVASS will inform the supervisory authority of the home Member State. If a joint solution between IVASS and the home authority cannot be reached, IVASS may refer the matter to EIOPA and request its assistance (Article 193.1-ter CPI for insurance undertakings and Article 195-bis.1b for reinsurance undertakings). Collabortation Platforms The Directive provides that, in the event that the cross-border activity carried out by an undertaking raises concerns due to the possible negative effects on policyholders and third parties (e.g. following the notification of the deterioration of the financial conditions which, as seen above, is sent by the local supervisory authority), EIOPA may set up and coordinate a cooperation platform to enhance the exchange of information and improve the collaboration between the supervisory authorities of the home Member State and those of the host Member State. From a domestic point of view, a new Article 208-quater CPI has been introduced, which provides that (i) IVASS, upon request of EIOPA, shall promptly provide all the information necessary to allow the proper functioning of the collaboration platforms; and that (ii) IVASS itself may request the creation of collaboration platforms with the supervisory authorities of other Member States or otherwise join existing platforms. Internal Model One final amendment does not necessarily relate to cross-border business, but nevertheless addresses the need for European-wide insurance system resilience and "vertical" supervisory coordination. Solvency II provides, in line with the risk-based approach to the Solvency Capital Requirement, that in specific circumstances insurance and reinsurance undertakings and groups may use internal models to calculate the requirement, instead of the standard formula. It has now been provided that, if a company requests authorisation to use or modify an internal model, IVASS must notify EIOPA, and may request technical assistance from the European authority with respect to the decision on the application (Article 46-bis paragraph 5-bis, and 207-octies CPI for the case of internal group model). * * * The new rules will further strengthen the cooperation between national authorities in the single market in insurance, as well as the role of EIOPA in connecting and aligning supervisory arrangements. Authorisation, supervision and enforcement decisions are and will remain the responsibility of the home Member State authority, but companies ative in more than one European country should expect a greater flow of information between local authorities, especially if their business in one Member State raises critical issues with potential detrimental effects on consumers. | 
