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IVASS Oder no. 97 of August 4, 2020: the amendments to Regulation no. 40/2018 on insurance and reinsurance distribution


On August 4th, the Italian Insurance Market Supervisor (IVASS) has partially amended the insurance distribution regulation by Order no. 97/2020. The entire Order will came into force on 31 March 2021, except for some provisions whose entry into force is deferred until 1 January 2022 and 31 March 2022.    

The Order concerns a number of secondary legislations issued by IVASS, including Regulation no. 40 of 2018 on insurance and reinsurance distribution. The Supervisor aimed at rationalizing and simplifying the obligations on insurance distributors, as well as at increasing the level of policyholders’ protection. 

A first area of intervention covered horizontal collaborations between distributors of insurance products. One of the most significant innovations is the provision of the obligation to notify the insurance companies the signing of a horizontal collaboration agreement, in order to allow the latter to have more insight into the supply chain of those who distribute their products. 

With the aim of further simplifying the content of the information provided to the clients, a second important area of intervention concerned the pre-contractual information. On this regard, the content of Annex 3 has been reworded to include all information of a "static" nature that does not vary in the event of the conclusion of several insurance contracts with the same policyholder. Consequently, Annexes 4 and 4-bis have also been amended in order to include all information of a "dynamic" nature, i.e. those that varies for each individual contract signed. 

IVASS's reform also concerned the process of evaluating the policyholder’s demands and needs. More specifically, the new paragraph 4-bis of Article 58 stipulates the obligation to provide the client with a specific declaration where the distributor certifies that the product meets the customer’s needs. In order to strengthen the policyholders’ protection, the rules that allowed the sale of an insurance product that does not meet the policyholders’ needs, as well as those providing that it was not possible to ascertain the policy’s  adequacy due to the refusal of the customer to provide the requested information, will also cease to apply.

The changes also affected the sale of insurance products combined with an ancillary product/service other than a policy. A new provision (art. 59-bis) aims at identifying the additional information that must be provided to the policyholder in the case of sale of ancillary products, such as an adequate description of the different components of the package, separate evidence of costs and charges relating to each component, as well as how the structure of the offer can affect the risks or insurance coverage. 

With regard to IBIPs (insurance investment products), another goal of the Supervisor has been to allow an higher level of disclosure in favor of policyholders in accordance with EU Regulation 2017/565. On this regard, the new article 68-ter provides for specific disclosure obligations about the nature, risks, costs and charges related to the purchase of IBIPs. 
A further news concerning insurance investment products is the possibility, under certain conditions, for intermediaries and insurance companies to pay or receive incentives aimed at increasing the quality of the insurance distribution activity, while not affecting the fulfilment of the obligation to act honestly, fairly and professionally in the best interest of the policyholder.

Still with reference to IBIPs, it is important to mention the new rules concerning the assessment of adequacy and appropriateness in the case of distribution both with and without advice. In relation to products other than non-complex ones according to the Delegated Regulation (EU) 2017/2359 (i.e. those that guarantee the recovery of the premiums paid), a mandatory sale with advice has been provided, which remains optional for traditional products. For such sales with advice, the information to be requested for the assessment of adequacy have also been specified in detail (art. 68-novies). The obligation to evaluate the demands and needs remains, subject to some differences, even in the case of sales without advice.

As anticipated, companies and intermediaries will have to comply with the provisions of IVASS Oder n. 97/2020 by 31 March 2021.


Portrait of Laura Opilio
Laura Opilio
Portrait of Nicolò  d'Elia
Nicolò d'Elia
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Roberto Plutino