On 31 March 2021 came into force IVASS Order No. 97/2020 (the "Order 97"), which made important amendments to, inter alia, IVASS Regulation No. 40 of 2018 (the "Regulation 40") on insurance and reinsurance distribution.
A little less than three months after its entry into force, however, the Lazio Regional Administrative Court ("Tar Lazio") – upholding the appeal of the National Agents' Union (SNA) - annulled some relevant innovations that had been introduced by Order 97.
Specifically, with judgment no. 07549 issued on 23 June 2021, the Lazio Regional Administrative Court ruled on the following aspects.
1. Communication and publication of the existence of horizontal collaborations
First of all, the administrative court ordered the annulment of (i) Article 42(4-bis) of Regulation 40, which required intermediaries to notify their principal insurance companies of the signing of any horizontal collaboration agreement with other intermediaries, and (ii) Article 58(2) of Regulation 40, insofar as it requires distributors to make available at their premises or on their website the list of horizontal collaborations in place.
The reasons for the annulment are both formal and substantial: from a formal point of view, IVASS did not properly submit the amendments to the stakeholders as part of the public consultation; from a substantial point of view, the obligation is not supported by the primary legislation and constitutes an unnecessary bureaucratic burden.
2. Declaration of consistency of the product
Secondly, the Tar Lazio annulled Article 58(4-bis) of Regulation 40, which required distributors to provide a statement certifying that the product meets the customer's demands and needs.
In this regard, the administrative Court noted that the intermediaries are already obliged (under other paragraphs of the same Article 58) to offer insurance contracts consistent with the customers' needs, and therefore considered that the handover of the above-mentioned statement is a further bureaucratic requirement that is neither useful nor necessary.
The ruling at issue seems to require companies and intermediaries – who had recently modified their distribution processes to be compliant with Order 97 – to weight the opportunity to maintain the current processes "as they are", whilst waiting for the outcome of possible appeal, or to adapt them immediately to the regulatory framework resulting from the annulment of the above provisions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
