On 31 December 2020, Law Decree No. 183 of 31 December 2020 introducing, among others, specific provisions addressed to UK insurance undertakings in relation to their business and obligations following the end of the transition period granted after the formal withdrawal of the UK from the European Union (i.e. as from 1 January 2021) was published on the Italian Official Gazette (the "Decree"). The Decree entered into force on the same day of publication and it is now to be subject to the scrutiny of the Italian Parliament for the purposes of its conversion into law, thus amendments to the provisions contained therein and described here below cannot be excluded at this stage.
With respect to UK insurance undertakings, these are the main provisions of the Decree:
Cancellation from the Italian IVASS Register and business management
UK insurance undertakings that are allowed to carry out business in Italy under freedom of services and right of establishment will be cancelled from IVASS list of EU insurance undertakings as from 1 January 2021 and will be allowed, after the end of the transition period (i.e. after 31 December 2020), to carry out their business exclusively within the limits of the management of insurance contracts and covers in place at such date without the possibility to enter into new contracts nor renew the existing contracts until the related expiry date or other term as provided under a specific plan to be transmitted to IVASS (further information here below).
Disclosure requirements to existing policyholders, insured and beneficiaries
Within 15 days from the end of the transition period, UK insurance undertakings are required to inform policyholders, insured persons and beneficiaries about the operational regime applicable to their insurance covers in place, also by means of their website.
Communications to IVASS
Within 90 days from the end of the transition period, UK insurers must file with IVASS an action plan containing measures for the effective and prompt management of the insurance policies in place at such date, including the payment of claims. UK insurance undertakings are also required to file with IVASS, on an annual basis, a report indicating the status of implementation of the abovementioned plan.
Right of withdrawal from existing contracts
After the expiry of the transition period, Italian policyholders of insurance contracts issued by UK insurance undertakings are allowed to withdraw from their policies having a duration longer than 1 year without any penalty, by sending a written communication to the insurer, with effect from the end of the first year following the end of the transition period. Tacit renewal clauses will no longer be effective as from the end of the transition period.
The Decree is now to be examined by the Italian Parliament and shall be converted into law within 60 days from its publication. We remain at your disposal for any clarification you may need.
Authored by Silvia Lolli and Davide Valloni
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