On 17 March 2022, IVASS launched a public consultation on a draft regulation laying down provisions concerning the setting up of an online comparison system for 'basic contract' premiums offered by insurance undertakings operating in Italy in the motor liability insurance class (the “Draft Regulation”), aimed at implementing Article 132-bis, paragraph 3 of Legislative Decree No. 209 of 7 September 2005 (the “Italian Insurance Code”).
In particular, Article 132-bis of the Italian Insurance Code:
- provides for disclosure obligations for insurance intermediaries who, before the signing of a compulsory motor liability insurance contract, are required to inform the consumer in a correct, transparent and exhaustive manner on the premiums offered by all the insurance companies for which they operate in relation to the so-called “basic contract” (i.e. the contract model for compulsory insurance against civil liability in respect of the use of motor vehicles containing the minimum clauses necessary to fulfil the legal obligation, laid down according to classes of merit and types of insured person, which has been defined under Decree of the Italian Ministry of Economic Development No. 54 of 11 March 2020). To this end, intermediaries shall connect to the website of the comparison system (the so called “Estimator”), which is also accessible from the websites of IVASS and the Italian Ministry of Economic Development;
- attributes to IVASS the power to adopt implementing provisions to guarantee access and response by telematic means, both to consumers and to intermediaries, exclusively for the premiums applied by insurance undertakings for the motor liability basic contract and to define the methods by which, having obtained the quotes on the basis of the information included in an information service, it is possible to conclude the contract at conditions that are not worse than those indicated in the quote. The contract may be concluded at an agency of the undertaking or, for undertakings which so provide, through a direct link to their website.
By way of background, it should be noted that a first public consultation on a draft regulation concerning the Estimator, called PREVENTIVASS, was launched on 26 March 2021, then closed on 25 May 2021. Following the comments made by the stakeholders, the regulatory text was revised and integrated by IVASS and therefore a second public consultation was deemed appropriate.
- Purpose: the Draft Regulation aims at adapting the existing public estimator (called “”Tuo Preventivatore”) to the changed regulatory framework and to the development of the technology, by offering a free and impartial online comparative estimation service that collects and compares the offers of all insurance companies concerning the basic motor liability contract in a transparent manner and in the exclusive interest of the consumer, using data collection techniques through the use of external sources.
Scope: the Draft Regulation would apply to:
- Italian insurance companies, Italian branches of insurance companies with registered office in a third Country with respect to the EEA and EEA insurance companies operating in Italy under right of establishment or freedom to provide services, which exercise business in class 10 (motor insurance liability);
- Italian insurance intermediaries enrolled in sections A (Agents), D (Banks and other financial intermediaries) and F (ancillary intermediaries) of the RUI and EEA insurance intermediaries operating in Italy which have mandates for the distribution of motor liability insurance contracts.
In this regard, insurance intermediaries expressed their observations on the breadth of the subjective scope of application defined in the previous draft regulation, with specific reference to the extension to all the intermediaries registered in the Register of Insurance Intermediaries (“RUI”) regardless of whether or not there is a mandate from an insurance company, to the employees within the premises not subject to the obligation to be registered in the RUI as well as the so-called "horizontal collaborations" between individual intermediaries registered in the RUI.
IVASS has amended the Draft Regulation, in the sense of limiting its scope of application to insurance intermediaries acting on the basis of a mandate from the insurer for the distribution of motor liability contracts registered in Sections A), D) and F) of the RUI, as well as to those - also acting as agents for the distribution of motor liability contracts - located in another member State of the European Economic Area operating in Italy. The aforesaid intermediaries would be subject to the obligation to provide a quote for the basic contract also when in the exercise of their activity they use collaborators registered in section E of the RUI, except in the context of horizontal collaborations. Consequently, although they are not directly obliged to issue a quotation, collaborators enrolled in section E of the RUI, when they work for intermediaries subject to the obligation, are subject to the instructions given by the reference intermediary by virtue of the relationship with the latter. For the intermediaries registered in Section F of the RUI, the obligation applies only if the motor liability insurance is an integral part of the good or service provided by them as part of their main professional activity. As regards the intermediaries registered in Section B (Brokers), on the other hand, they would be excluded from the scope of application of the Draft Regulation since they act on behalf of the client and operate without a mandate from insurance companies. Insurance undertakings distributing directly motor liability insurance contracts would not be required to comply with the disclosure obligation related to the premiums offered with respect to the motor liability insurance basic contract.
- Applicability of the relevant rules also in the event of renewal of motor liability insurance contracts: according to some commentators, the obligation for companies to reply to requests for quotes relating to the basic contract should not include the cases of renewals of motor liability contracts which have reached their annual expiry date, and should only apply to cases of first subscription. In this regard, IVASS deems that the provisions under the Italian Insurance Code and related implementing rules do not make any distinction between the events of first subscription and renewal of such contracts, so that the abovementioned obligation should apply also in the event of renewal of a previous motor liability insurance contract.
- Option for companies to offer "additional" clauses to the basic contract: some commentators have pointed out that, under the previously consulted draft regulation, the quotation contained not only the minimum compulsory conditions set out in the basic motor liability contract, but also the additional clauses set out in the aforementioned Ministerial Decree No. 54 of 11 March 2020 (e.g. exclusive driving, expert driving, increase in minimum legal limits, limitation and exclusion of recourse etc.), if adopted by the insurance company in its commercial offer. This would be in contrast to the provisions of the Ministerial Decree, according to which the mandatory minimum conditions are offered by all companies, which remain free to evaluate whether to offer one or more additional clauses. In this regard, IVASS considers that the offer formulated by the companies through the public Estimator has no reason to differ significantly from the offer made through other sales channels and has, therefore, accepted the abovementioned comments by providing that the insurance undertaking shall issue a quote for additional clauses offered upon free evaluation and initiative.
- Validity of quotations: insurance companies have observed that the wording of the previously consulted draft regulation - which gave the quote obtained through the Estimator validity for sixty days from its issue date regardless of the residual duration of the current tariff – was not in line with IVASS secondary measures in this regard and limited freedom of insurance companies with respect to pricing. IVASS accepted such observations by providing that the insurance undertaking shall apply the tariff in force on the effective date of the insurance cover for which the quotes are requested. It has also provided that in the case of requests for quotes for motor liability insurance cover with an effective date subsequent to the sixty-day validity period, insurance companies are required to reply for information purposes only, without any obligation on the part of the undertaking to conclude the contract under the conditions set out in the quotation issued.
- Methods of access to the New Estimator by insurance intermediaries and companies: the Draft Regulation has been amended by providing that intermediaries can access the Estimator directly, without authentication by Public Digital Identity System (SPID) or prior registration. Intermediaries would be therefore allowed to access the Estimator directly from the public section of the same or from the website of each company. The obligation to communicate and constantly update the underlying network of collaborators (employees, horizontal collaborations) has also been removed from the regulatory obligations incumbent on insurance intermediaries. Given, on the other hand, that for integration into the Estimator it is necessary for companies to have a reserved area, the provision for authentication via SPID could not be changed for them. However, the requests of companies to exempt them from the obligation to: (i) periodically survey and communicate their distribution network to the Estimator system and (ii) transmit to the Estimator the monthly list of motor liability contracts taken out, complete with references to the relevant quotes obtained through the Estimator, have been accepted by IVASS.
- Possible service disruptions: comments were made in relation to the possible disruptions of the Estimator; in the event of unavailability of the same and of the sector databases, intermediaries would be exempted from the burden of a new query, provided they can provide proof of the same. To this end, intermediaries would be required to keep evidence of the time and date on which the query was made.
Next steps
The public consultation on the Draft Regulation will be open until 16 April 2022.
Please click here to download the text of the Draft Regulation (available in Italian only).
Authored by Silvia Lolli and Davide Valloni.
