Code of Private Insurance ("Code"), as amended by Legislative Decree no. 74 of 12 May 2015, as well as the transposition of the Guidelines on the methodology for equivalence assessments by national supervisory authorities under the Solvency II Directive, issued by EIOPA.1 Article published in dirittobancario.it on 13 June 2016

The regulatory text provides a legal framework for the procedures in the application of group supervision tools. These include group solvency, monitoring of intra-group transactions, risk concentration and governance, which are governed by separate regulations.

The Regulation consists of 30 articles divided into six chapters.

Chapter I lays down the general provisions, identifying the sources of law (Art. 1), the list of definitions by reference to the Code (Art. 2) and the scope (Art. 3).

Chapter II lays down the group supervision provisions. Article 4, in partial implementation of Art. 210-ter, paragraph 6 of the Code, provides that IVASS verifies that the group structure ensures sound and prudent management thereof and does not hamper the supervisory activity: otherwise IVASS can order a change in the shareholding structure of the group or request changes to its organizational structure. Article 5 identifies the notion of parent company and regulates cases where there is no ultimate parent company, granting IVASS the power to identify, on a case by case basis, the company within the group responsible for the fulfilment of the applicable regulatory requirements.

Article 6 defines the criteria to identify the insurance holding company for the purposes of applying the group supervisory tools. Article 7 provides for procedures of exclusion from the group supervisory scope if the requirements of art. 210-quater of the Code are met.

Article 8 provides for the applicability of the group supervisory tools in the event that the parent company is subject to the provisions on financial conglomerates.

Chapter III covers the operation and organization of the group: Art. 9 provides that the parent company assumes the role of contact point of IVASS for group supervision and applies, to its subsidiaries, the necessary measures to give effect to the provisions issued by IVASS. Article 10 summarizes the obligations of the subsidiaries to the parent company. Article 11 lays down the content of the articles of association of the parent company and of its subsidiaries.

Chapter IV (Articles 12-18) regulates the supervisory regimes for national subgroups of groups whose ultimate parent company is domiciled in a Member State or in a third country.

In the first case, the supervisory tools are not applied upon the Italian sub-group, but IVASS may decide to apply one or more supervisory tools to the individual sub-group on the basis of objective differences between the group and the subgroup in terms of operations, organization and risk profile, taking into account the methods and criteria set out in the European legislation and the agreements between colleges of supervisors set up for the specific groups (Art. 12).

In the second case, the supervisory tools are applied to the Italian sub-group, but IVASS may decide not to apply one or more supervisory tools to the individual sub-group, taking into account the methods and criteria set out in the European legislation and the agreements between colleges of supervisors set up for the specific groups (Art. 13).

Articles 14-16 govern the key rules of procedure - those of external relevance, related to the process for equivalence assessing and implementing the EIOPA guidelines. Article 17 provides that IVASS, where there is a supervisory regime on the equivalent group, may exempt the national subgroup, in accordance with art. 13, paragraph 1, letter a) from the group supervision. Pursuant to Art. 18, where the absence of an equivalent supervisory regime has been ascertained, IVASS can identify specific methods for compliance with the applicable provisions of this regulation or provide for the implementation, after consulting the other supervisory authorities concerned, of further supervisory methods which ensure appropriate supervision of the Italian insurance and reinsurance undertakings belonging to the group.

Chapter V regulates the setting up and keeping of the Register of parent companies. These provisions make no substantial change to the provisions previously in force as regards the subjective (persons required to enrol in the register) and objective (information published in the register) scope.

Under Article 19, the Regulation provides that the register contains the same information that is currently required under Regulation no. 15/2008, and must be indicated in the notice for enrolment in the register (Articles 20-22). The parent company shall also continue to notify the names of the companies included in the group’s scope of operations, as defined by Solvency II though not indicated in the public register (art. 21, par. 2), unless otherwise decided by IVASS.

Articles 23, 24 and 26 govern the registration procedure, the conditions for the automatic official registration and cancellation of the parent company in the event that it no longer meets the requirements to be defined as such.

Article 25 provides for the obligation to update the information on the company subsidiaries listed in the register, to be made within ten days of enrolment in the Companies’ register.

Articles 27 and 28 provide for the obligation to publicize the enrolment in the register by indicating so in the documents and correspondence of registered companies, as well as the procedures for consulting the register.

Chapter VI regulates the repeals and the transitional provisions, the publication and entry into force of the Regulation. The transitional provisions provide for a transitional period of 12 months during which:

  • the ultimate Italian parent company, not registered as parent company in the register referred to in Regulation no. 15/2008 at the date of the entry into force of the enforcement regime, does not file an application for registration under Article 20 within thirty days from the entry into force of the Regulation. It shall send a plan to IVASS showing the organizational and structural adjustments needed to ensure compliance with the new regulatory provisions;
  • save where otherwise decided by the ultimate parent company pursuant to subparagraph a) the company enrolled in the register under Regulation 15/2008, which is not the ultimate Italian parent company, continues to exercise its functions as parent company; with reference to the ultimate parent company, it is subject to the provisions laid down in Title XV and Article 207-octies, herein referred to, of the Code and in the relevant implementing measures, with the exception of the provisions on the ownership structure under Title VII, Chapter I of the Code;
  • compliance with the obligation of enrolment in the register, under art. 210-ter of the Code shall be considered fulfilled in case of registration of the ultimate parent company in the register, pursuant to Article 12 of ISVAP Regulation no. 15 of 20 February 2008;
  • the amendments to the articles of association, necessary to adapt to the provisions of the Regulation shall be made on the occasion of the first amendment to the articles of association following the entry into force of this Regulation, or in the case of the transitional regime, the changes shall be made within a time frame which is consistent with the performance of the necessary formalities required by the regulations and the consequent enrolment in the register and, anyway, in any case within 18 months after the entry into force of the Regulation.