On December 6 2011 the Italian insurance regulator, ISVAP, issued Note 2946 concerning rules of conduct for insurance intermediaries. The note supplements Article 48 of ISVAP's Regulation 5/2006 on insurance mediation and will have a significant impact on the bancassurance market.

According to Article 1 of the note, a person or entity is prevented from both brokering the policy and being the beneficiary or payee of the same insurance contract, whether individual or collective.

This prohibition applies to any entity acting directly or indirectly, including an entity acting through a group relationship, its own business or the business of other companies in its group.

The ISVAP's rationale is that particularly in the market for insurance policies linked to loans and financing, the level of commission paid by consumers to banks and financial institutions for their insurance brokerage services is disproportionate. ISVAP had already issued such a provision in June 2010, along with Regulation 35 on transparency, but the Lazio Administrative Court cancelled it for procedural reasons, further to a petition filed by a banking industry association.

ISVAP carried out a public consultation process, inviting operators to supply their comments by the end of January 2011 and thereby rectifying its previous procedural omission.

As commission levels have remained substantially unchanged, ISVAP has reissued the provision, preventing intermediaries from acting simultaneously as beneficiary or payee of the relevant insurance contract. The provision will come into force on April 2 2012, forcing players to rearrange their distribution models.

For further information on this topic please contact David Maria Marino or Mauro Carretta at DLA Piper Italy by telephone (+39 02 80 61 81), fax (+39 02 80 61 82 01) or email ([email protected] or [email protected]).