In recent years, the attention that IVASS (the Italian insurance regulator) and the EU authorities have paid to the protection and needs of insureds has increased and been translated into market letters (among other initiatives). These market letters aim to encourage insurers to intervene in contracts through the introduction of protective measures or eliminate potentially punitive restrictions, thereby limiting contractual autonomy in various areas.
This has resulted in increased conflict between compliance and regulation on the one hand and civil law on the other. This is something that other sectors have already experienced and could ultimately have a significant impact on insurance litigation (eg, by potentially increasing litigation stemming from poor policy language or the existence of clauses that were initially negotiated by the parties, but turn out to no longer be valid due to subsequent regulatory measures).
This trend appears to be confirmed by a number of recent IVASS market letters on the following topics:
- Product language – IVASS's market letter of March 14 2018 invited insurers to review policy wording according to certain guidelines in an effort to make them easier to understand and more user friendly.
- Accident and sickness insurance contracts – IVASS's market letter of February 28 2018 invited insurers to cancel certain clauses of policies on the non-transferability to heirs of the right to damages, which are considered particularly unfair.
- Insurance distribution – IVASS's market letter of September 4 2017 invited insurers and insurance intermediaries to take the necessary steps to:
- identify the needs of insureds;
- check the adequacy of products in respect of such needs; and
- familiarise themselves with the legislative framework under the EU Insurance Distribution Directive (2016/97/EC).
- Payment protection insurance – IVASS's market letter of April 3 2017 invited insurers to cancel provisions in insurance contracts which restrict the insured's right to a refund of the portion of a premium not enjoyed in case of early partial repayment of a connected loan.
Now as ever, the focus on insurance products and their content is a priority for any undertaking or intermediary with respect to any class of risk with a view to preventing or at least containing litigation and the related costs. This will require increased dialogue between compliance and litigations teams.
For further information on this topic please contact David Maria Marino at DLA Piper Italy by telephone (+39 02 80 61 81) or email (firstname.lastname@example.org). The DLA Piper Italy website can be accessed at www.dlapiper.com.
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