On 13 July 2021, IVASS published Order no. 111/2021 in matter of AML (“Order”), which has been published in the Italian Official Gazette on 24 July 2021, with effect from 25 July 2021.
The Order, which partially modifies previous IVASS Regulation no. 44/2019 in matter of AML, is addressed to the following operators transacting life insurance business in Italy:
- branches of insurance undertakings having legal seat in a EU or EEA country;
- insurance undertakings established without a branch, as per the definition of article 4 of the Order;
- insurance intermediaries; and
- insurance intermediaries established without a branch, as per the definition provided for by the said article 4 of the Order.
As per insurance undertakings without a branch, the Order clarifies that they are the undertakings with legal seat in a EU or a EEA country, which satisfy jointly all the below requirements:
- they transact life insurance business in Italy under the freedom to provide services basis; and
- they distribute their products through intermediaries registered in Sections A, B, C, and D of the register of insurance intermediaries (“RUI”) or through intermediaries operating in Italy under the right of establishment or the freedom to provide services regime; and
- with a gross premium collection exceeding 5 mln Euro (as communicated by the headquarter of the undertaking to IVASS).
As regards insurance intermediaries without a branch, the Order further clarifies that these are the intermediaries with legal seat in a EU or an EEA country, which distribute life insurance products under the freedom to provide services regime through intermediaries registered under Section E of the RUI.
Insurance undertakings with a branch on the Italian territory distributing standardized life insurance products with a low AML risk (as defined in the Order) can entrust the AML function to the correspondent AML function of their headquarter, including by appointing the head of the AML function at the insurance undertaking’s headquarter, provided that at least one of the members of such function is:
- an employee partially in secondment in Italy, if employed by the headquarter or domiciled in Italy, if not employed by the headquarter; or
- one of the general representatives of the branch, on condition however that he/she is not granted with powers that may prejudice his/her autonomy.
Insurance agents and brokers are instead requested to appoint an AML function on condition that both the requirements indicated below are jointly met:
- number of the employees or of the collaborators registered in Section E of the RUI is equal or more than 30 at the end of the calendar year; and
- they distribute life insurance products whose gross premium collection exceeds 15 min Euro, as communicated by the insurance undertakings to IVASS.
Where the agent or the broker is an individual entrepreneur (i.e. the agent is not established in the form of a corporate entity), it is not requested to appoint an AML function, as it is directly liable for the compliance with the provisions in matter of AML.
Insurance undertakings operating in Italy without a branch (as per the definition indicated above) are requested to appoint an individual responsible for suspicious transaction reporting who can be selected among the following subjects (who, in turn, must establish an AML function):
- the Italian branch, if this latter is already established for the exercise of the business under the right of establishment regime;
- the ultimate controlling Italian company or the company with legal seat in a EU or in a EEA country;
- any other company, with legal seat in a EU or in a EEA country, which is part of an Italian group or is part of a foreign group, as per article 3, para. 15, of EU Directive 2015/849;
- a subject of the company’s headquarter, provided that he/she is an employee of the headquarter, partially in secondment in Italy or in an office of a third party, provided he/she is available to the company or if not employed by the company’s headquarter, he/she is domiciled in Italy;
- an insurance intermediary registered under Section D of the RUI, distributing life insurance products;
- any other insurance intermediary obliged to establish its AML function, provided that such intermediary has been distributing life insurance products for at least two years.
In addition to the above, the Order provides, among others, that the policies, procedures and the internal AML controls are verified, as far as branches are concerned, by an independent audit function. Recurring certain conditions, such function may be exercised also by the internal audit function.
Insurance agents and brokers established in the form of a corporate entity are requested to appoint an internal audit function where the following conditions are jointly met:
- the number of the employees or the collaborators registered in Section E of the RUI is equal or exceeds 100; and
- the gross premium collection of the life insurance products distributed is higher than 20 mln Euro.
Finally, insurance undertakings are requested to indicate to their intermediaries all the data relating to the amount of premium collection realized by each intermediary and contributing to the definition of the company’s gross premium collection (as resulting from the last financial statements) within 30 days from the publication of the Order in the Italian Official Gazette.
Insurance undertakings established without a branch and all intermediaries shall comply with the Order starting from 1 January 2022.
The data and information regarding financial year 2020 shall be transmitted by 30 September 2021, whereas the name of the subject responsible for suspicious transaction reporting shall be notified to IVASS and to each of the intermediaries by 30 November 2021 by the insurance undertakings established without a branch.
The Order provides also for a certain number of amendments to IVASS Regulation no. 44/2019, on which we would be happy to return, upon request.
The Order (available, at the moment, only in Italian) can be found at the following link: https://www.ivass.it/normativa/nazionale/secondaria-ivass/normativi-provv/2021/provv_111/index.html?com.dotmarketing.htmlpage.language=1