On October 7 2014 the Italian Competition Authority (AGCM) and the Italian Insurance Authority (IVASS) signed a memorandum of understanding on consumer protection in the insurance market. The memorandum is an addendum to the general memorandum of understanding between the AGCM and IVASS issued on August 2 2013.

The new memorandum adds to the numerous memoranda of understanding on consumer protection and unfair practices between the AGCM and other authorities, such as the Bank of Italy, the Italian Energy Authority and the Italian Communication Authority. It is intended to strengthen cooperation between the AGCM and IVASS in order to ensure consumer protection in dealings with insurers and intermediaries.

The memorandum will be reviewed after one year; the review procedure must be completed by December 31 2016.

Scope of memorandum

The memorandum covers:

  • cooperation in AGCM and IVASS institutional interventions in their respective remits; and
  • AGCM reports submitted to IVASS regarding potential violations of insurance regulations, as well as IVASS reports submitted to the AGCM regarding potential competition law infringements.

For the purposes of cooperation, the AGCM and IVASS can:

  • appoint a permanent working group to implement the memorandum; and
  • undertake reciprocal exchanges of information and documents (which are covered by professional secrecy).

In the context of AGCM consumer protection investigations in the insurance sector, the memorandum provides that the AGCM may request from IVASS:

  • a legal opinion to be issued by IVASS within 30 days of receipt of the request, once the AGCM has completed its investigation; or
  • a legal opinion to be issued by IVASS within 45 days of receipt of the request, where the parties to proceedings pending before the AGCM propose certain commitments.

What to do

Insurers and intermediaries should take into account the fact that the AGCM and IVASS have increased the level of their cooperation. Thus, all information and documents provided to one authority are likely to be shared with the other and may be relevant to proceedings before both authorities. Accordingly, insurers and intermediaries should be aware of the risks arising from these information exchanges and parallel proceedings before the AGCM and IVASS for different allegations. For instance, in some cases the Italian Communication Authority has considered information and documents provided by the AGCM in relation to investigations for alleged unfair practices and subsequently commenced independent investigations of other allegations.

In light of the above, insurers and intermediaries should consider the following legal instruments:

  • customised consumer compliance codes addressed to their employees which summarise practical information, including the most important provisions of the Consumer Code, the scope of their application and, in case of call centre operators, how to reply to consumer complaints; and
  • internal audits to verify compliance with the Consumer Code and limit the risk of investigation (eg, by a survey of consumer complaints).

Francesca Sutti & Alice Galbusera

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