Legislative Decree 4 August 2017 n. 124 (so called "Competition Law 2016") sets out a number of provisions affecting the insurance sector, and pricipally motor third party liability (MTPL) insurance.
According to art. 132, par. 1-ter, of the Insurance Code, as amended by the Competition Law, insurance companies are not obliged to accept proposals for compulsory MTPL insurance if the information provided by the policyholder does not match the results of the relevant insurance sector databases (such as the registry of authorized drivers, the claims data bank, the data bank for the register of witnesses and injured parties, etc.) and of the "Archivio Informatico Integrato" set up with IVASS. In such a case, the undertaking shall recalculate the premium and send a new estimate to the potential policyholder.
The same art. 132, par. 3-bis, provides for a faster track for IVASS to take action on complaints regarding refusals to enter into compulsory MTPL contracts and issue fines.
Fines for illegitimate non acceptance of proposals to take out compulsory MTPL insurance have been raised. They are now ranging from €2,500 to €15,000 (whereas they previously ranged from €1,500 to €4,500).
The Competition Law then adds two new articles to the Insurance Code, Art. 132-bis and Art. 132-ter.
Art. 132-bis burdens the intermediaries with a duty to inform the policyholder about the premiums applied by the other insurance companies the intermediary works with, as referred to the "contratto base" i.e. the standard MTPL policy provided by art. 22 of Law Decree 18 October 2012 n. 179. The contract is null and void in case of non-compliance.
Further provisions regard the "preventivatore", ie the MTPL premium calculator set up with IVASS.
Art. 132-ter is headed "compulsory discounts". The insurance company shall apply a discount if (i) the policyholder agrees to vehicle inspection; or (ii) if the policyholder agrees on the insurer installing a black box, or a portable black box is already installed on the vehicle; or (iii) a breath alcohol ignition interlock device is installed on the vehicle. The costs of installing, removing, maintaining, replacing and/or transferring the black box and/or the ignition interlock device shall be borne by the insurer. The discount shall be "significant".
Such discount shall be set out clearly in the estimate and in the policy, both as a percentage of the premium and as a separate figure. Within 90 days IVASS shall issue a regulation providing further details on the tariff and the premium discounts. The same regulations shall set out the guidelines for the insurers to apply a compulsory discount to drivers with a clean claim record who are resident in the Italian provinces where the claim ratio is higher.
IVASS shall oversee compliance with the above provisions on compulsory discounts and shall apply fines ranging from €10,000 to €80,000 in case of breach.
Another type of compulsory discount shall be applied when the policyholder has entered into different insurance policies for different vehicles and each policy has an Exclusive Authorized Driver clause.
The Competition Law provides for the policyholder’s right to repair the vehicle at whatever repair shop he wants and to get a full redress, provided that there is an invoice for the reparations and a two-year guarantee on them. This means that it is no longer possible to use insurance clauses providing for deductibles if and when the policyholder has the vehicle repaired at a repair shop which is outside the network of repair shops approved by the insurer.
An invoice for the reparation works is required also if the right of credit for redress has been assigned to a third party.
The insurance Industry Association (ANIA), the consumers associations and the repair shop associations shall agree on guidelines on vehicle reparations.
According to art. 133, par. 1-bis of the Insurance Code, an insurance company shall not apply a better "classe di merito" (class of merit, with reference to the bonus/malus system in MTPL) to a policyholder for the sole fact that he or she has been a customer of that insurance company for a longer period than another policyholder. Premiums shall only reflect the risks. Every clause that makes it more difficult for a policyholder to switch company is null and void.
Art. 135 of the Insurance Code, new par. 3-bis, 3-ter, 3-quater, limits the possibility to use eyewitnesses in court cases regarding road accidents. Once in receipt of a notice of loss, within the following 60 days the insurer shall invite the policyholder, by registered letter, to supply the names of the eyewitnesses. The policyholder shall do so within 60 days from receipt or the court shall not admit his eyewitnesses.
IVASS shall review the records of the claim data base on a quarterly basis (banca dati dei sinistri), which every company shall contribute to, and draft a report.
Further changes to art. 138 and art. 139 of the Insurance Code regard liquidation of non-patrimonial damage for major and minor injuries.
The new art. 145-bis of the Insurance Code refers to the evidentiary value of the black boxes and of the other electronic devices, and to the treatment of the relevant data. Such data shall be treated in accordance with the Code on Data Protection and shall be limited to those which are strictly necessary to ascertain liability in case of accident and set premium tariffs.
Art. 135, par. 2, as reformed by the Competition Law, provides that insurance companies authorized to transact business in Italy under freedom of services or on a branch passport basis shall report the details regarding the claims handled to IVASS. According to the previous wording it was IVASS that had to look for such data, through the Home State regulators. This information shall be furnished by the Company on a quarterly basis and within 60 days from the end of the relevant period, subject to fines ranging from €5,000 to € 50,000.
Par. 34 of the Competition Law provides that an insurance company shall publish on its website, by 30 April each year, the figure of discounted premiums, and report the same data to IVASS and to the Ministry of the Economic Development. Breach of this obligation is subject to a fine ranging from €10,000 to €100,000.
The Competition Law also provides for more stringent controls on vehicles circulating without the compulsory MTPL policy in place.
One last point is in respect of tacit renewal clauses. Since 2012, tacit renewal clauses have not been allowed in Italy for MTPL. MTPL contracts are terminated by law at their yearly expiry date (art. 170 bis of the Insurance Code). The Competition Law clarifies that this rule applies also in respect of ancillary insurance (eg personal injury, road assistance, legal expenses) which is sold in a bundle with MTPL (art. 170 bis, par. 1 bis, of the Insurance Code, as supplemented by the Competition Law).
Payment protection insurance
The Competition Law 2016 expands the scope of art. 28 of Law Decree 24 January 2012 n. 1, turned into Law 24 March 2012 n. 27. Art. 28 refers to insurance ancillary to mortgages and consumer credit. The original wording focused only on life insurance, providing that banks or financial intermediaries selling life insurance in a bundle with mortgages or consumer credit had to supply their clients with at least two insurance solutions, both offered and underwritten by companies not belonging to the bank group, and that the client was free to look for a better solution in the market. The new wording of art. 28 provides that when banks or financial intermediaries sell any kind of insurance in a bundle with mortgages or consumer credit or in connection to the same, the client is free to look for an alternative solution in the market. He or she is also entitled to terminate the insurance proposed by the bank or the financial intermediary within 60 days from taking out such insurance. If the mortgage or consumer financing is contingent upon such insurance, the client may look for a better different option in the market.
Finally, intermediaries shall disclose the commissions they receive from the insurance companies for selling their policies to those applying for mortgages or consumer credits.
Professional indemnity insurance
Art. 3, par. 5, let. e of Law Decree 13 August 2011 n. 138, turned into Law 14 September 2011 n. 148, as amended by Competition Law 2016, provides that compulsory professional indemnity insurance shall always provide for a ten year extended reporting period. This provision shall apply also to policies already pending at the date of publication of the Competition Law 2016.