In the past few weeks the Italian regulator, ISVAP, has published two bills related to third party motor liability insurance.
On February 17th, ISVAP issued a consultation paper on its proposal to create a database of all third party motor liability claims which is to be maintained by insurers. This proposal is yet another demonstration of the intense activity of the Italian regulator: this is the ninth regulation under consultation which concerns the insurance industry (in addition to the 28th regulations already enacted).
The current proposal implements the provision of section 135 of the Code of Insurance which aims to assist in the prevention of insurance fraud. The information to be maintained by all insurers operating in Italy will be available to both public authorities and public prosecutors. Furthermore, the proposed requirements will be applicable to all insurers established in Italy or authorised to operate under the freedom of services regime.
In addition to the above proposal, the Italian government has proposed a bill that will modify the criteria by which insurers make payments between themselves in cases where a third party motor liability claim is adjusted by the insurer of an injured party. Following the reform of the Code of Insurance, such adjustments can be made by the insurer of the injured party where there are no serious personal injuries (ie, exceeding a certain threshold). The indemnity is subsequently reimbursed by the insurer of the party causing injury. The proposed bill now aims at differentiating the amounts to be reimbursed to the injured party’s insurer, based on the value of the damaged vehicle.
The two proposed regulations further add to the over-regulated third party motor liability market despite the new Code of Insurance. However, the complex Italian system is currently under the scrutiny of the European Court of Justice, before which some EU insurers operating in Italy, have challenged the Italian legislation. Those insurers claim that the obligations for insurers to publish their motor third party liability tariffs (to be calculated on the basis of certain criteria in relation to any risk) and undertake any risk of insureds which accept the proposed tariff, are against the principles of EU law.