It is of todays’ date (31 October 2019), the press release published by both IVASS and CONSOB by which the terms for submitting comments to the documents in consultation regarding, respectively, (i) POG and the revision of IVASS Regulations no. 24/2008, 40/2018 and 41/2018 and (ii) Consob document to revise discipline in matter of distribution of IBIPs by intermediaries subject to its supervision have been extended to 15 November 2019.

By way of reminder, the documents in question dealt with the following:


(a) IVASS Consultation Document no. 1/2019

The document put in consultation (which will end on 31 October 2019; comments may be sent to   concerns the insurance products' governance and contains 18 articles clustered into 4 Chapters.

Chapter I

This chapter contains the general provisions of the Regulation, concerning the legislative sources (art. 1) and the definitions (art. 2). In particular, art. 3 (Scope) provides that (i) the provisions of the Regulation  apply to domestic insurance companies and to Italian branches of insurance companies with legal seat in an extra EU country; (ii) Chapter II applies also to intermediaries which act as manufacturer; (iii) Chapter III concerns all the intermediaries registered in the Register of Intermediaries (RUI) and intermediaries established in another Member State which distribute investment insurance products.

Chapter II

This Chapter concerns the requirements of the insurance products' governance and control applicable to the manufacturers.

In particular, art. 5 provides that the administrative body of the insurance companies is liable for the compliance with the rules concerning the POG and that such body must approve and review, at least annually, the policy in matter of POG; when the analysis of the intermediary's activity shows that this latter plays a decision-making role in the design and development of an insurance product, the liability for the insurance product approval process is also assigned to the administrative body of the manufacturing intermediary, that is required to apply the POG policy that the administrative body of the insurance company must approve. On the other hand, the compliance function must monitor the development and the periodical review of the procedures and measures in matter of POG and the relevant report about the activities of the essential functions contains the assessments and the analysis carried out on the procedures of approval and review of each product.

Art. 6 sets forth the elements that the insurance companies must take into account in order to define the target market, also with specific regard to insurance investment products, and the obligation to identify the groups of customers to whom the product cannot be distributed (so-called "negative target"). The producer is also obliged to verify that the distribution of insurance products is carried out consistently with the identified target market.

Under art. 7, manufacturers set up, implement and maintain appropriate procedures and measures to ensure that the production of insurance products comply with the obligations regarding conflicts of interest, remuneration and incentive systems. Moreover, before deciding whether putting in the market an insurance product, manufacturers must (i) evaluate the risks deriving from the individual sales channels, in relation to the target market and the complexity of the product; (ii) define instructions relating to the insurance distribution activity; (iii) evaluate whether an insurance investment product can be detrimental to the functioning or the stability of financial markets and the insurance market or for the protection of policyholders.

As per art. 8,  manufacturers evaluate the costs and charges to be applied to the insurance product, examining, among others, (i) that the amount of costs and charges is compatible with the needs and the characteristics of the target market; (ii) that the structure of costs and charges is adequately transparent for the target market, does not hide the costs and charges and is not too complex to understand. With specific reference to insurance investment products, manufacturers evaluate that the costs and charges do not compromise the product performance expectations of the insurance investment.

Under art. 9, the product monitoring and review activity must be carried out at least annually and includes the assessment on the sale channels. With specific reference to insurance investment products, manufacturers must also identify events which could affect the potential risk or return expectations of product, in particular the minimum performance levels of the insurance product, under which it is necessary to carry out a new product review. As a result of the activity of monitoring and review of the product, manufacturers take appropriate and corrective measures, such as (i) providing customers or distributors with adequate information, (ii) reviewing the insurance product approval process, (iii) modifying the insurance product and (iv) informing IVASS if the results of the review process determine the adoption of significant measures by the manufacturer.

As far as information flows between manufacturer insurance companies and distributors are concerned, art. 10 provides that insurance companies are obliged to identify with the distributors - in a specific document subject to periodic review - the content, the frequency, the methods of exchange and the respective responsibilities of information relating to performance of their respective activities.

Chapter III

This Chapter III contains the provisions concerning the requirements for the insurance products' management and control applicable to distributors, which apply to all insurance intermediaries as regards non-life and life insurance products that do not fall under the definition of IBIPs, and only to agents and brokers, with specific reference to the distribution of insurance investment products.

Mechanisms which allow to distribute the product only to customers within the target market identified by the manufacturer are regulated (art. 11) and it is also provided that intermediaries registered in section D of the RUI will identify an actual target market as well as the additional customer categories to which the product does not can be distributed ("target negation effettivo" in Italian). The actual reference market and the actual negative target are communicated to the insurance company before the distribution of a product and are subject to the consistency checks carried out by the manufacturer (art. 12).

The exchange of information between distributors and producers is regulated and is aimed at allowing distributors to acquire the information they need to adequately know the products they intend to distribute (art. 13). The administrative body has the responsibility for compliance with the regulations on the mechanisms of distribution and definition of the actual target market and approves the written document on the distribution mechanisms, while the compliance control function monitor development and periodic review of the procedures and measures adopted for the distribution of insurance products. Furthermore, the intermediaries registered in section D of the RUI guarantee that the employers have the necessary skills to understand the characteristics and risks of the insurance products they intend to distribute, as well as the needs, characteristics and objectives of the reference market (art. 14). Specific internal control systems are identified for the intermediaries registered in the A, B and F sections of the RUI (art. 15) and the vertical collaboration relationships between the intermediaries registered in the A, B and D sections of the RUI and the members are regulated in section E of the RUI as well as the relationships and responsibilities deriving from the activity of horizontal collaboration between the intermediaries registered in sections A, B and D of the RUI (art. 16). Art. 17 disciplines the principle of proportionality, establishing that the obligations provided for distributors are applied in an appropriate and proportionate manner, taking into account the nature of the product and the related reference market.

Chapter IV

Under article 18, this Regulation applies starting from 31st March 2020.


(b) IVASS Consultation Document no. 2/2019

With IVASS Consultation Document no. 2/2019, whose consultation will end on 31 October 2019 (comments may be sent to, the Italian insurance regulator introduced a series of amendments to a certain number of regulations, as follows:

(1) Ivass regulation no. 23/2008:

EU companies doing MTPL business in Italy under the right of establishment or the freedom to provide services regime shall need to indicate in the quotation whether they apply the CARD system or not and, in the negative, they will have to direct the assured to revert to the insurance company of the driver who provoked the accident to obtain the restoration of damages;

(2) Ivass regulation no. 24/2008:

(i) EU insurance intermediaries doing business in Italy under the right of establishment or the freedom to provide services regime shall publish the report on the management of the complaints as already provided for by article 8 of IVASS regulation no. 24/2008, in order to give full disclosure of the information;

(ii) intermediaries registered under class D of the register of insurance intermediaries ("RUI") shall notify the insurance companies with the complaints received;

(3) Ivass regulation no. 38/2018:

the compliance function shall verify that the provisions in matter of product oversight governance are complied with by the insurance undertaking;

(4) Ivass regulation no. 40/2018:

(i) article 56 in matter of adequacy and appropriateness of the product is reworded in order to align it with the discipline regarding the distribution of banking products. The supplementary information provided by the intermediary to the policyholder in the forms under annexes 3 and 4 of regulation no. 40/2019 is revised and two further annexes are added, regarding the information on the IBIP (Annex 4 bis) and the list of the conduct rules on the part of the distributor (Annex 4 ter).

(ii) article 58 on demands and needs is integrated by a new paragraph 4 bis which requests the distributor to provide the client with a specific declaration, undersigned by the policyholder and the distributor, in which this latter declares that the product matches the policyholder's demands and needs.

As a consequence, paragraphs 5 and 6 of the article have been deleted, since they provided for the possibility of selling a product not matching to the policyholder's demands and needs and for the possibility of the distributor to sell the product also when he was not able to assess the adequacy of the product to the demand and needs of the policyholder, due to the denial of this latter to provide the information requested.

(iii) article 59 bis on cross selling (vendita abbinata, in Italian) has been introduced to indicate the supplementary information to be provided to the policyholders in case a cross selling activity takes place.

In particular, such information regards the costs associated to the purchase of the bundle of products and of the single items, which must be given also in form of a quotation, if no actual calculation of them is possible.

The said amendments are introduced to align the discipline of the IBIPs to that of financial products, as contained in ESMA orientation on cross selling dated July 2016.

(iv) document retention under article 67 is modified to clarify that the distributors must keep such documentation until the end of the insurance relationship, or until the longer term provided for by the law and, in any case, for at least five years.

Distributors shall also keep the documentation regarding the product and the product oversight governance received by the insurance undertakings or by the manufacturers.

(v) registration of telephone conversations and of electronic communications is introduced by new article 67 bis. In case of distance selling techniques, distributors must keep the registration of the telecom conversations or of the electronic communications even if no contract was concluded.

Distributors shall warn the clients that conversations will be registered, before the sale starts.

(vi) continuing professional development is partially reformed in order to provide that employees of intermediaries registered in classes A, B, D and F of the RUI distributing insurance products within or outside the intermediaries' premises must hold a secondary school diploma.

(vii) for IBIPS, the following is provided:

- Annex 4 bis must be given to IBIPs policyholders, while Annex 4 must be given to non IBIPs policyholders;

- para. 2, 3, 4 and5 of article 68 ter provide that specific information regarding nature, risks, costs and expenses related to IBIPs must be given to the policyholders, together with information on the risks related to the insolvency of the issuer, the volatility of the price of the underlying assets, the right of surrender, the existence o guarantees or not, etc.

The delivery of the ID and of the additional IPID are sufficient to allow the distributor to comply with its own rules, provided that the information furnished is complete. With respect to multi option products, however, the distributor must provide the information for each investment line;

- article 68 sexies identifies the cases where inducements can be paid or can be received. In particular, inducements can be paid or received only when they enhance the quality of insurance distribution and they must not jeopardize the intermediary's duty to act honestly, professionally and with equity in the best interest of the client.

The existence of inducements, their amount or the way for calculating them must be disclosed to the client in a complete, accurate and comprehensible way before the distribution of the product.

Inducements cannot be given or received when the performance of the obligation to the client may be biased or negatively influenced by them.

Inducements must be registered. In case of horizontal cooperation among intermediaries, inducements must be disclosed by the intermediary facing the client.

In case of independent advisory, inducements cannot be received, unless they are of small entity and they are not money.

- mandatory advisory activity is introduced by article 68 duodecies for IBIPs.

For sale with advisory activity, article 68 novies identifies the information to be requested and to be evaluated in order to verify whether the product is adequate. For the sales with no advisory activity, article 68 undecies provides for the obligation to evaluate the demands and needs of the client, as well as the client's knowledge and experience in respect to the product sold.    

(5) Ivass regulation no. 41/2018:

(i) the annual financial statement provided for by article 25 of Ivass regulation no. 41/2018 is extended to all insurance based investment products ("IBIPs"), while the intermediaries are requested to provide the insurance companies with all the information regarding the costs and expenses related to the distribution which shall be included in the annual financial statement;

(ii) two annexes to Ivass regulation no. 41/2018 are modified as follows: (x) the additional IPID for IBIPs ("dip aggiuntivo IBIP") shall also include a modified section on complaints, with a more detailed distinction between IVASS and Consob competences; and (y) the additional IPID for motor business shall indicate whether the insurer has applied to the CARD system or not.

The regulation, once released, will enter into force on 31 March 2020.


(ii) Consob

(c) amendments to Section IX of Consob regulation in matter of intermediaries regarding distribution of IBIPs

The document published today by Consob is aimed at aligning Consob regulation in matter of insurance intermediaries distributing IBIPs to the Insurance Distribution Directive ("IDD") and to the relevant implementation of the said EU Directive made under the Italian insurance code (the legislative decree no. 209/2005, the "Code").

The document, whose consultation will end on 31 October 2019 (comments may be sent through SIPE - Sistema Integrato per l'Esterno) , is divided into six parts dealing, among others, with:

(1) mandatory information vis à vis clients:

The information to be provided to clients interested in buying an IBIP are aligned to the IDD and the correspondent discipline contained in the Code.

In particular, the new provisions distinguish between information regarding the product - to be provided when transactions regarding IBIPs are carried out - and information regarding the distributor - to be given to the client when the contractual relationship is created and not necessarily every time a distribution activity is deployed, unless un update of such information has occurred -.

(2) horizontal collaborations:

In case of horizontal collaboration among intermediaries, the above said information must be provided by the distributor facing the client, who will respond to the relevant authority (IVASS or Consob, depending on the register where it is registered).

(3) adequacy and appropriateness:

As far as adequacy and appropriateness of the IBIPs are concerned, intermediaries supervised by Consob shall preliminarily assess the demands and needs of the client, in line with what provided for by article 20, para. 1, second period, of the IDD and with article 119 ter of the Code.

(4) advisory:

Advisory becomes mandatory for IBIPs, save for the products which cannot be defined complex as per the definition given by article 16 of UE regulation no. 2017/2359. Mandatory advisory activity shall not trigger the payment of commissions or other forms of remuneration.

The discipline of cross selling ("vendita abbinata" in Italian) is aligned to the IDD, while inducements are forbidden, unless they do enhance the quality of the distribution activity and they do not jeopardize the duty of the intermediary to act in the best interest of the client.

The above applies also in case of independent advisory, where inducements are forbidden, unless these are of small value and they do enhance the quality of the distribution activity and they do not jeopardize the duty of the intermediary to act in the best interest of the client.

(5) POG:

For intermediaries supervised by Consob, the obligation of the product oversight governance is introduced, with a definition of a target market and of a negative target market. In respect to clients falling within this latter, distribution will not take place, unless the products sold match with the clients demands and needs and are adequate and appropriate to them.

Intermediaries distributing structured deposits, financial products issued by banks other than the financial instruments and/or insurance products, etc. must apply conduct rules which must be consistent, regardless of the type of product distributed.

(6) conflicts of interest:

With respect to conflicts of interest, the discipline contained in Consob document put in consultation is aligned to the one issued by IVASS, by providing, among others, the impossibility, for the intermediary, to be appointed beneficiary or pledgee of the same policy whose distribution has been cared of by the same intermediary.

(7) distance selling techniques:

Specific provisions are then introduced for the sale of IBIPs through distance techniques.

The entry into force of the new regulation is set on 1 April 2020.