On October 22, IVASS, the Italian insurance regulator, issued a new measure (the Provision) aimed at implementing the provisions of Law Decree no. 91 of 24 June 2014, converted with amendments into Law no. 116 of 11 August 2014 (Competitiveness Decree).

The Competitiveness Decree allows Italian insurance companies to grant financing directly to borrowers (other than individuals and micro-enterprises) for the purpose of widening the range of potential lenders and boosting access to credit.

Insurers shall adopt a ‘financing plan’, to be submitted to IVASS for evaluation, and they are allowed to consider such financings as investments covering their technical provisions, up to certain thresholds which have been set by the Provision.

Insurers must be assisted by a bank or financial intermediary in the activity of selecting borrowers, and such bank or financial intermediary shall retain an interest in each transaction, until the expiration of the transaction (but such interest is transferable to other banks or financial intermediaries). Alternatively, insurers may seek an authorisation from IVASS to directly carry out the activity of selecting borrowers.

Further implementation measures are expected to regulate access by insurers to the credit risk database kept by the Bank of Italy and periodic reporting to the Bank of Italy in respect of such financing business.

This development is consistent with wider efforts to encourage investment by insurers in the European economy.