Market spotlight

Trends and prospects

What are the current trends in and future prospects for the insurance and reinsurance markets in your jurisdiction?

According to the 2017 annual report issued by the National Association of the Italian Insurance Undertakings, Italy ranks fourth in Europe and eighth worldwide for premiums collection.

At the end of 2016, 215 insurance undertakings provided services in Italy, 108 of which had legal offices in Italy and 104 were branches of other EU member states’ insurance undertakings. Most of them carried out exclusively non-life business (120) and 61 were involved exclusively in life insurance business, while 27 were mixed undertakings running both life and non-life business lines. Approximately 1,000 EU insurance undertakings carried out business in Italy directly under the ‘freedom to provide services’ regime.

In general terms, Italy is still considered a growing market as Italians are under-insured in most sectors.

Future trends include an increased attention of insurance undertakings (and thus of the Italian insurance regulator, IVASS) on the coverage of cyber-risks that both individuals and corporate private and public entities are facing. Another trend is the innovation of insurance policies and insurtech in general.  

The most significant recent or planned legal changes are as follows:

  • Law 24/2017 provides new obligations for private hospitals concerning the insurance coverage of medical liability;
  • Law 124/2017 provides various changes on motor vehicle liability insurance contracts;
  • IVASS recently approved  changes in relation to the management of internal segregated funds linked to traditional with-profit life insurance policies;
  • In accordance with the general principles issued by the parliament, the Italian Government published a bill of law for the implementation of the EU Insurance Distribution Directive (2016/97/EU);
  • the EU Markets in Financial Instruments Directive II (2014/65/EC), which is also applicable to certain insurance investment products, is already implemented in Italy;
  • the Italian securities market regulator CONSOB recently introduced the obligation to provide prospective policyholders with the key information document for packaged retail and insurance-based investment products to be delivered to retail investors; and
  • IVASS is completing the implementing measures of Directive 2009/138/EC (known as Solvency II) on corporate governance requirements for insurance undertakings and groups.

Regulatory framework


What is the primary legislation governing the (re)insurance industry in your jurisdiction?

The Italian legal framework governing the (re)insurance industry comprises:

  • the Civil Code, which sets out general principles for contracts and obligations and specific rules governing insurance life and non-life contracts;
  • Legislative Decree 209/2005 (the Insurance Code), which provides the main legal framework for the exercise of insurance activity and insurance mediation business;
  • Legislative Decree 58/1998 (the Consolidated Financial Act), which contains provisions also applicable to insurers and financial intermediaries when issuing and distributing investment insurance policies.

The Insurance Code and the Consolidated Financial Act are implemented by secondary provisions set out by the competent supervisory authorities (ie, IVASS, the insurance market regulator, and CONSOB, the securities market regulator).

Furthermore, the national framework is broadened by the various EU provisions for insurance undertakings directly applicable in Italy.  


Which government bodies regulate the (re)insurance industry in your jurisdiction and what is the extent of their powers?

IVASS is the Italian authority in charge of overseeing Italian (re)insurance undertakings and intermediaries. The main purposes of IVASS’s supervision are:

  • to protect policyholders, insured and beneficiaries;
  • to pursue the sound and prudent management of the insurance undertakings; and
  • to guarantee the stability of the insurance market.

To this aim, IVASS issues regulations, authorises procedures regarding (re)insurance companies and intermediaries, and imposes sanctions.

In addition, IVASS keeps the registers of the insurance undertakings and intermediaries operating in Italy.

CONSOB is the Italian authority competent for the supervision of financial intermediaries, which has supervisory powers in relation to:

  • transparency requirements to be met by insurers vis-à-vis Italian policyholders upon the issuance of investment life insurance policies (eg, requirements regarding the filing and delivering of a prospectus and of the key information document); and
  • conduct rules to be met by insurance undertakings and banking/financial intermediaries when distributing insurance products with financial content.

Ownership and organisational requirements

Ownership of (re)insurers

Are there any restrictions on ownership of or investment in (re)insurers in your jurisdiction, including any limits on foreign ownership/investment?

No legal restrictions apply to the ownership of, or investment in, Italian (re)insurers.

However, during a licence or authorisation process for the acquisition of a shareholding in a (re)insurance undertaking, IVASS (the insurance market regulator) will verify that the relevant shareholders comply with the sound and prudent management requirements set out by law.

For this purpose, IVASS will assess whether the subjects that will have direct or indirect controlling interests or qualifying holdings in an insurance undertaking meet the integrity requirements provided by Italian law, such as, among others:

  • not be disqualified from holding managing offices in enterprises; and
  • not be subjected to prevention measures or not have received a prison sentence that cannot be appealed for crimes provided by law.

What regulations, procedures and eligibility criteria govern the transfer of control of/acquisition of a stake in a (re)insurer?

The Insurance Code (Legislative Decree 209/2005) and relevant implementing provisions issued by IVASS make up the Italian legal framework for the transfer of control in an insurance undertaking and the acquisition of a shareholding.

The acquisition of the direct or indirect control over an insurance undertaking, or of a shareholding that represents 10% or more of the capital or of the voting rights, or that guarantees a significant influence over the management of that insurer, is subject to IVASS authorisation.

Prior communication to IVASS IVASS must be informed in advance by anyone intending to become the holder of a controlling shareholding or a qualifying shareholding.

Application for authorisation The acquisition of a controlling shareholding or a qualifying shareholding in an Italian insurance undertaking is subject to IVASS's prior authorisation on the basis of an application to be filed by the potential acquirer. In addition, IVASS must authorise in advance any change in participations whenever the proportion reaches or exceeds 20%, 30% or 50% of the voting rights or capital, or in case the changes affect the control or create a significant influence over the insurance.

Authorisation process IVASS will assess:

  • the good reputation of the potential buyer by verifying the integrity of the persons charged with the administration of the  same, its legal representatives, statutory auditors and chief executives, as well as its financial stability;
  • the financial solidity of the acquisition;
  • the future compliance of the target with prudent management requirements, financial stability and relevant provisions set out by law as implemented by IVASS; and
  • the probity, professional and independence requirements of prospective directors, statutory auditors, legal representatives and chief executives of the target insurance undertaking.

IVASS will issue or reject the authorisation within 60 business days of the date of receipt of the application.

Organisational requirements

Must (re)insurers adopt a certain legal structure in order to operate? If no mandatory company organisation applies, what are the common structures used?

The Insurance Code provides that an Italian insurer must be incorporated as:

  • a joint-stock company;
  • a cooperative company;
  • a mutual undertaking whose units are represented by shares;
  • an EU company under Regulation 2157/2001; or
  • a European cooperative society under Regulation 1435/2003.

Insurers are most commonly structured as joint-stock companies.

The Insurance Code provides that reinsurers incorporated in Italy must be either joint-stock companies or EU companies.

Do any particular corporate governance requirements apply to (re)insurers, including any eligibility criteria for directors and officers?


General corporate governance requirements Pursuant to the Insurance Code, as implemented by IVASS regulations, Italian insurance undertakings must set up an effective system of corporate governance that:

  • guarantees the sound and prudent management of the insurance business; and
  • must be proportionate to the nature, scale and complexity of the business of the undertaking.

For this purpose, insurance undertakings must establish an adequate organisational structure with a clear allocation of competences and responsibilities. Insurance undertakings must set up an internal audit function, a risk management system and a compliance function; the board of directors must approve the relevant policies governing such functions.

Italian law and IVASS set out specific conditions and procedures for outsourcing of functions within the insurance undertaking organisation to other entities.

Eligibility criteria Eligibility criteria are set out by Italian law and IVASS regulations for directors, persons charged with management and control functions and those who carry out key functions.

In particular, such persons must meet the professional, integrity and independence requirements, graded according to the principle of proportionality and of the importance and complexity of the function filled.

The requirements are assessed by taking into account the following aspects:

  • the relevant working experience;
  • any legal disqualification from holding managing offices in enterprises and any definitive conviction with imprisonment for the crimes provided by law;
  • the existence of business relationships and other relationships with financial nature with controlled or controlling (re) insurance undertakings; and
  • the existence of interlocking positions as per Law 214/2011.

Operating requirements

Authorisation procedure

Which (re)insurers must obtain authorisation from the regulator before operating on the market and what is the procedure for doing so?

Italian insurance undertakings must apply to IVASS (the insurance market regulator) for a licence before starting any insurance activity.   

The licence application must be filed together with a number of documents and information required by the Insurance Code (Legislative Decree 209/2005) as implemented by IVASS regulations.

IVASS grants the licence when, among others, the following conditions are met:

  • Organisational requirements: corporate form and structure comply with the law;
  • Capital and solvency requirements: the applicant holds the eligible basic own funds to cover the absolute floor of the minimum capital requirement and demonstrates that the insurance undertaking will be in a position to hold eligible own funds to cover the solvency capital requirement;
  • Administrative and financial requirements: a business plan and the by-laws are filed with IVASS together with the application; and
  • Corporate governance requirements: holders of qualifying holdings meet the good repute requirements and persons charged with the administration, management and control functions and those who perform the fundamental functions meet the professional, good repute and independence requirements set out by law and IVASS regulations.

IVASS must issue its decision on an application within 90 days of receiving the application.

Pursuant to the ‘single licence principle’, the Italian licence is valid within the territory of Italy and the relevant EU member states, in compliance with their local legislations.

Insurance undertakings that are licensed in a EU member state other than Italy are authorised to carry out insurance business in Italy directly, under the ‘freedom to provide services’ regime, or through an Italian branch, provided that the relevant communication procedures have been completed between the home country and IVASS.

Insurers with their registered office in a third country outside the European Union wishing to carry out business in Italy must:

  • establish a branch in Italy that must be licensed by IVASS; and
  • appoint an authorised agent resident in Italy and possessing the powers envisaged by the Insurance Code.

Financial requirements

What are the minimum capital and solvency requirements for (re)insurers operating in your jurisdiction?

Italian insurance undertakings must provide evidence – during the authorisation's application process and on a continuous basis –- that they will be in a position to hold eligible own funds to cover the minimum capital requirement and the solvency capital requirement provided by the EU Solvency II Directive (2009/138/EC) as implemented by the Insurance Code.

As for the minimum share capital, the Insurance Code provides that insurance undertakings hold the eligible basic own funds to cover the absolute floor of the minimum capital requirement, equal to no less than the following amounts:

  • For undertakings exercising separately life or non-life insurance business lines, the minimum capital requirement is equal to no less than €3.7 million;
  • For non-life insurance business lines, the minimum capital requirement can be equal to no less than €2.5 million if the activity carried out does not concern any of the following classes: motor vehicle liability, aircraft liability, liability for ships, general liability, credit and suretyship; and
  • For undertakings that exercise life insurance business together with accidents and health insurance business lines, the minimum capital requirement must be equal to no less than €6.2 million.

Insurance undertakings must calculate the minimum capital requirement at least quarterly and report the result of that calculation to IVASS.

Do any other financial requirements apply?

In order to guarantee the stability of the insurance markets, the Insurance Code and IVASS regulations set out specific rules governing the investment activity of the insurance undertakings in line with the general principles set out by the Solvency II Directive (eg, the ‘prudent person’ principle).

Personnel qualifications

Are personnel of (re)insurers subject to any professional qualification requirements?

Yes the directors, the statutory auditors and the general managers of insurance undertakings must comply with the professional qualification requirements set out by Italian law.

For this purpose, the insurers' personnel must declare to have gained relevant experience by exercising management, supervision or control activities in companies or entities in the insurance, credit or financial sectors, or in public entities or public administrations with some links with the relevant sectors, or in public or private companies of an adequate size, or teaching activity at university level in law, economics or other fields relevant for the insurance sector.

Business plan

What rules and requirements govern the business plans of (re)insurers?

Pursuant to Insurance Code rules and IVASS Regulation 10/ 2008, the business plan to be submitted to IVASS for the purpose of the licence process must contain, among others, information on:


  • the insurance activity that will be carried out and the nature of the risks and commitments that the insurance undertaking will cover, the sales network structure and the operating arrangements for distribution, the procedures for the issuing policies and collecting premiums, the claims settlement structure and the general principles on reinsurance policy;
  • the organisational structure of the insurance undertaking, with particular focus on the estimates of administrative services' cost and the financial resources intended to meet those costs, the internal control mechanisms, risk management and compliance functions, the procedures set up in compliance with the anti-money laundering regulations and outsourcing measures;
  • capital requirements; and
  • for the first three financial years, predictions on financial statements, on the financial resources for covering technical provisions and on the minimum capital and solvency requirements.

Risk management

What risk management systems and procedures must (re)insurers adopt?

The management body of insurance undertakings must define directives governing the system of internal controls, including policies on risk management.  

The risk management function shall be set up by a board of directors' resolution and its organisational position will be decided in accordance with the principle of separation between operational and control functions, and it will be nevertheless separated from the internal audit function.

The risk management function shall:

  • provide, among others, risk management policy and the criteria and relevant methods for measuring risks;
  • set out the procedures for reporting to the management body; and
  • validate the information flows required to ensure prompt control of exposures to risk and the immediate detection of faults found in operations.

Reporting and disclosure

What ongoing regulatory reporting and disclosure requirements apply to (re)insurers?

Solvency II implementing rules provide a complex framework concerning:

  • reporting and disclosure obligations regarding financial prudential requirements (eg, the own risk and solvency assessment and the Solvency and Financial Condition Report);
  • corporate governance; and
  • general organisation requirements.

Specific reporting obligations apply to the corporate governance system. Thus, in addition to the annual financial statements, insurance undertakings must provide IVASS with a report on their risk management systems and internal controls, including the composition and appointment of the management body, and the composition, roles and responsibility of the internal audit, risk management and compliance function.  

Other requirements

Do any other operating requirements apply in your jurisdiction?

Yes, both the Insurance Code and IVASS regulations provide operating requirements to be met by insurance undertakings depending upon the insurance class of business exercised by the insurer (eg, motor car insurance, assistance insurance).


What are the consequences of non-compliance with the operating requirements applicable to (re)insurers?

Non-compliance with the operating requirements set out by Italian laws and regulations for insurance undertakings will result in, among other things:

  • criminal sanctions, in case of insurance activity carried out without authorisation or impediments to the exercise of supervisory functions; and
  • administrative fines, in most cases of non-compliance with the conditions for carrying out insurance activity set out by the Insurance Code and IVASS regulations (up to €100,000).



What general rules, requirements and procedures govern the conclusion of (re)insurance contracts in your jurisdiction?

Insurance contracts are governed by:

  • general rules regulating the conclusion and execution of contracts and those specifically referred to insurance contracts (life and non-life insurance), provided by the Civil Code;
  • the Insurance Code (Legislative Decree 209/2005) and regulations issued by insurance market regulator IVASS, which provide:
  • specific rules regarding each type of insurance contract or specific aspects;
  • transparency and disclosure requirements to be met by the insurer vis-à-vis potential policyholders in the pre-contractual phase; and
  • post-sale requirements;
  • specific provisions under the Consumer Code and IVASS regulations for the conclusion of insurance policies by means of distance modalities. The former also provide the general rules on unfair terms; and
  • the Consolidated Financial Act and the implementing regulation issued by securities market regulator CONSOB regarding the pre-contractual requirements to be met by insurers when selling insurance investment products (unit and index-linked life insurance policies, with profit policies and capitalisation products).

There are no specific provisions governing reinsurance contracts under Italian law apart from the general rules on contracts and a few dedicated provisions in the Civil Code.

Mandatory/prohibited provisions

Are (re)insurance contracts subject to any mandatory/prohibited provisions?

 Yes, there are some mandatory/prohibited provisions governing insurance contracts.

The Civil Code provides general mandatory provisions applicable to all contracts regarding the modalities for the conclusion of the contract, its form, the capacity of the parties and what determinates the contract’s nullity or unenforceability.

The Civil Code also provides some specific mandatory rules for insurance contracts (eg, the contract must be in writing for evidence purposes), some of which can be derogated if they benefit the policyholder/insured, while the Insurance Code provides mandatory rules in relation to different aspects regarding specific insurance contracts. .

Among others, insurance contracts cannot cover:

  • events caused by fraud or gross negligence of the insured;
  • administrative fines; and
  • the risk of temporary driving disqualification or suspension of a driving licence.

The Insurance Code provides the nullity of insurance contracts concluded with an unauthorised insurance undertaking or with an insurance undertaking prevented from concluding new business.

Other general mandatory provisions are set out in relation to motor car insurance policies.

Under the mandatory drafting criteria provided by the Italian Insurance Code, insurance contract must be drawn up in a clear and exhaustive manner, and the clauses laying down forfeitures, nullity, limitations of covers or costs must be highlighted.

Implied terms

Can any terms be implied into (re)insurance contracts (eg, a duty of good faith)?

Yes, all the general principles set out by the Civil Code in relation to contracts apply to insurance and reinsurance contracts too.

The Civil Code provides that the duty of good faith is a general principle governing all phases of the insurance contractual relationship. Other principles include the duty of information and the duty of correctness and protection of the weaker of the contracting parties and consumers.

A specific drafting regime is set out for contractual clauses laying down advantages or more favourable clauses for the insurer (eg, limitation of liability, arbitration clauses) that – in contracts governed by general conditions, such as insurance contracts – must be specifically approved in writing.

Standard/common terms

What standard or common contractual terms are in use?

Italian law provides for the use of standard contractual clauses for certain insurance sectors, mostly with respect to mandatory insurance policies such as those for motor liability or professional liability insurance. Other provisions that impose specific contractual terms are included in the Civil Code (eg, duration of non-life insurance contracts, obligation to report claims), in the Insurance Code (eg, governing law for life and non-life insurance contracts, right of withdrawal) and IVASS regulations (eg, existence of a demographic risk cover in life insurance policies, clauses regarding the modalities for managing complaints received from policyholders).

‘Smart’ contracts

What is the state of development in your jurisdiction with regard to the use of ‘smart’ contracts (ie, blockchain based) for (re)insurance purposes? Are any other types of financial technology commonly used in the conclusion of (re)insurance contracts?

Insurance smart contracts are not yet available in Italy.

However, insurance undertakings and distributors launched several initiatives in 2017 to develop the insurtech sector, resulting in the creation of a number of start-up companies.

IVASS and the Italian Association of Insurance Companies are monitoring this sector.  


What rules and procedures govern breach of contract (for both (re)insurer and insured)?

The Civil Code provides general rules governing breach of contract. These entail the termination of the contract and the right to obtain a monetary compensation for any party suffering any damage.

In addition, the Civil Code provides a regime governing the breach of the following specific provisions:

  • In case of misrepresentations or failures to disclose relevant information by the insured, the insurer can withdraw from the insurance contract;
  • In case of misrepresentations or failures to disclose relevant information by the insured, the insurer can request the annulment of the contract if the insured acted fraudulently or with gross negligence;
  • In case the insured does not pay the premiums, the insurance cover is suspended until payments are made; and
  • For non-life insurance contracts, the voluntary breach of either the obligation to notify the insurer of the occurrence of an insured event, or of the obligation to avoid or mitigate the damages results in the loss of indemnity.

Consumer protection


What consumer protection regulations are in place to safeguard the rights of purchasers of insurance products and services?

The Insurance Code (Legislative Decree 209/2005), the regulations issued by the Italian insurance market regulator IVASS and the Consumer Code provide specific rules in order to guarantee an effective consumer protection.

Apart from the general principle to act fairly and in good faith, the Consumer Code provides rules aimed at protecting consumers against unfair terms (ie, terms that provide an unbalance between the rights and obligations of the parties in favour of the professional, and that are detrimental to the consumer). The code lists a number of clauses that are presumed null and void unless evidence is given by the professional that such terms were expressly negotiated with the consumer on a case-by-case basis.

Specific provisions govern the advertisement of insurance products, drafting criteria of insurance contracts, the right of withdrawal and the conclusion of distance contracts.



What general rules, requirements and procedures govern the filing of insurance claims?

Italian law does not provide specific detailed procedures for filing insurance claims to insurance undertakings apart from the following general principles:

  • For non-life insurance contracts, the insured must inform the insurance undertaking of the occurrence of the insured loss no later than three days following the occurrence of the event or acquiring knowledge of the event; and
  • Following the notification to the insurer, the policyholder must file with the insurance undertaking the relevant documentation provided in the insurance contracts concerning the loss, and must take any measure to avoid any increase of such loss or damage.

Moreover, the general principle is that the policy must clearly provide the rules for filing claims, the documents that the insurer may require from the insured/beneficiary for the assessment of the risk and of the claim amount. In this regard, the insurance undertaking cannot oblige the policyholder to provide it with documents that are not necessary to assess the claim.

Regulation 35/2010 issued by IVASS (the insurance market regulator) on transparency requirements to be met by insurers vis-à-vis policyholders provides that insurance undertakings must define in the pre-contractual documentation the procedures for the filing of insurance claims and the relevant documentation needed.

A specific regime exists for filing insurance claims for mandatory motor liability insurance policies.    

Time bar

What is the time bar for filing claims?

The time bar for filling insurance claims is set out in the Civil Code.

For non-life insurance contracts and reinsurance contracts, the time bar for filing claims to the insurance undertaking is two years from the day on which the event occurred.

For life insurance contracts, the time bar is 10 years from the death of the insured.

Denial of claim

On what grounds can the (re)insurer deny coverage?

The ground on which insurers can deny coverage depends on the line of business and the type of insurance coverage. In general terms, insurance undertakings deny the indemnification of a claim or the payment of the insurance benefits when:

  • the insured did not regularly pay the premiums;
  • the event is not covered or is specifically excluded from the policy;
  • the claim is time-barred;
  • the claim is fraudulent or incomplete;
  • the insured made false or incomplete statements upon signing the policy (subject to certain conditions);
  • there is not enough evidence relating to the insured event;
  • the insured breached his or her duty either to inform the insurer of the occurrence of the loss or to take any measure to avoid to increase of such loss; or
  • the losses or event causing the damages claimed by the insured occurred before the insured period.

What rules and procedures govern the insured’s challenge of the denial of a claim?

There are no rules and procedures governing the insured's challenge of the denial of a claim.

General rules regarding civil proceedings apply.

Italian law provides for alternative dispute resolution systems that will/may be adopted before starting a civil action in court (ie, the mandatory mediation procedure and the assisted negotiation for all types of claim and the special arbitration procedure before the arbitrator for financial disputes that applies in certain cases of alleged breach by a financial intermediary of its conduct rules when distributing life insurance investment products).

The insured has the right to file complaints with IVASS; however, the definition expressly excludes complaints regarding the (denied) payment of a claim by the insurer or the amount of the same.

Third-party actions

On what grounds can a third party file a claim directly with the (re)insurer?

The Civil Code and the Insurance Code (Legislative Decree 209/2005) provide that third parties can file a claim directly with the insurance undertaking in the following cases:

  • In third-party liability contracts, the insurance undertaking is generally entitled to indemnify directly any third party damaged if the insured is notified first and the policyholder so requests;
  • In motor car insurance; and
  • In life insurance contracts in favour of a third party, the appointed beneficiary has the right to obtain the payment of the capital benefits deriving from the death of the insured.

Punitive damages

Are punitive damages insurable?

No, punitive damages are not insurable under Italian law since neither statute nor case law recognises the compensation for punitive damages in civil proceedings. Italian courts can order a party to indemnify the claimant only for material and non-material damages suffered, provided that they are the direct consequences of a certain event.

Consequently, insurance undertakings operating in Italy do not cover punitive damages risk.

However, a recent Supreme Court decision concerning the enforcement of a foreign judgment that ordered the payment of punitive damages seems to recognise the possibility of such damages to a certain extent.


What regime governs (re)insurers’ subrogation rights?

The Civil Code provides that the insurance undertaking that indemnifies the loss suffered by the insured can file a civil action against the third party liable for the damage that caused the loss to the insured.

This subrogation's right is subject to certain conditions established by law and limited to the same amount paid by the insurance undertaking to the insured.

The insurance undertaking remains liable for damages caused while exercising the subrogation's right. 



How are the services of insurance intermediaries regulated in your jurisdiction?

The Insurance Code and Regulation 5/2006 of insurance market regulator IVASS implemented the EU Insurance Mediation Directive (2002/92/EC) with the aim to reorganise the activity of insurance intermediaries in Italy. This directive is however being replaced by Directive 2016/97/EU on insurance distribution, which is due to be implemented in Italy by July 1 2018, following a recent proposed postponement of the original deadline (February 23 2018). 

The definition of ‘insurance mediation activity’ includes the following:

  • introducing or proposing to potential clients insurance and reinsurance products;
  • providing assistance and advice to clients for the purpose to offer an insurance product; and
  • assistance in relation to the conclusion of contracts or in the administration or performance of such contracts, in particular in the event of a claim, if so provided.

Insurance mediation is a regulated activity, therefore, any individual or legal entity that exercise it in Italy must be listed on a register kept by IVASS (so-called ‘RUI’). The RUI is composed of various sections that are dedicated respectively to:

  • insurance agents;
  • insurance brokers;
  • tied agents;
  • banks and financial intermediaries; and
  • collaborators of the above-listed intermediaries when acting outside of their premises.

Insurance intermediaries must:

  • meet professional and good repute requirements in order to be registered on the RUI; and
  • have a professional liability insurance policy in place.

After registration, all insurance intermediaries must comply with the rules of conduct set out by the Insurance Code and IVASS regulations, including information and disclosure obligations/duties vis-à-vis clients.

A special regime is provided for banks and financial intermediaries that act as insurance intermediaries for the distribution of insurance investment products, as required under the Consolidated Financial Act and implementing Regulation on Intermediaries issued by the securities market regulator, CONSOB. Although that regulation was designed for financial intermediaries, it is also applicable to them as insurance intermediaries in relation to the distribution of insurance investment products. This regulation has been recently amended  in order to reflect changes to primary legislation due to the implementation of the EU Markets in Financial Instruments Directive II (2014/65/EC).


Tax liability

What tax liabilities arise in the conduct of (re)insurance business?

Corporate tax (Re)insurers carrying on (re)insurance activities in Italy are subject to corporate income tax at the standard rate of 24% and to regional tax on productive activities at 4.65% (subject to variations depending on the relevant regional legislation).

Tax on insurance contracts

Insurance premium tax (IPT) is applicable in Italy to premiums paid in relation to insurance policies that meet the tax territoriality requirement (eg, insured person resident in Italy, risk located in Italy, etc). The IPT is levied proportionally on the premiums paid to the insurer and the insurer has the duty to remit it to the Italian tax authorities. The IPT applies with rates ranging from 2.5% to 21.25% depending on the category of risks covered in the insurance policy; however, a specific exemption from the IPT is available for life insurance policies and with-profit contracts.

Depending on the circumstances (eg, the location of the insurer), insurance premium tax must be paid by the insurer (either an Italian insurer, an Italian branch of a foreign insurer or a foreign insurer operating under the ‘freedom of services’ regime – or the re-insurer if the IPT was not levied by the insurer) or the Italian policyholder. A yearly IPT return is due by the insurer (or in case of policyholders entering into a policy outside of Italy, the policyholder must report the IPT to the Italian tax authorities within one month of the payment of the premium).

Other taxes

Life insurance policyholders are subject to a 26% substitutive tax (which replaces the ordinary individual income tax) on the income realised as part of their life insurance contracts on the partial or total surrender of such contracts (subject to a reduction to 12.5% for the portion of the policy proceeds arising from underlying assets invested in White-List Government Bonds or equivalent securities). The 26% substitutive tax is levied by Italian insurers or Italian branches of foreign insurers and no formal obligation rests on the policyholder. In case of policies entered into with foreign insurers operating under the freedom of services regime, any income arising from the policy must be included by the policyholder in the yearly tax return and subject to tax at 26%, unless the foreign insurer opted to levy the substitutive tax itself.

The death benefit payable to the beneficiaries in case of death of the assured person are not subject to income taxes limitedly to the portion of the death benefits paid in return of the demographical risk coverage – that is, only limitedly to the portion of the death benefit linked to the death risk cover, while the remaining portion of the death benefit will be subject to substitutive tax.

Tax on mathematical reserves Italian insurers and Italian branches of foreign insurers, as well as foreign insurers operating under the freedom of services regime but that opted to apply the 26% substitutive tax, are subject to a tax at 0.45% on the mathematical reserves recorded in the financial statements at year end, with the exclusion of those related to policies covering the risk of death or permanent invalidity deriving from any cause or non-self-sufficiency in the daily life, as well as of those related to certain pension funds and other insurance policies. Such 0.45% tax represents an advance payment of the 26% substitutive tax. In order to recover such 0.45% tax, the insurer must:

  • offset it against the 26% substitutive tax levied on income distributed to Italian policyholders and payable to the Italian tax authorities during each fiscal year; or
  • carry forward any exceeding amount and recover it either:
  • against substitutive tax liabilities arising in the following years; or
  • if the amount due for the substitutive tax is lower than the amount of 0.45% tax paid on the 5th prior year, offsetting it against taxes, contributions and other amounts due by the insurer or, if possible, transferring it to group companies.

Miscellaneous taxes

Insurers may also be liable to pay additional contributions (to guarantee funds) or IPT surtaxes (eg, the anti-racket additional tax, which is levied on certain classes of risks).

In this regard, the Insurance Code provides that insurance undertakings authorised to carry out motor car and craft liability insurance must pay an annual contribution to the autonomous management of the guarantee fund for road accident victims. Insurance undertakings authorised to pursue hunting liability insurance are subject to a similar obligation. The annual contribution must be paid to the guarantee fund of hunting victims.

Value added tax (VAT)

(Re)insurance transactions, as well as services provided by (re)insurance intermediaries in respect of such transactions, are VAT exempt.



What regime governs the insolvency of (re)insurers?

The insolvency of Italian insurance undertakings is governed by the compulsory administrative liquidation (CAL) procedure whose rules are set out in the Insurance Code (Legislative Decree 209/2005) and the Bankruptcy Law.

CAL takes place not only in case of insolvency, but also in cases of serious irregularities in the administration or violation of rules of law upon proposal from insurance market regulator IVASS.

Where an insurance undertaking is insolvent but the likelihood to restore its financial stability is strong, an extraordinary administration procedure can be opened if the insurance undertaking meets the size and other mandatory requirements. This procedure is aimed at rescuing distressed big enterprises and will be converted into CAL at a later stage.

The minister of economic development, upon IVASS’s proposal, opens the CAL procedure; as a consequence, the insurance authorisation is revoked. The CAL procedure takes place under the supervision of IVASS, which appoints one or more liquidators and a supervisory committee.

No action and no enforcement may be promoted or brought from the starting date of the CAL procedure.

Effect on insureds

How does a (re)insurer’s insolvency affect insureds and the (re)insurer’s obligations to insureds?

In case of insolvency of an insurance undertaking, the Italian legislation sets out specific measures aimed at protecting the policyholders.

Existing insurance contracts will continue to cover the insured risks for 60 days after the date of publication of the CAL order in the Italian Official Journal.

Policyholders have 60 days to exercise their right of withdrawal after the publication of the CAL order. A specific regime is set out for insurance contracts concerning civil liability in respect of the use of motor vehicles and craft that are valid and effective also after the insurer has been subject to CAL, until expiration of the contract or the period for which the premium is paid.

In addition, policyholders have a special privilege position in the liquidation of assets representing technical provisions for life and non-life business, which, on the date of CAL, are recorded in the relevant accounting books of the insurer.  

Dispute resolution


Are there any compulsory or preferred venues for insurance litigation in your jurisdiction?

 Italian ordinary courts are the preferred venues for disputes concerning obligations deriving from insurance contracts. Where the policy is entered into with a consumer, the competent court is the one of the place of residence or domicile of the insured (although alternative criteria for jurisdiction may apply, at the plaintiff's choice).

The plaintiff shall avail itself of the following alternative dispute resolution systems before starting a legal action in Court in Italy:

  • For disputes relevant to insurance contracts, claimants must start mediation proceedings before suing defendants in courts;
  • In relation to the same disputes, claimants are also entitled to try to reach an amicable settlement by means of the so-called ‘assisted negotiation’; and
  • For disputes regarding compliance by the insurer and/or its financial intermediaries (eg, banks, investment companies and other financial intermediaries) with the provision of the Consolidated Financial Act and relevant implementing regulation on distribution of insurance investment policies, claimants can use the Arbitrator for Financial Disputes, established by securities market regulator CONSOB for that purpose.

 How are insurance disputes with a cross-border element handled in your jurisdiction?

The jurisdiction of the Italian courts is established pursuant to the  Brussels Regulation (1215/2012), which also applies where the defendant is domiciled outside the European Union. Therefore, depending on cross-border elements contained in the insurance contracts, the Italian ordinary courts may have jurisdiction (eg, if the policyholder resides in Italy).

Ordinary rules of civil procedure apply, although some procedural precautions are envisaged in case the defendant resides or is domiciled outside of Italy. The minimum term for appearance is longer for foreign defendants and the translation of the writ of summons is required (under certain circumstances) so as to grant a full right to justice to the foreign defendant.

Before starting a judicial proceeding in Italy, a claim may be filed through the FINNET system for disputes concerning financial insurance products.

What issues are commonly the subject of insurance litigation?

 The most common issues concern the amount and/or title of the insurance claim that may be based on various arguments depending on the type of contract, for instance:

  • the provisions of false or incomplete statements by the policyholders;
  • the validity of the insurance policy;
  • the breach by the insurer of transparency requirements vis-à-vis the policyholder; and
  • the breach by the insurer and its intermediaries of the obligation to provide correct information to potential clients upon distributing the policies.

What is the typical timeframe for insurance litigation?

It depends on the complexity of the dispute and on the proceedings adopted by the claimant in its writ of summons (ordinary proceedings or summary proceedings).

It typically takes two to three years to obtain the first-instance ruling in ordinary proceedings and one to three years to obtain the second-instance ruling. An appeal against a second-instance judgment before the Supreme Court takes around two years.


What regime governs the arbitrability of insurance disputes?

Arbitral tribunals may handle disputes involving rights that the parties can dispose of. 

Arbitration clauses are generally not provided in insurance policies with consumers and, if proposed by the insurer, should be specifically negotiated and approved in writing, compliant with certain conditions. Moreover, for certain types of coverage (eg, accidents and health insurance) insurance market regulator IVASS provides specific requirements as to the seat of the arbitration.

Arbitration clauses are commonly used when the insurance contracts are entered into with professionals and cover the so-called ‘large risks’.

The decision of the arbitrator(s) is enforced by the court of the place of arbitration through a very simplified procedure of exequatur. Enforcement by foreign countries’ courts is governed by the law of the state of the courts in question.

Italian awards cannot be appealed. The losing party may apply for the annulment of the award on limited grounds only.