How does Cura Italia and the liquidity decrees affect the insurance sector?
1) Postponement of court proceedings in civil, criminal and administrative proceedings
and thus affect the parties involved in ongoing proceedings before Italian courts including insurance companies and intermediaries and the latter entities and individuals involved in authorization / notification procedures prior to IVASS . It is worth mentioning among the other measures:
- the postponement until after 1
- all conditions relating to administrative proceedings taking place on 23 February 2020 or commenced after that date, including administrative proceedings before IVASS, are suspended until 15 May 2020.
2) Other measures such as Pope acknowledges the insurance sector
The Cura Italia Decree and other measures chosen at national level also contain provisions that directly affect the insurance sector . In particular:
- the possibility to keep insurance companies open (despite the provisions on restrictions and restrictions on the free movement of persons on public roads);
- until 31 July 2020, the period during which insurance companies are required to maintain validity The insurance cover according to the current insurance contract regarding compulsory insurance against civil liability for the use of motor vehicles until the new insurance takes effect – currently 15 days after the end of the insurance – is extended by another 15 days.
- the conditions for insurance undertakings to provide the injured party with an appropriate and justified offer of compensation, or in particular to state the reasons why they do not consider making an offer – currently set at 60 days (or 30 days in special cases) after receipt by the insurance company of the support for request for compensation – extended by another 60 days. The extension only applies to the necessary intervention of an expert or forensic doctor for the purpose of assessing damage to property or persons after an accident. in Article 2 (1) of Directive 2019/2177 amending the Solvency II Directive.
3) Golden Power extended to the insurance sector
in areas of strategic importance (the so-called " Golden Power ") which includes, inter alia, the power of the Italian Government to impose special conditions on the acquisition of shareholdings, to prevent the adoption of certain corporate decisions and to oppose the acquisition of shareholding. In more detail, the Liquidity Decree extends the scope of the Golden Power to all sectors considered to be of strategic importance under Regulation (EU) 2019/452 establishing a framework for screening foreign direct investment in the Union. The aim is to allow the Italian government to control corporate transactions including potential hostile increases, not only in the traditional critical infrastructure and defense sectors, but also in other sectors, including insurance.
To ensure maximum effectiveness of related provisions, the reporting company acquisitions have been extended and the possibility for the government to proceed on its own initiative with the exercise of special powers if companies do not comply with the reporting requirements has been introduced.
IVASS first measures
On 17 March 2020, IVASS published a notice its first measures taken to support the activities of insurance companies and intermediaries following the epidemiological emergency of COVID-19.
In more detail, such a first set of measures relates to the following:
- The deadline for insurance companies to send the annual report on their distribution networks to IVASS has been extended to 29 March 2020.
- Home insurance
The permit for the insurance companies' mandatory adoption of the so-called reserved areas on their websites, fixed until 1 May 2020 according to IVASS Regulation no. 41/2018, has been extended until 1 July 2020; 24/2008 at the end of 60 days after the current semester, has been extended until 29 March 2020. This requirement would apply to EU insurance companies provided that they receive more complaints than 20 per calendar year.
On 23 March 2020 published IVASS, a second note concerning the granting by insurance undertakings of a temporary extension of the conditions laid down in Regulations No 24/2008 on customer complaint handling and No 41/2018 on transparency requirements vis-à-vis policyholders. In particular, companies may:
- respond to customer complaints within 75 days of receipt, instead of 45 days,
- respond to customer complaints within 75 days of receipt, instead for 45 days,
- respond to customer inquiries [019fss5] within 35 days instead of 20 days.
On March 30, 2020, IVASS adopted another set of measures to enable insurance market operators to deal with the inconveniences resulting from the measures taken by the Italian Government to limit the transmission of covid-19. In line with the recent initiatives taken by the European Insurance and Occupational Pensions Authority (EIOPA) and other authorities, IVASS extended the deadlines for compliance with Solvency II reporting, in line with the recommendations on supervisory flexibility regarding time limits for supervisory reporting and publication of insurance companies issued by by EIOPA on 20 March 2020. The purpose of such extensions is to enable insurance undertakings to concentrate their efforts on monitoring and assessing the effects of the covid-19 emergency and to ensure the continuity of operations during these difficult times and to offer operational relief by: to allow delays in reporting and publication. In line with the EIOPA recommendations, IVASS also identified the current situation as a "major development" under the Solvency II Directive and therefore emphasized the need for insurers to simultaneously publish the information referring to the turn of the year on 31 December 2019 or later, all appropriate information on the effect of covid-19 in the published information.
IVASS was also extended by 30 or 60 days, depending on the circumstances, certain time limits relating to compliance with some of the regulations, Thus issued circulars and letters to the market (e.g. 30 days for quarterly notification of controlling and significant shareholdings and for requests for information on insurance activities carried out to assess the risks of money laundering and terrorist financing in life-threatening companies; 60 days for quarterly communication and new codes for the types of assets linked to unit-linked insurance and index-linked insurance
IVASS also emphasized the need for insurance companies and intermediaries to concentrate their efforts on ensuring continuity of business, with a focus on facilitating customers' access to their services, and concluded that as part of the reorganization of the business in accordance with measures and recommendations, it plans its on-site inspection calendars and procedures for carrying out its supervision by promoting the use of electronic / telematic channels for institutional contacts and communication flows with supervised entities to ensure the smooth implementation of its institutional mission.  On 30 March 2020, in line with EIOPA's statement of 17 March 2020, IVASS also published a notice on its website stating that – in the light of the changing economic and financial environment due to the spread of the epidemiological emergency from COVID-19 which leads to high volatility international and European financial markets and the surrounding position that, at national level, the spread of the pandemic and the related effects on the Italian economy make the future development of the risk factors to which insurance companies are exposed – a letter had been sent to insurance and reinsurance companies based in Italy urged them to be extremely cautious in the distribution of dividends and in the payment of variable remuneration to company representatives at both individual and group level.
Finally, in a note published on 3 April 2020, IVASS recommended companies strive to ensure that insurance business continues to operate smoothly and in the interests of consumers, despite the exceptional nature of the situation and in particular:
- to provide customers with prompt and clear information on the organizational measures taken to ensure the continuity of services; and correct contractual relationships, by immediately reporting any operational changes and situations of impe for the regular management of relationships;
- to maintain specific evidence of possible obstacles to the regular conduct of business and the measures taken to protect the rights of customers who may affected by delays or inconveniences in the communication addressed to them, in order to enable an assessment of their possible exclusionary or mitigating effect in relation to the specific cases that may occur,
- to take due account of the difficulties that consumers may also encounter when they fulfill their obligations as a result of the measures taken to limit covid-19 infection.
Products and services developed by the Italian insurance industry to deal with the risks arising from covid-19
In their report which contains the results of the analysis of the identified trends The offer of insurance products and services for the second half of 2019 published on March 30, 2020, despite the observation period being covered in July / December 2019, IVASS also gives certain expectations regarding the products and services that the insurance sector develops to meet the risks arising from covid-19.
The insurance industry has in fact voluntarily activated a number of measures to provide support for the emergency situation. These include suspension, extension and deferral of life insurance premiums, non-motor damage and motor insurance cover, blocking of all measures to recover unpaid premiums and deductibles, extension of existing guarantees with "tailor-made" clauses, inclusion of daily allowances or compensation and standard allowances and new products. The insurance companies then took measures to counter the health emergency in various ways by examining offers and offering new products.
In more detail, a new policy has already been launched on the Italian market for the Italian municipalities that were originally affected by the epidemic, limited to the called the "red zone", created specifically to deal with the consequences of the spread of covid-19. The solution designed to meet the needs of small businesses was developed in a few days and responds to the growing demand that mainly comes from companies (shops, bars, services) that have been forced to close down and are subject to the restrictive measures introduced by the health emergency. Immediate support of a certain amount per day is guaranteed for a maximum of 15 days in the event of a closure ordered by the authorities.
Two companies, on the other hand, have temporarily extended guarantees and services already included in their insurance to their customers free of charge. The extensions are applied throughout Italy without territorial restrictions. An insurance is intended for families and prescribes daily allowance for hospital stays and payment of an amount for intensive care as a result of the diagnosis covid-19. For entrepreneurs who have already taken out commercial insurance that provides daily allowance for interruption of business (or who, if they are not already active, decide to purchase the above-mentioned daily allowance by 30 April 2020), a company has provided a temporary extension of coverage at no charge , even in the event of a total closure of activities ordered by the authorities as a preventive measure against covid-19.
In order to protect the population currently most affected by the virus, a company has extended the insurable age for health insurance from 65 to 75 For proven diagnosis of covid-19, in addition, daily allowance for hospital stay and convalescence is offered.
A company has doubled the compensation allowance for hospital stay for healthcare customers affected by covid-19 and is also encouraging. the use of digital services to facilitate the reduction of travel for its customers and to avoid exposure to infection.
Other initiatives t. audio or video conference contact, with initial consultation free of charge. In particular, it is possible to get information about smart work, teleworking and integrity, but not only. Experts also provide clarification on the measures to support companies and on the consequences of non-compliance with the terms of the contract. benefit of health insurance providing a hospital care allowance, of a daily allowance even in the event that the insured are forced into the quarantine regime, which resulted positively in the covid-19 sampling test.  In the travel sector, guarantees have in some cases been extended for reimbursement of costs loss of booked travel due to the blockade ordered by the airport authorities for the covid-19 emergency.
On 9 April 2020, the Italian Senate approved the text, which is transformed into law, with amendments, the Cura Italia decree and the Chamber of Deputies will now vote on its final approval.
The liquidity decree will be converted to the law by 7 June 2020, so there is room for changes and / or integrations of the measures contained therein, including those mentioned above.
IVASS, for its part, is still engaged in discussions with insurance market operators in order to balance the need to protect citizens, insured and interested parties and new measures are likely to be announced in the coming days.
Author by Silvia Lolli and Davide Valloni