With a new Law Decree issued on 31 December 2020 (Decreto Legge 31 Dicembre 2020 N. 183), the Italian Government has set – amongst several others – some important rules on operations and activities in Italy of UK-based Insurers after 31 December 2020 i.e. after the end of the Brexit transition period (as provided by the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union signed on 24 January 2020).
The Decreto Legge – in the light of the peculiar situation and of the need for urgent and immediate measurers following the UK withdrawal from the EU – allows UK insurers some room to carry out certain activities, subject to a number of limits and requirements. In particular, according to Article 22 of the Decreto Legge:
1. UK Insurers which, at the end of the transition period, are authorized to carry out insurance activity in Italy under the right of establishment or freedom to provide services will be removed, from such date, from the IVASS register of EU Insurers referred to under article 26 of the Italian Insurance Code (“IIC”).
2. However, such UK insurers, after the end of the transition period, will continue their activity limited to the handling of contracts and policies pending as at such date (…nei limiti della gestione dei contratti e delle coperture in corso a tale data…), without underwriting new contracts or renewing existing policies, until their natural expiry date or until the deadline provided for by the “plan” referred to at iii. (b.) below. IVASS will properly inform the market of the temporary contract management activity by such UK Insurers.
3. Such UK Insurers:
- Within 15 days from the end of the transition period (and so by 15 January 2021), must inform – also by publication on their website – policyholders, insureds and other beneficiaries of insurance services of the regime applicable to them.
- By 90 days from the end of the transition period (and so by 31 March 2021), must file with IVASS a plan containing the management measures allowing such undertakings to properly and promptly perform contracts and coverages pending at 31 December 2020, including the payment of claims.
- Must then file with IVASS an annual report as to the implementation of the plan under let. b above.
4. As of the expiry of the transition period, policyholders and insureds have the right to unilaterally (and with no cost) terminate any existing contract whose duration exceeds one year, by giving written notice to the relevant UK Insurer. Such termination will be effective at the end of the yearly policy period which is running on the termination notice date. Automatic/tacit renewal clauses included in existing policies will be ineffective.
5. The provision of Article 193 of the Insurance Code (essentially providing for the regulatory control over EU insurers) and any other insurance provision (including sanctions referred to in Title XVIII of the Insurance Code) relevant to the same will continue to apply to such undertakings during such period of temporary contract management activity.
6. Italian undertakings which, at 31 December 2020, are authorized to carry out insurance or reinsurance activity in the territory of the United Kingdom under the right of establishment or the freedom to provide services will continue to their activity, without prejudice to articles 22 and 59-quinquies of the Insurance Code and in compliance with the laws of the United Kingdom.
No specific provisions are instead laid down by Art. 22 of the Decree with regard to insurance and reinsurance intermediaries authorized to carry out insurance activity in Italy under the right of establishment or the freedom to provide services.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.