Italian Supreme Court on double track theory

The Italian Supreme Court recently published Order no. 26079/2025, ruling on a unit-linked policy concluded 2011. The Supreme Judge indicated which regulations should apply to unit-linked policies executed at that time, in light of the nature of the products.

The Supreme Court established that the strict investor protection rules under legislative decree no. 58/1998 (the Consolidated Law on Financial Intermediation or TUF) should apply, regardless of who sells the unit-linked products. This is in light of the legislation applicable at that time to unit-linked products as they’re generally considered to have a robust financial nature.

According to the Italian Supreme Court, this ruling aims to dismantle the “double track” theory. This theory states unit-linked products are subject to slightly different rules of conduct by the intermediary, depending on who distributes them, ensuring uniform and robust protection for all policyholders.

 

Factual background

The claimant, a housewife without income, purchased an insurance policy and paid a single premium of EUR50,000 in 2011. The product was initially presented as a safe investment. It was a unit-linked policy, whose value depended on the performance of an investment fund.

Soon after, the fund began to experience liquidity problems, lost around 40% of its value and was eventually suspended.

The claimant asked for the policy to be surrendered, but the request went unanswered. She decided to sue both the insurance company and the intermediary who distributed the policy.

The claimant argued that the insurance contract was null since she never received a copy of the framework agreement (as requested for financial products by art. 23, para. 1 of the TUF, recalled also by art. 25-bis, para. 1 of the same). But she only received the policy certificate and a document attesting that the policy proposal was being processed. The claimant also argued that the intermediary who distributed the product didn’t comply with the rules of conduct required by art. 21, para. 1, lett. a) of the TUF and by CONSOB Regulation no. 16190/2007.

The claimant also claimed damages.

The first-instance court rejected the nullity claim but awarded damages, holding the insurance company and intermediary jointly liable. The Court of Appeal confirmed this decision.

 

The “Double Track” theory and appeal before the Italian Supreme Court

Both the insurance company and the intermediary appealed to the Italian Supreme Court. They asked the court to rule on:

• whether the policy had a financial or insurance nature;
• whether the rule of the TUF applied in this case;
• the so-called “double track” theory, based on which the Supreme Judge had to assess which conduct rules should apply based on the different distribution channel (ie if the policy is sold by banks or investment firms, the TUF applies since these intermediaries are under CONSOB supervision. If it’s sold by traditional insurance intermediaries – agents and brokers – only the Code of Private Insurances applies, under IVASS supervision).

 

Supreme Court’s decision

The Supreme Court confirmed that unit-linked policies like those sold in 2011 are classified as financial products under Italian law regardless of the distribution channel.

The court rejected the “double track” theory and stated that both insurance companies and intermediaries should have complied with TUF obligations in 2011, regardless of the channel of distribution (considering the legislation in force at that time).

Finally, the Supreme Court indicated that the protection of the investor/policyholder was at the time of the sale of the policy paramount, and that the complainant should have received complete and clear information on the products, as required by the TUF and, in particular, by articles 21 and 23, recalled by art. 25-bis.

The court grounded its reasoning on the fact that, at the time the policy was sold, it would have not be logical to offer different levels of protection depending on whether the policyholder dealt with a bank or an insurance intermediary.