Brexit and insurance: Latest government provisions for UK undertakings in Italy

On 31 December 2020 the Italian Government issued the Law Decree No. 183 (the so-called Milleproroghe for 2021). The Law Decree entered into force on the same date and contains several provisions on various matters, including some regarding Brexit.

In particular, paragraphs 6-9 of Article 22 which are examined below regulate the activity in Italy under the FoS and/or the FoE regime of insurance undertakings with registered offices in the UK after the expiry of the transition period on 31 December 2020, largely taking up the same provisions already set forth by Article 9 of the Law Decree No. 22/2019 converted, with amendments, by Law No. 41 of 20 May 2019.

What happens to UK undertakings authorized to carry on insurance business in Italy under the regime of establishment or free provision of services? [Article 22(6)]

• They are removed from the Institute for the Supervision of Insurance (IVASS) Register of insurance undertakings licensed in Italy.
• They are entitled to manage contracts in existence as of 31 December 2020.
• They are not allowed to enter into new contracts, nor renew existing ones.

IVASS shall give evidence to the public of the temporary continuation of such kind of activity.

At the moment, IVASS has not issued any specific additional communication or measure on the above. IVASS’ last press release dates back to 10 November 2020.

What are the information duties for UK insurance carriers? [Article 22(7)]

• By 15 January 2021 they must inform policyholders, insured persons and other persons entitled to insurance benefits of the operating regime applicable to them in respect of the management of the contracts in existence, also by means of a communication on their institutional website.
• By 31 March 2021 they must submit to IVASS a plan containing the measures enabling them to expeditiously and properly execute the insurance contracts in force as of 31 December 2020, including the payment of claims.
• They must provide IVASS with an annual report on the progress of the implementation of the plan.

Which provisions are UK insurance carriers subject to during the period of temporary continuation of business? [Article 22(9)]

• Article 193 of the Italian Insurance Code (in the matter of IVASS’ supervisory authority).
• Any other provision on insurance matters, including the provisions of Title XVIII of the Italian Insurance Code (in the matter of fines).
• Article 10(8) of the Italian Insurance Code, according to which IVASS “may exchange information with the competent authorities of States outside the European Union.”

Which are the policyholders’ rights after 31 December 2020? [Article 22(8)]

• Policyholders of insurance contracts issued by UK undertakings with a duration exceeding one year may withdraw from them with no charges upon written notification to the insurer.
• Policyholders may rely on any other termination provisions set forth by the relevant contract.
• Tacit renewal clauses shall no longer be enforceable.
• Policyholders’ withdrawal shall take effect on the expiry of the first annuity following the date on which the withdrawal is exercised.

The insurance regulatory teams in our offices in Italy and UK are of course available for further information.