Insurance Focus (Italy): Investments covering technical provisions

Insurance Update


The draft regulations on investments and assets covering technical provisions (consultation document no. 26/2015) were published on the IVASS (Italian Insurance Supervisory Authority) website on 16 December 2015.

The scope of the draft regulations is to implement in full (i) the new provisions introduced in this regard in the Italian Insurance Code (arts. 37-ter and 38) following the transposition of Solvency II Directive with Decree no. 74/2015, and (ii) the EIOPA guidelines in this field.

Observations and proposals on the draft regulations may be sent to IVASS no later than 15 February 2016.

The main changes introduced by the regulations with respect to the current provisions in this regard, are the following:

  • introduction of the prudent person principle when selecting investments and assets covering technical provisions;
  • elimination of the quantitative and eligibility restrictions relevant to assets covering technical provisions (with exception of the restrictions specifically provided for the lending  activity, given the complexity and risk involved);
  • strengthening the internal controls system.

The framework resolution on investments (adopted by management body and reviewed at least once a year) will define the investment strategies, the principles for management of assets and liabilities as well as the liquidity risk management policy.

The top management is responsible for implementing, maintaining and monitoring the investment management policies, while the supervisory body is responsible (amongst other things) for substantiating the compatibility and consistency of the policies in question with respect to the risk profile of the company and its financial position.