In the year that is now behind us, this tradition has once again been respected due to the enactment of Decree Law No 183/2020. From the eviction blockade to the Istituto Luce Cinema Bonds, from the health emergency, smart working, procurement, healthcare to schooling, a topic of distinctly insurance-related interest deserves our attention and concerns the temporary operation of British insurance undertakings post-Brexit.
The transaction period and the Law Decree "Milleproroghe" of 31 December 2020 no. 183
As is well known, on 24 January 2020, the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union was signed, stipulating that the so-called transition period will end on 31 December 2020.
As expected, with Law Decree No. 183, published on 31 December 2020 (the "Decree"), the Italian Government has established a number of important provisions relating to the business carried on in Italy by insurance undertakings with registered offices in the United Kingdom.
Article 22 of the Decree and the provisions relating to British Insurers
The Article 22, paras 6 to 9, of the Decree allows British operators (i.e. insurance undertakings with their registered office in the United Kingdom ("UK Insurers") to continue conducting certain activities in Italy and stipulates that:
i. UK Insurers - authorized to carry out business in Italy under the freedom to provide services / right of establishment regime pursuant to Articles 23 and 24 of the Italian Code of Private Insurance (the "Code") - are removed from the IVASS register of EU Insurers referred to in Article 26 of the Code.
ii. UK Insurers can continue their activity limited to the handling of contracts and policies pending as at such date (i.e. 31.12.2020) without underwriting new contracts or renewing existing policies, until their natural expiry date or until the deadline provided for by the company as set forth in the plan provided by para 7, letter b) of the same Article 22.
IVASS will properly inform the market of the carrying out of such a temporary activity;
iii. UK Insurers:
a. Within 15 days from the end of the transition period, must inform policyholders, insureds and other beneficiaries of insurance services of the regime applicable to them;
b. 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 on that date, including the payment of claims;
c. file with IVASS an annual report as to the implementation of the plan.
iv. 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 (with effect as from the expiry of the first annuity following the date of exercise of termination, or by exercising other forms of termination;
v. At any rate, the provision of Article 193 of the Code and any other insurance provisions (including those under Title XVIII of the Code) will continue to apply to UK Insurers during such period. Article 10, para 8, of the Code shall apply likewise.
Italian insurers operating in United Kingdom
Pursuant to para 10 of Article 22 of the Decree, Italian undertakings which, at the end of the transitional period, 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 regime will continue to carry out their activity, without prejudice to articles 22 and 59-quinquies of the Insurance Code and in compliance with the laws of the United Kingdom.
The Decree does not set forth any specific provision applicable to insurance and reinsurance intermediaries operating in Italy (under the right of establishment or the freedom to provide services regime).
On 15 January 2021, IVASS published a note highlighting the provisions set forth under the Decree, particularly with respect to duties lying on UK Insurers and rights allowed to consumers.
Authors: Matteo Cerretti, Mauro Modica and Sabrina Palermo.
