Insurance trade | The Millburg Decree, Brexit and Insurance

Also this year, the Italian government approved the so-called Milleproroghe Decree (Legislative Decree 183/2020, published in the Official Gazette on December 31, 2020), which contains important provisions affecting the world of insurance.

As part of this contribution, we will focus on the issue of Brexit and thus on the scope of Article 22 of the aforementioned decree. Extension and other measures applicable to banking and financial intermediaries and insurance companies in connection with the UK’s withdrawal from the European UnionWe limit our analysis to this last aspect (insurance companies).

Before proceeding, we specify, however (1), that the law is inspired by what was already provided by the legislator in 2019 in the context of Legislative Decree 22/2019, which was transformed with amendments by Law 41/2019 (see Article 9 dictates) on the subject of Operations in Italy of British insurance companies after the date of withdrawal); And (2) that the case was and is still the subject of attention and procedures of the Supervision Institute, as evidenced, among other things, by the press release posted on its website on January 15th.

Legislative goals

The aim of the legislature was to regulate the operations of insurance companies located in the United Kingdom and Northern Ireland after the end of the transaction period (December 31, 2020), which followed the withdrawal of the United Kingdom itself by the European Union, which, as is known, entered into a partnership agreement (Brexit deal).

We recall that during the transition period, community law continued to be applied in the United Kingdom and was treated in all respects as a member of the Federation, subject to exclusion from participation in the institutions and structures of governance.

Back to us the aforementioned art. No. 22 of the Milleproroghe Ordinance (Paragraph 6) begins by stating that companies with their headquarters in the United Kingdom and Northern Ireland, which at the end of the transitional period were permitted to carry out insurance activities in Italy under the Articles of Association or Freedom to Provide Services, from the day following that date, From the list of companies that have a registered office in another member state that maintains themEvas.

The rule goes on to clarify that, after the end of the transition period, the companies involved can continue to operate within the boundaries of running contracts and coverages as of December 31, 2020 with a ban on entering into new contracts. The ban also extends to the renewal of the existing ones, until they expire or any other period mentioned in the plan that companies must submit to IVASS, which we will discuss shortly. From a temporary continuation of activity, IVASS must present sufficient evidence to the public.

Required procedures and established rules

Paragraph 7 states that the aforementioned companies must take a series of measures. The same, respectively, within 15 days (January 15, 2021 – the deadline has already expired) and within 90 days of the end of the transition period (March 31, 2021), you must: (1) inform policyholders, document holders and beneficiaries of the operating system applicable to them (Even with a connection on your site); (2) Submit a plan with measures for prompt and correct implementation of contracts and coverages in progress on that date, including claims payments.

Warning! Paragraph 9 that follows states that UK and Northern Ireland companies, pending the interim prosecution period, remain subject to the discipline set forth in the article. 193 of the Private Insurance Law, which provides for the coordination of the work of the various supervisors, i.e. the country of origin and the country of the facility’s location, or the activity in providing services for free and any other provisions related to insurance, including those related to penalties.

The provisions of Cap (Article 10, Paragraph 8) are then applied, on the basis of which, in the context of cooperation agreements and on the condition of reciprocity and equivalent confidentiality obligations, IVASS can exchange information with the competent authorities of third countries with in relation to the European Union (in our case the Kingdom United of Great Britain).

Italian customers and companies

From the end of the transition period, the contractor can withdraw from contracts with a duration of more than one year without additional fees, by providing written notice to the company, or by practicing other forms of termination of the contractual obligation

The provisions of implicit renewal lose their effectiveness and the withdrawal of the contracting party shall take effect from the expiration of the first year following the date of the withdrawal itself.

Italian insurance or reinsurance companies that, at the end of the transitional period, were permitted to engage in insurance or reinsurance activities in the United Kingdom and Northern Ireland under the Articles of Association or the freedom to provide services, may continue to carry out their activities, without prejudice to the provisions of the rules contained in the maximum Regarding doing business in a third country (Article 22 regarding insurance business and Article 59-V regarding reinsurance business) and in accordance with the provisions of the United Kingdom.

Briefly

The Milleburg Decree on Insurance and Brexit regulates:

Cancellation of companies in the United Kingdom and Northern Ireland licensed to engage in insurance activities in Italy under the Articles of Association or Freedom of Services upon the end of the transitional period from the list of companies with a registered office in a third country;

Corporate temporary operations limits;

The information duties of the companies towards the contracting parties, the insured, the eligible persons, IFAs and what Italian regulations they are subject to pending the period of temporary continuation of activities;

The rights and powers of policyholders stipulated with companies;

Doing business by Italian insurance and reinsurance companies authorized to operate under the Articles of Association or Freedom to Provide Services in the United Kingdom and Northern Ireland at the end of the transition period.

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