IVASS CIRCULAR LETTER ON SIMPLIFICATION OF INSURANCE CONTRACTS

IVASS CIRCULAR LETTER ON SIMPLIFICATION OF INSURANCE CONTRACTS

On April 18, 2018 IVASS issued a circular letter addressed to EU insurance undertakings acting in the Italian market on a free of services basis regime and under the right of establishing a branch regime, in order to push them for implementing the guidelines on simplification of insurance policies circulated by the ANIA on March 6, 2018 and developed by a worktable including insurance undertakings, insurance intermediaries and consumers’ organizations.

The guidelines define a new structure for insurance contracts, more clear and understandable, also in language, with the aim of promoting consumers understanding and exercise of their rights.

Timetable:

The implementation of these guidelines is also supported by a letter to the market on March 14, 2018 by IVASS, which includes the following timetable for the contracts revision according to the guidelines:

  1. within January 1, 2019, with reference to new insurance products;
  2. in the course of 2019, with reference to the already marketed insurance products.
Main Contents:

In a nutshell, the above guidelines include the following main criteria:

  • The distinction between General Conditions and Special Conditions should be replaced by the articulation of the contract in sections. If necessary, sections must be divided into chapters.
  • The glossary/terms should be simplified.
  • The guidelines require different fonts for some types of clauses and allow the presence of explanatory and consultation boxes (or pop-up windows in case of electronic documents).
  • With reference to the contractual structure:
    1. the commercial name of the product should be indicated and not be deceptive;
    2. the product should have a cover showing any indication useful to individuate the product as well as the insurance company, including name and logo of the undertaking, the nature of insurance product and its commercial name;
    3. a clear presentation page is also suggested;
    4. the table of contents has to be intelligible.
  • The certificate of insurance should include all the data concerning the insurance company, the policyholder, the beneficiary as well as all the guarantees. Optional guarantees must be indicated.
  • Every guarantee provided should have its own section and the object must be exposed in a clear and immediately understandable form.
  • The criteria to evaluate the damages must be drafted in a clear, unambiguous and objective form as well as the criteria to assess and to liquidate any damages.
Other provisions:

In the IVASS Circular Letter dated March 14, 2018 it is provided that insurance undertaking must:

  • indicate on the cover of their products that the latter have been revised and,
  • communicate to the IVASS, as from January 1, 2019 on a quarterly basis, which ones have already been revised.

The IVASS requested the insurance undertaking also to specify, in the revised policies concerning products other than car insurance liability, the time limit to liquidate the damages to the insured party.

For further information:

Please contact: Avv. Gianfranco Santojanni and Avv. Alessandra Morandini, CSV Legal, Milan Office

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