NEW ISVAP REGULATION N°32/09
In June 2009 ISVAP issued Regulation n. 32 concerning index linked policies. Following the numerous previous interventions (Circular letters n. 332/98; n. 451/01; n. 507/03; n. 551/05), aimed at protecting the insured persons, ISVAP introduced new provisions and principles with regards to admissible indexes, modality of indexation and investment management for risk cover. In particular, the regulation contains the following innovations:
- - The admissible index, the insured amount and the amount in case of surrender of the policy may be linked only to "external" securities indexes and not to specific assets hold by the insurance company. Furthermore, only stock, bond or inflation indexes are considered admissible indexes, provided that they correspond to the specific criteria set forth in the Regulation (Title II).
- - The cover for the technical reserves are not guaranteed automatically by the possession of an "internal" parameter, but shall be created by acquisition of assets suitable to repeat the pay off for the performance provided in the policy. In fact, insurance companies are requested to cover the technical reserves by investing directly in the assets forming the stock or any other index (Title III).
- - Generally, ISVAP stated the principle according to which the insurer shall not charge to the insured person any risk that could not be taken over by the company itself.
- - Title IV contains provisions concerning the demographical risk and solvency requirements requesting, inter alia, a stronger interdependency between the performance and the evaluation of the demographical risk.
- - With the provisions set forth in Title V ISVAP modified the regulation in force concerning technical reserves and client's information obligations.
- - Title VI extends the application of the provisions concerning index linked policies to unit linked products which are directly linked to UCITS indexed according to predefined algorithms.
Except for the provision contained in Article 8 of Title III (related to limits of concentration), Regulation n. 32 will become into force on 1 November 2009.
Finally, it shall be pointed out that Titles II and VI apply also to companies with head offices in a Member State and operating in Italy under the services or the establishment principle.
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