IVASS – the Insurance Supervisory Authority – has issued twenty fines to Cattolica Assicurazioni SPA (formerly Società Cattolica di Assicurazione – Società Cooperative) and to its former business representatives and board members. The fines, totalling 1.9 million euros, follow a series of inspections that uncovered a number of governance improprieties. The measures are reported in the Institute’s latest December bulletin.
More specifically in terms of the Company, which was fined 200,000 euros by IVASS, the two identified irregularities concern: “the failure to properly exercise the prerogatives of governance, management and control of the administrative body, and the manner in which the duties carried out by the Committees for Corporate Governance and Sustainability, Appointments, Remuneration, Control and Risks, Management Control, and Internal Audit were exercised; the Board of Directors’ inability to ensure the necessary consistency between risks undertaken by the company and its overall solvency requirements, with subsequent effects on the adequacy, also in prospective terms, of its own funds; the shortcomings in risk assessment noted in the underwriting and management of certain investments; and the ineffectiveness of supervisory activities that failed to identify critical governance and risk management issues.”
With regards to proceedings against the company’s former officers, a total of 19 sanctions were imposed, such as those imposed on Paolo Bedoni, the then Chairman of the Board of Directors, for “irregularities identified during inspections at Cattolica Assicurazioni – in relation to his role on the Board of Directors, as Chairman of the Board of Directors, as well as Chairman of the Corporate Governance and Sustainability and Appointments Committees”.
IVASS also sanctioned other former members of the Board and former managers, including the Head of the Risk Management Division and Head of the Internal Audit Division, in relation to their respective roles, with fines ranging from 11,000 to 432,000 euros.
Last June, at the end of a year-long inspection, it had in fact been Consob (la Commissione Nazionale per le Societa e la Borsa) that fined the business’s former management a total of 620,000 euros, both to the company and to eight former members of the Board of Directors and Board of Statutory Auditors. The board members were accused of having presented the market with corporate governance structures that differed from what was reported in the 2019 and 2020 corporate governance reports, whilst the statutory auditors were found guilty of breaching their supervisory duties. In the public documents, Cattolica allegedly offered “a misleading reporting framework, omitting key information regarding the company’s actual practices, corporate governance structure and directors’ roles, as well as in relation to its non-compliance to several recommendations of the Corporate Governance Code for Italian Listed Companies, as promoted by the Borsa Italiana”.