In Italy, the main sources of insurance and reinsurance law are:
The regulatory body is IVASS, a department of the Bank of Italy. IVASS issues regulations aimed at operators in the insurance sector characterized by high technicality, offering detailed guidance not typically found in primary sources. In addition to formal regulations, IVASS employs soft law instruments, such as communications, letters to the market, and circulars, to provide recommendations and guidelines to the industry.
Secondary regulatory sources, not issued by IVASS, are represented by government or ministerial decrees that regulate specific matters, such as requirements relating to professionalism, integrity and independence, guarantee funds and motor vehicle civil liability. This regulatory framework serves to provide precise guidance to insurance sector operators with regard to:
Pension funds, and some life policies with substantial financial components like index-linked products, are subject to the supervision and control of both IVASS and of the Commission for the Supervision of Pension Funds.
In Italy, only public companies, co-operatives and mutual insurance companies, or equivalent European or foreign companies, can write insurance and reinsurance business. Authorisation from IVASS is a prerequisite, contingent on the (re)insurer demonstrating that it has the minimal share capital or guarantee fund stipulated by the Private Insurance Code and that it has met additional requirements for authorisation set forth in the existing regulatory framework.
In Itay, premiums are not subject to VAT.
For non-life insurance, Law No 1216 of 29 October 1961 provides for an insurance tax, the amount of which varies for each class of insurance. In the context of life insurance contracts, financial profits, per Article 26-ter of Decree No 600 of 29 September 1973, are subject a 20% capital gains tax.
However, premiums and life policy revenue taxation in Italy is further complicated by a number of further norms. Seeking professional advice is advisable due to potential fines and sanctions that may be imposed by the tax authorities.
Only licensed or authorised (re)insurers can provide (re)insurance in Italy, therefore no unlicensed activities are permitted and IVASS is quite active in reviewing any applications for licenses and/or recognition of overseas licenses through EU passporting.
After Brexit and the end of the transition period (which lasted until 31 December 2020, during which European legislation continued to apply to the United Kingdom as if it was still a member state), IVASS imposed obligations on UK insurance companies to:
Fronting is permitted, and the terms, conditions and premiums are dictated by the reinsurer. The fronting company acts as the direct insurer – the only one that remains obliged towards the insured for the entire risk – regardless of whether the reinsurer will accept and indemnify the claim or not. The fronting company receives a commission for this service, called a “fronting fee”.
Any mergers between insurance companies or acquisitions of insurance portfolios in Italy are subject to IVASS’s prior authorisation. However, the Italian Antitrust Authority shall also give its preliminary authorisation if the merger or portfolio acquisition results in an insurance corporation having a position of market dominance. The incorporating company or the new company resulting from the merger must have the necessary solvency margin, taking into account the merger and the consolidated liabilities.
Controls on investments in or the acquisition of (re)insurance companies generally focus on ensuring compliance with anti-money laundering provisions and public policy, and approval by IVASS. The latter involves an assessment of the merger, the new memorandum and articles of incorporation, and verification that the officers and directors of the acquirer or new company meet professionalism and integrity standards.
The intermediaries usually distribute insurance products, but in limited cases the insurance product can be acquired directly from the (re)insurer. To operate legally, insurance intermediaries must be registered with the Sole Register of Insurance and Reinsurance Intermediaries (RUI), established under the Private Insurance Code and governed by ISVAP Regulation No 5/2006. RUI is divided into sections, as shown below, and no intermediary may be listed in more than one section:
The Civil Code sets out the rules for insurance contracts and their negotiations, whereas IVASS Regulation No 41 of 2 August 2018 contains provisions regarding pre-contractual information, advertising and creation of insurance products in accordance with the Code of Private Insurance. Within this legal framework, the culmination of an insurance contract occurs at the final meeting of the parties’ will. This process begins with the potential insured proposing a risk, typically accomplished by completing a proposal form provided by the insurer. Subsequently, the insurer evaluates the risk based on the information received and provides a quoted premium.
The proposal form serves as the cornerstone of negotiations between the parties, and all information requested by the insurer in this form is considered essential by the court. Consequently, any omission or false statement in response to a question is automatically deemed as willful misrepresentation.
Generally, these rules apply uniformly to both consumer and commercial contracts. However, in cases of negligent non-disclosure, courts may be more inclined to consider misrepresentations made by a consumer in a more lenient manner.
The prospective insured is obliged to provide truthful and complete responses in the proposal form to avoid sanctions, including:
Insurance agents and direct canvassers are usually considered to be acting for the insurer, and if they have a power of attorney, they formally represent and engage their principal.
The broker, and their independent collaborators, represent the client by assisting them in identifying their needs, submitting their risks to the companies and obtaining the best market conditions for them, and usually take part in the loss adjustment process.
Banks, financial intermediaries pursuant to Article 107 of the Consolidated Banking Law, stock-broking houses and Bancoposta are usually considered independent third parties, but their status can be altered by the terms and conditions of the insurance agreement.
Insurance contracts can be verbally stipulated, but must be evidenced in writing in accordance with Article 1888 of the Civil Code. To be valid, an insurance contract must have an insurable interest so that the consequent risk must be an actual, and not supposed, risk. The minimal terms and conditions must set out the insured party, the risk, the period of insurance efficacy, the premium charged and the exclusions.
The essential parties in an insurance contract are the insurer, the policyholder and the insured, which may or may not be the same individual. Parties who, according to the contracting party, have a contractual lien upon the indemnity, such as mortgagers, may also be named as additional parties to the insurance contract.
Disclosure obligations primarily rest with the contracting party. However, if the contract covers multiple people or things, any misrepresentation or omission affecting only one person or thing will not necessarily invalidate the entire contract.
The position does not differ with regard to consumer contracts or reinsurance contracts.
In Italy, ART transactions generally involve two main areas:
As a result, ART transactions, depending on the specific risk at stake, can be qualified as insurance or reinsurance contracts.
If an ART transaction is written in another jurisdiction as reinsurance, as is typically the case with industry loss warranties (ILWs), it will also be regarded as a reinsurance contract in Italy and subject to the specific reinsurance regulation provided for by the Code of Private Insurance.
Insurance contracts in Italy follow the same interpretation principles outlined in the Civil Code (Articles 1362 through 1370), akin to any other contracts. The primary objective is to identify the common intention of the parties. This does not require a precise historical reconstruction of their will, but rather focuses on what their objectively expressed desires seem to be, as reflected in the contract wording.
Additionally, depending on whether the insurance contract has been drafted by the insurer as a standard contract or whether the policy wording has been actually negotiated between the parties, possibly with broker involvement, there are some significant differences in the interpretation of the contract.
In the first case, where the standard policy uniformly regulates a number of contractual relationships principally with consumers, the basic principle is the contra proferentem rule; in the second case, no diversion from the hermeneutic rules outlined in the Civil Code is allowed.
Apart from all risk insurance contracts, where the warranty is determined by the policy exclusions, in an Italian insurance contract the warranties are expressly described and limited by the contractual terms and conditions and, in particular, the clause describing the risk, scope and object of the contract.
In an insurance contract, all terms and conditions are relevant, and a breach of any may lead to the lack of operativity of the policy, contingent upon the gravity of the breach. However, special attention is given to conditions precedent, known as “condizioni essenziali” in Italian. These are clauses that signify the critical importance attached by one of the parties to their fulfilment. If breached, these conditions trigger, by operation of the law, the lack of operativity of the insurance contract, unless the party chooses to keep the contract in force.
The “simple and clear contracts” guidelines, jointly developed by the National Association of Insurance Companies (ANIA) in collaboration with associations of agents, brokers, and consumers, aim to create insurance contracts in simple language. According to these guidelines, contracts have to incorporate icons, boxes, and examples to illustrate the calculation of predictable compensation in case of an accident. Notably, the guidelines emphasise the use of bold font or colour to draw the insured’s attention to conditions of particular importance, such as conditions precedent.
Coverage disputes under Italian insurance contracts, whether consumer, commercial, or reinsurance, typically follow a consistent path:
Efforts to preclude disputes over jurisdiction and choice of law in insurance contracts are commonly achieved through contractual provisions. These provisions, established by mutual agreement of the parties, explicitly specify both the applicable law governing the insurance contract and the territorial competence of the court tasked with resolving any controversies related to interpretation, breach, and execution of the insurance terms
However, in scenarios where the parties have not expressly chosen the jurisdiction and applicable law, specific EU regulations come into play in insurance disputes:
In the event that mandatory mediation fails, parties involved in insurance disputes have the option to initiate legal proceedings or call for arbitration as stipulated in the policy’s “jurisdiction and choice of law clause”. Proceedings today are all in electronic format, and in compliance with the Legislative Decree No 149 of 10 October 2022, (commonly known as the Cartabia Reform), proceedings unfold as follows:
If a definitory order is not issued and discovery has been concluded in accordance with Article 275 of the CPC, the chairman of the court follows a specific timeline for further proceedings per Article 189 of the CPC:
After these stages, the oral pleadings might also take place at the scheduled hearing. Subsequently, the court is expected to publish the final sentence within the following 60 days.
Court judgments have immediate effect and can be enforced against the losing party while an appeal is still pending. The enforcement of the judgment must be preceded by the notification of a writ of injunction, which if not fulfilled by the debtor within the following ten days from notification allows the forced execution of the sentence upon the debtor’s assets and real estate.
Arbitration clauses in commercial insurance and reinsurance contracts are regularly enforced if properly drafted with clear indication that all disputes – including non-contractual ones – arising out of, related or connected to the insurance contract shall be settled by arbitration decided by a sole arbitrator or a bench of arbitrators, appointed in accordance with the rules of a specific chamber of arbitration that must be specifically identified.
In Italy, the arbitration award holds binding force on those parties who have defaulted, provided that they were duly invited and allowed to participate. If the defaulting parties do not comply spontaneously, the interested party can request the court to declare the award enforceable through a straightforward and swift procedure.
In Italy, the two ADR procedures that are relevant to the insurance market are:
Should out-of-court negotiations fail between the insured and the broker on one side, and the insurer(s) on the other, the dispute must be mediated in accordance with the provisions of Article 5 (I bis) of Legislative Decree No 28/2010 unless it is a motor liability insurance claim, in which case the assisted negotiation procedure must be completed pursuant to Article 3 of Legislative Decree No 132/2014 converted into law No 162/2014.
To start or join mandatory mediation or an assisted negotiation procedure, the parties must be assisted by a lawyer.
Both mediation and the assisted negotiation procedure can either succeed or fail:
In both scenarios, a formal document called “negative minutes” will be drafted. These minutes serve as valid evidence to fulfil the admissibility requirement for filing a lawsuit in court.
Italy does not allow punitive or exemplary damages; therefore, insurance products do not provide coverage for these sanctions in Italy but sometimes a derogation is provided for punitive or exemplary damages legitimately awarded abroad.
However, some form of sanctions might be awarded against insurers if they do not appear or fail to seriously engage in meditation or assisted negotiations, namely in the form of extra defence costs awarded to the successful insured.
Late payment of claims allows the insured to claim interest. Interest rates may be applied at the current yearly rate of 5% on capital. Interest for delayed payments may be applied at the current yearly rate of 12% on the capital from the date on which the writ of summons was served upon the defendant, with the possibility of simultaneously applying monetary revaluation according to the well-known binding precedent of the Supreme Court of Cassation No 1712/1995.
In Italy, when an insurer improperly delays settling a claim, there are potential last-resort remedies to hold them accountable. The insurance regulator (IVASS) can impose fines on insurers who fail to adhere to the regulatory timeframes for handling certain class of insurance as motor insurance claims.
Additionally, courts can impose sanctions under Article 96 of the Civil Procedure Code. If an insurer engages in vexatious or frivolous litigation to further delay the settlement process, the court may award a lump sum payment to the aggrieved policyholder, in addition to full compensation for the claim itself.
Under Article 1916 of the Civil Code, any insurer that has indemnified a claim automatically assumes the rights of the insured against any third party up to the amount of the indemnity paid. This legal concept is known as subrogation.
The scope of subrogation extends to both substantial and procedural rights. This means the subrogated insurer can either launch its own subrogated recovery action or in accordance with Article 111 of the CPC intervene in the litigation initiated by the insured against the liable party, subject to the statute of limitations applicable to the insured’s original claim. If the insured’s rights have expired due to time constraints, the insurer cannot pursue subrogation. Furthermore, any defences or objections that could have been raised against the insured can also be raised against the subrogated insurer.
To succeed in a subrogated recovery action, the insurer must prove three key elements:
In Italy, the insurtech sector is a dynamic and integral part of the insurance industry, contributing significantly to its growth. Digital insurance, a key driver of this evolution, is expected to propel the market from EUR145 billion in 2020 to at least EUR250 billion by 2030, with the digital segment itself rising from EUR1.9 to EUR30 billion. A substantial portion of this growth will be fuelled by embedded insurance. By 2030, estimates predict Italy’s embedded insurance market alone to reach EUR60 billion.
According to a survey and mapping conducted by the Italian Insurtech Association (IIA), using data from the Company Register, as of May 2023, a total of 111 startups are operating in the insurtech field in Italy.
The products offered by insurtech companies cover a broad spectrum, including security and recovery related to cyber risks and prevention of data fraud. Insurtech firms are involved in marketing and distributing insurance contracts via the web or embedding them in other contracts. Additionally, they assist insurers in stipulating electronic contracts and in the claims handling process, ranging from loss adjustment to the payment of settled claims.
IVASS is actively engaged with the insurtech sector. Its proactive approach involves not only supervising startups and their products but also intervening in the IT sector to ensure compliance and innovation.
As an example, IVASS Regulation No 20/2008 for IT imposes on insurers and reinsurers the implementation of internal controls, risk management, compliance, and outsourcing measures. Additionally, IVASS ensures adequate compliance with simplified procedures for signing insurance contracts, such as those provided by Articles 33 and 34 of Law Decree No 34/2020. According to these articles, policyholders can conclude insurance and financial contracts using a non-certified email address or other suitable electronic tools.
More recently, on 23 November 2023, IVASS issued a letter to insurance underwriters, informing them that the National Register of the Resident Population became active via the National Digital Data Platform and invited life insurers to access that database at least once a year to verify deaths among their policyholders, offering a streamlined approach to managing dormant policies.
Climate change, though not classified as an emerging risk, has taken centre stage following the devastating losses experienced by Italy in 2023 due to meteorological events, including unprecedented occurrences like micro hurricanes in the Mediterranean area. Another key focus is the impact of increased longevity, reshaping traditional insurance risks such as personal accident coverage, medical expenses insurance, and life policies.
Catastrophe risks linked to climate change have gained prominence in Italy to the extent that the government intervened through the 2024 Budget Law, making catastrophe risk insurance policies mandatory from 31 December 2024. The law obliges companies in Italy to procure insurance policies covering damage to their land, properties, contents, and goods. This coverage specifically addresses losses directly caused by specified natural disasters and catastrophic events within the national territory. Non-compliance may result in companies being excluded from state aid for losses exceeding their policy limits.
Legislative Decree No 149 of 10 October 2022, implementing the reform of the Civil Procedure Code (the “Cartabia Reform”), came into full force and effect in 2023. The reform is designed to reduce the average duration of proceedings by leveraging digital tools and fostering greater efficiency and procedural clarity.
Impacts and Innovations in the Italian Insurance Market: Climate Mandates, the Insurtech Surge and Civil Procedure Reforms
In the past 12 months, the Italian insurance market has experienced the acceleration of a variety of trends due both events connected to climate change and the reform of Italian civil procedure carried out to meet the country-specific recommendations that the European Commission addressed to this country back in 2020, inviting it to increase the efficiency of its civil justice system. This article will explore some of the key trends and developments in detail.
The duty to stipulate insurance contracts to cover damage caused by natural disasters and catastrophic events
The growing threat posed by climate change has impacted the Italian economy in different and substantial ways, notwithstanding that such risks were and still are underestimated by Italian consumers as well as by corporate entities.
To combat such underestimation, the current government introduced in its 2024 budget law (Law 213/2023) an obligation, for companies with a registered office in Italy and companies with a registered office abroad but with a permanent establishment in Italy, to stipulate, by 31 December 2024, an insurance contract to cover damage to their assets, directly caused by natural disasters and catastrophic events occurring on the national territory.
The specific insurance policy shall cover damages from events such as earthquakes, river overflow, volcanic eruptions, bradyseism phenomena, landslides, inundations and floods.
Insurance companies can offer this coverage either by directly undertaking to cover the entire risk, through co-insurance arrangements or in a consortium formed by plurality of insurance providers. In this last case, the consortium must be registered with CONSAP Spa (a state-owned insurance company) and approved by the Italian insurance regulator (IVASS) following the assessment of its financial solidity.
In the case of non-compliance there will be fines for the company in breach, which might also be excluded from receiving contributions, subsidies or financial benefits from the state in general, but will certainly be excluded from all benefits foreseen in the event of a calamitous and catastrophic event that caused damage to the properties and goods that should have been insured.
Along with this government initiative, the private sector is also taking notice of climate change, even if corporate Italy is still underestimating the danger to the point that only one in three companies exposed to potential economic losses due to natural catastrophic phenomena is actually insured, and more often than not with insufficient policy limits.
In this situation, two insurtech start-ups specialised in product development and risk assessment services in the field of extreme natural events, carried out an analytical study to support insurance companies. The study was aimed at defining and measuring the seventeen climate risks listed in EU Regulation 2139/2021, as well as the assessment of earthquake risk, given its importance of this factor in the Italian territory.
The study determined the statistical probability of economic losses occurring on the national territory – whether damage repair costs, lost revenue or service interruption costs – triggered by natural phenomena up to the year 2050 and produced some actuarial data and tables of reference.
Beside the above developments, partly prompted by meteorological storms causing damage throughout the Italian peninsula, the Italian insurance market has been hit by a totally different kind of storm: the rise of insurtech.
Italian insurance companies were, until recently, characterised by a static, mutualistic and legacy system in which investments in information and/or operational technology (IT or OT) innovation were relatively limited compared to other European countries, which were more open to the modernisation of a business as traditional as insurance. Because of this traditional attitude, insurtech start-ups found fertile ground in which to grow and develop offerings for the insurance market that Italian insurers had neglected to develop in-house. One honourable exception to this lack of innovation is the Vittoria Hub, the corporate start-up incubator of Vittoria Assicurazioni spa, which is the first corporate insurtech incubator in Italy and which has produced several notable start-ups including 99bros, Helpet e Re.Doctor, CupSolidale and OnValue.
A recent Italian Insurtech Association (IIA) survey shows that, as of May 2023, there were as many as 111 start-ups currently operating in the insurtech field in Italy. Digital insurance constitutes a growth factor that is predicted to grow the insurance market from EUR145 billion in 2022 to at least EUR250 billion in 2030, of which EUR60 billion is attributable to embedded insurance and/or insurtech innovations.
Fuelling this storm are changes in customer habits
A recent Accenture study shows how the insured want to interact with their insurance company: whenever they consider it necessary to do so and proactively through a range of media, including via mobile devices. The very same study pointed out that traditional business models are being reshaped through web sales of insurance, more often than not along with banking, financial and utility services, or embedded in other contracts. This has required new regulations (eg, the EU’s Insurance Distribution Directive and especially its national applications) and IT technologies affecting the property and casualty insurance sectors, both motor and non-motor.
The Italian Regulator IVASS, during a 2023 conference, depicted an insurance landscape where cybercrime and related security issues will grow in double digits over the next few years and the focus of insurers will shift from claim handling to risk prevention and mitigation.
Insurtech players are able to contribute to this change precisely in terms of management, containment and reaction to damage caused by attacks or malfunctions of IT devices. In this context, the disruptive technologies that support innovation are algorithmic tools, APIs, frameworks and platforms, but also, and above all, human skills, capable of creating a solid ecosystem on which to build individual modules to protect specific risk areas.
Currently, some start-ups offer complete environment applications capable of assisting the customers in all phases of a cyber-attack cycle, providing tools for assessment and active monitoring. Moreover, the access to such apps and/or services is based upon the “freemium subscription” business model where the user can access some of a product’s features or services for free, but must pay a premium to access additional features or services, so introducing into the insurance sector an alternative to the traditional premium.
Non-motor insurance, innovative health services, products for smart homes, cybersecurity and blockchain are just a few of the areas where insurtech products will provide rapid growth in the Italian insurance market. On the motor side, the sharing economy and telematics are remaking an insurance market segment that has remained unchanged for decades. Examples of this include:
A recent Insurtech Investment Index survey identified “claims management” as the business area where insurers are planning the most investment in technology for the automation of their insurance processes. In fact, an ample market share of the managers interviewed stressed how the algorithmic part – ie, actuarial mathematics – was directly related to meeting the needs and expectations of customers, providing a better price/service ratio, which is still the driving factor in the insurance market.
Within the panorama of insurtech products and services parametric insurance is a chapter on its own.
As mentioned above, recent unexpected meteorological phenomena in Italy, which are only made more likely by climate change, had unpredictable consequences on different sectors of the economy. In facts, floods and river overflowing due to exceptional rains along with winds well above historical records, took a toll not only on agriculture, but caused the interruption of some production activities, led to severe delays in transportation, and resulted in many other inconveniences affecting the tourism sector.
Taking this into account, parametric insurance emerges as a useful, but still underused, risk management tool as the insured does not have to demonstrate that it has suffered material damage, but the payment of the insurance indemnity is triggered whenever a series of parameters defined in the contract occur.
This situation drew the attention of Italian insurance customers and created awareness of protection from meteorological events, that, along with the significant material or physical damage that severely hit the insurance sector, caused major inconveniences and distress that, while not classified as material damages could not constitute an insurable claim but nevertheless together caused substantial pure financial losses.
The new market request for parametric insurance led to insurance providers offering this particular kind of insurance, exploiting the increased base of publicly available data and insurtech products and services available to create the contractual parameters that would trigger the insured right to compensation.
Parametric insurance is not regarded as an alternative solution to traditional insurance, but rather an additional form of coverage aimed at assuring the highest and most complete level of coverage possible, or only as a substitute for traditional insurance when the increase in premiums renders the standard way of risk transferring uneconomical. A typical example of this is that due to the increasing prevalence of natural disasters, premiums for property insurance substantially increased favouring the spread of parametric and hybrid policies. Especially popular today, are hybrid policies in which compensation is triggered when pre-established parameters occur but, at the same time, material damages are adjusted too.
However, parametric insurance can be used in a large variety of harmful situations ranging from cancellations or delays of flights or events, a fall in occupancy rates of hotel rooms or restaurant bookings as a result of adverse weather conditions or pandemics, to the consequences of pernicious insect infestations, and much more.
An example of this is the recent launch of a parametric product dedicated to Italian olive oil producers covering the damage caused by the olive fly (Bactrocera oleae), an insect that attacks ripe fruit following the hardening of the stone. An infestation of this type can cause significant losses in farmers’ turnover.
This specific parametric insurance, developed by an insurance underwriter teaming up with an insurtech broker, which facilitates information sharing and secure handshaking between farmers and the insurer, along with a company operating in precision agriculture, provides automatic and immediate compensation to the customer in the event of meteorological events that are particularly favourable to the development of the olive fly and which have historically had an impact on the oil yield. The “loss” event is certified by the index of infestation of the pathogen developed by the precision agriculture company from the analysis of big data climatic conditions and the compensation for the farmer will be proportional to the specific index applicable to the meteorological event.
Although parametric insurance can be a valid risk management tool, it also presents few problems.
The main point of attention for IVASS is linked to the possibility that these insurance products can be transformed into derivative financial products, in which the contracting party can use the coverage as an instrument to bet on a given event occurring without having a specific interest to protect, and therefore collect an amount linked to the occurrence per-se but without having suffered any damage.
A second problematic point, partially related to the first one, concerns the insurer’s claims handling process and it is linked to the central problem for the insurer of not losing control over claims payments, an aspect that is managed contractually by identifying adequate triggers and inserting multiple levels of checks in order to determine the accuracy, quality and presence of the condition for the payment of the insurance claim.
These are the current market trends, whereas passing to consider the development of the Italian insurance market, compared to much of the rest of Europe, there is still potential to be exploited in terms of insurance coverage, mainly in the non-life sectors.
This was confirmed by M&A activity in the sector during 2023, which remained active, driven by the activities of international financial players (both entering and exiting the Italian market), by the consolidation trend in the sector and by bancassurance agreements, the traditional driver of M&A in the insurance sector.
Macroeconomic elements, such as geopolitical instability and the inflationary push counteracted in recent months by restrictive monetary policies, have impacted the saving capacity of customers who, faced with the new economic scenario, are attracted toward more profitable savings instruments, such as Italian government bonds.
Despite this complicated scenario, the Italian insurance market, with reference only to the direct portfolio of companies with registered office in Italy, is expected to record an expected growth of 3% in 2023 in terms of total written premiums (non-Life and life). The data relating to the gross written premiums of Italian companies and general representatives of non-EU insurers, published as of 30 June 2023, would in fact confirm this trend with life premium collection amounting to EUR47.7 billion, a slight decrease compared to the same period of the previous year, while non-life premiums amounted to EUR18.8 billion, recording an increase of 6.9%, compared to the same quarter of the previous year.
The Cartabia reform
In addition to this economic scenario, the Italian insurance market shall have to deal with the reform of the entire civil procedure through Law 206/2021 (or the “Cartabia reform”), including mediation and arbitration, which took force between February and June 2023. Some of the most crucial elements of this reform are briefly outlined below.
With regard to alternative dispute resolution, with the aim of encouraging mediation and assisted negotiation procedures, the following are envisaged:
With regard to the amendments made to the Civil Procedure Code (CPC) regarding first instance civil proceedings, in summary, it is envisaged that:
With regard to arbitration, the criteria and guiding principles strengthen the guarantees of impartiality and independence of the arbitral tribunal, regulate/simplify the enforcement of foreign awards, as well as regulate the passage of the proceeding from an arbitral to an ordinary tribunal and vice versa, and allow ritual arbitrators to issue precautionary measures.
All these changes are dramatically shortening the terms to prepare and respond to a litigation in court, rendering claims handling more complex due to the shortage of time in which to instruct the defence counsel and providing them with all necessary and relevant instructions and documents.
Moreover, insurance providers shall now have to participate in ADR and at the first hearing, as the failure to appear without justified reason constitutes conduct that the judge can consider when making the award, especially when deciding on defence costs or when inflicting a fine for non-appearance during ADR.
All this will probably render claim handling a little more expensive and burdensome for insurers, but the real consequences of this Cartabia reform will only be better appreciated in the coming years, when the new procedure has been tested and jurisprudence has been formed on the interpretation and application of the new rules.