Probably until recently in Italy not even all the operators of the insurance market were fully aware of the extent of the phenomenon of the so-called dormant policies, i.e. those policies which have not been collected from the beneficiaries and lie at the enterprises with the sword of Damocles of prescription and the next devolved to the Fondo Rapporti Dormienti set up at Consap.
A recent survey conducted by the Insurance Market Supervisory Authority, IVASS, already announced in its latest Annual Report, has now turned a spotlight on this specific issue. The result of this investigation led, through the crossing between the tax codes of the policyholders and the data on deaths available at the Tax Registry of Residents, to the revival of over 187 dormant policies for a total amount of 3,5 billion euros.
Going into even more detail, it must be said that of the over 187 policies mentioned above, 116 were savings policies that had reached maturity for a total amount of 1,5 billion euro, while over 71 were policies relating to deceased policyholders for an amount of about 2 billion euros. Of these latter, moreover, just under 31 thousand for approximately 1,7 billion euro related to whole-life contracts, i.e. policies that do not have a defined expiry and which end with the surrender, or with the payment of the benefit for the death of the insured.
It should also be added that as a side effect of the cross-referencing between the tax codes and the data on deaths from the Tax Registry, it was possible to formulate an initial estimate of the policies for which there could be the conditions for the devolution of the sums to the Dormant Policies Fund, quantifying everything in about 6 thousand policies for an amount of 54 million euros. These are policies for which the death of the policyholder occurred between October 2007 and October 2010 without the insurance companies being aware of it.
It must be said immediately that, in reality, the phenomenon of dormant policies certainly has even more considerable dimensions. This was underlined by Elena Bellizzi of Ivass, recalling that there are still 4 million potentially dormant policies that expired in the five-year period 2012-2016. Even if for the majority of potentially dormant life term policies, 3,3 million contracts equal to 84% of the total number, the conditions for payment of the benefit were not met, since at the time of contractual expiry it was the existence of the insured person has been ascertained, or there has been an interruption in the payment of the premiums with the consequent termination of the contract.
Finally, to have an all-encompassing picture of the phenomenon, two more points. I'm still there 900 contracts for which insurance companies had not yet been able to ascertain the status last spring. And then there is the sphere of foreign insurance companies operating in Italy (15% of total premium income), which have so far been excluded from the survey and on which IVASS has now decided to intervene, requesting a photograph of the portfolio of dormant policies for the period 2001-2018.
How can we try to remedy this phenomenon which, not surprisingly, Riccardo Cesari himself, Director of IVASS, has defined as "a typical case of information asymmetry, or rather a market failure on which only the public operator can operate"? Or, in other words by Luigi Di Falco of Ania, how do we remedy the continuation of a situation in which the risk of forfeiture of one's rights is entirely passed on to the policyholders?
Underlined that in other national contexts, such as the French one, the phenomenon of dormant policies has already been tackled and resolved, among the measures that appear to be more easily practicable in Italy we can mention here: the establishment of a single register of insurance contracts ; the possibility of accessing personal data bases, a possibility currently not envisaged in our legal system unlike what is foreseen in other legal systems; a sort of derogation from the ten-year limitation period (until 20 October 2010 the limitation period was even limited to the end of the contractually envisaged two-year period) .
A common sense suggestion, provided by Ivass himself, is the invitation to those who take out a life policy to indicate the name of the beneficiary in a precise and non-generic way, thus providing the insurance companies with all the information useful for tracing them in case of death of the insured.
As for the insurance companies, in addition to generically strengthening the operations of their call centers for assistance to potential beneficiaries, they will have to equip themselves with standards of processes and procedures suitable for preventing the formation of this phenomenon. IVASS, which had moved in this direction with a reminder letter to the market in December 2017, saw the return of some action plans that were judged "not always decisive". Not to put it mildly, this means that there is still a long way to go, given the prudence of insurance companies in introducing new standards with further procedural burdens and cost increases.
Ultimately, that of dormant policies is a challenge that in Italy can be overcome with new system regulatory measures, adequate procedures by insurance companies and greater attention from customers and potential beneficiaries. A challenge, therefore, which also has the flavor of a new stage of economic civilization.
