The Council of Ministers today gave the final green light to two decrees which implement as many EU directives on the subject of banks and insurance companies. This was announced in a press release from Palazzo Chigi released at the end of the CDM, adding that - during the same meeting - Vincenzo La Via was confirmed as director general of the Treasury for another three years.
SMALL BANKS: BANKITALIA WILL BE ABLE TO REMOVE THE TOP MANAGERS
1) The first intervention gives the Bank of Italy the power to remove the heads of the smaller banks (those that do not fall under the supervision of the European Central Bank), in the event that the "sound and prudent management" of the institutions is at risk.
2) The decree also reforms the legislation on the requirements of managers and shareholders, integrating the objective requirements of "honourability and professionalism" with criteria of "competence and correctness" and introducing some limits on the accumulation of offices.
3) A new regime for administrative sanctions is then introduced, which will have higher amounts and will not only affect natural persons. On the contrary, the new system is intended to sanction first of all the entity and only on the basis of assumptions identified in the legislative decree also the company representative or the natural person responsible for the violation.
4) The provision also brings new mechanisms for reporting, both within the entity and to the Supervisory Authority, any regulatory violations by bank staff (the so-called whistleblowing), in addition to the abstention obligation of shareholders and directors in resolutions in which they have a conflicting interest.
INSURANCE: NEW SUPERVISION AND SIMPLIFIED REGULATIONS
The Council of Ministers today also approved "a draft legislative decree implementing directive 2009/138/EC on the taking up and pursuit of the business of insurance and reinsurance (Solvency II)", reads the press release.
The directive, in addition to simplifying Community legislation through the codification of the previous life and non-life directives (excluding cars), introduces a new prudential supervisory regime with the aim of providing a regulatory framework "aimed at maximum user protection - he further specifies the government – and the creation of a new system that provides the Supervisory Authorities with the tools to assess the solvency of an insurance company”.
There are new capital requirements anchored to the risks actually incurred, new assessment criteria and new methods for measuring and mitigating risks. Action is then taken on the governance of insurance companies, making the board responsible and introducing new corporate functions.
The decree also specifies the supervisory tasks attributed to IVASS, which will be able to intervene on the governance of the companies and use auditing firms for on-site inspections, providing for the charges to be borne by the supervised entities with reference only to internal models, as is the case in other European countries.
