After almost two years of coordinated work, Ivass and Consob have published the new rules on sale of insurance investment products (IBIP: Insurance Based Investment Products), i.e. class I revaluable policies, class III and V products and multi-class policies. The innovations concern different areas such as mandatory consultancy, pre-contractual documents, information on costs and more. The rules transpose the latest European directive on insurance distribution (IDD, Insurance Distribution Directive, which replaces Mifid 2) and are placed in public consultation until 31 October. The final regulation will be approved by the end of the year, after which a transition phase will begin, probably lasting three months, to give intermediaries time to adapt.
In detail, two new regulations have been written: that of IVASS on the governance and control process of all insurance products (P.O.G.: Product Oversight and Governance), with rules to be applied to both producers and distributors, and that of Consob on the distribution of IBIP through banks, post offices and financial intermediaries.
The Authorities have worked together to align the regulations and thus create a homogeneous discipline regardless of the sales channel. The aim was to avoid the paradox that the same product would follow Consob regulations if sold by a bank and IVASS regulations if sold by an insurance agent.
MANDATORY CONSULTANCY ON COMPLEX PRODUCTS
As regards the regulatory changes, mandatory (and free) consultancy is introduced for the sale of complex IBIPs. This scope includes class III and V products and multi-class products, but not class I revaluable policies with guaranteed capital.
THE "DECLARATION OF COMPLIANCE WITH NEEDS AND REQUESTS"
Even in transactions that do not involve consultancy, whoever sells the policy must provide the customer with the "Declaration of compliance with needs and requests", a document that certifies the reasons why the chosen product is suitable for that specific customer.
SIMPLIFIED PRE-CONTRACTUAL INFORMATION
Pre-contractual information is also simplified for all insurance products and for all distribution channels, eliminating overlaps between Consob and IVASS information.
A DOCUMENT ON COSTS AND PERFORMANCE
Then the Single Reporting Document (DUR) was created for the producer and the distributor, which will contain all the information on the costs and yields of the IBIPs.
INCENTIVES TO BROKER
An important novelty for operators concerns incentives, i.e. fees paid to intermediaries by parties other than customers. Incentives are always prohibited for independent advice, while in all other cases they are legitimate only if they do not harm the client in any way, for example by placing the broker in a situation of conflict of interest.
TRAINING AND UPDATE OF OPERATORS
Finally, the training and professional updating obligations of intermediaries are simplified, considering the skills acquired for the distribution of insurance and financial products equivalent.
Download the documents for consultation from the sites of Consob and Ivass.
