Insurance investments: Ivass and Consob increase protection

Ivass e Consob standardize the rules on the distribution of so-called IBIPs, the insurance investment products, i.e. Class I revaluable life policies linked to separate management, policies unit linked e index-linked Class III, Class V capitalization policies and multi-class products.  

This is how it comes corrected an asymmetry of the Italian market, which has so far provided for different rules for these products depending on the distribution channel (banking, postal or insurance).

The only important distinction to survive is that between the supervisory authorities: Consob will continue to monitor the products sold by banks, post offices and financial intermediaries, while Ivass on those placed by insurance companies, agents, brokers and their collaborators.

Among the novelties, the most relevant is that issuers will be required to define two reference markets for each product: one positive (ie the customers to whom the single product is intended) and one negative (i.e. the type of customers to whom the product should not be offered because it is not suitable).

In this way – Ivass sources explain – consumer protection will already anticipate the product conception and design phase. But not only that, because the issuers will also have to check that distributors only sell products to the type of customers they are intended for.

Also, the new rules stipulate that financial advice, when it is mandatory, must be provided free of charge. The rule does not apply to "non-complex" investment products - those that do not expose the customer to the risk of losing the invested capital, such as Branch I policies - because in these cases consultancy is not mandatory.  

The new provisions will enter into force the March 31 2021. In detail, Consob has introduced some amendments to the Intermediaries Regulation, while IVASS has intervened on Regulations 40/2018 and 41/2018 and has published the new Pog Regulation (product oversight and governance) on the governance and control of all insurance products, including IBIPs.