By judgment No. 7549, published on 23 June 2021, the Regional Administrative Court of Lazio, upholding the claims of the Sindacato Nazionale Agenti di Assicurazione - National Union of Insurance Agents -("S.N.A."), ruled on the application for cancellation of the following provisions under IVASS Order No. 97 of 4 August 2020 ("Order 97/20"):
More specifically, the S.N.A. challenged the above-mentioned provisions based on allegations related to both the procedural aspects of their adoption and their merits.
In particular, the applicant alleged as follows:
The Regional Administrative Court upheld the S.N.A.’s application.
More specifically, the Court found breach of the participation guarantees underlying the regulatory activity of the Institute provided for in Article 191 of the CAP in relation to the provisions of the aforementioned Article 4 paragraph 12 and Article 4 sub 18 paragraph 2 letter (a) of Order 97/20.
First, the Regional Administrative Court found that Article 4, number 12, included in Order 97/20, was not the subject of public consultation scheme at the time, which amounts to a procedural violation of the participation guarantees provided for by the CAP.
Second, the Regional Administrative Court found contradictions in IVASS' regulatory activity with regard to the amendment of Article 56 of Regulation 40/18 (concerning the obligation to publish the list of horizontal collaborations in the pre-contractual information). Indeed, the Institute, while unreservedly accepting comments against the adoption of such obligation, during Public Consultation, then proceeded to its inclusion in Order 97/20. In that regard, it was specified that, in accordance with the previous case law of the same court, "recourse to the consultation procedure provided for by Article 191" is for the public entity not an option but a real obligation, under Article 97 of the Italian Constitution” [3]. Therefore, “the participation requirements laid down by Article 191 of the C.A.P. for the adoption of the Ivass regulations, far from reflecting the provision for a generic consultation with a merely informative purpose of the issuing Authority, must be assimilated” [4].
Finally, the Regional Administrative Court found that the provisions of Article 4.20 of Order 97/20, in introducing paragraph 4-bis into Article 58 of Regulation 40/20, likewise appear to be challengeable from a substantive point of view in that, in the face of a further bureaucratic increase in the distribution procedure, they do not appear to offer further or better protection for clients. More specifically, the Court held that Article 58 of Regulation 40/18 already imposes an obligation upon the intermediary to offer insurance contracts consistent with the needs of clients. Therefore, the provision for a further obligation to provide the client, prior to the execution, with a document attesting to the consistency of the product does not appear to have a function as an assumption of responsibility on the part of the intermediary, who is already responsible for their actual consistency, nor to usefully enhance client protection.
The ruling at issue, by upholding S.N.A.'s application and cancelling the above provisions, again results in altering the regulatory compliance framework for insurance distribution recently amended by the challenged measure, effective only from 31 March 2021. It will remain to be seen whether the Institute will challenge the decision before the Consiglio di Stato and whether insurance intermediaries, who in recent months have updated their internal procedures to comply with new regulations, will see the judgment of the Regional Administrative Court confirmed, or the Consiglio di Stato ruling in such a way as to restore the cancelled provisions of Order 97/20.
This article is for information purposes only and is not, and cannot be intended as, a professional opinion on the topics dealt with. For further information please contact Michele Zucca, Anthony Perotto and Guido Foglia.
News[1] See Article 191, paragraph 4 of CAP: «Regulations shall be adopted in compliance with open and transparent consultation procedures that allow any regulations under preparation and comments received to be made known, also by means of publication on the Institute's website. At the start of the consultation process, IVASS shall disclose the outline of the measure and the results of the regulatory impact analysis, which it shall carry out in compliance with the principles set out in Article 12 of Law No. 229 of 29 July 2003 and IVASS regulatory provisions».
News[2] In relation to the observations promoted by S.N.A. see: IVASS Order no. 97 of 4 August 2020, Outcome of the public consultation, Rome, 4 August 2020, Observation No. 81, https://www.ivass.it/normativa/nazionale/secondaria-ivass/esiti-pubb-cons/2020/provv-97epc/Esiti_Provvedimento_97_2020.pdf.
News[3] See Regional Administrative Court of Lazio, Rome, First Division, 27 October 2010, No. 33031.
News[4] See Regional Administrative Court of Lazio, Rome, Division II Ter, 23 June 2021, No. 7549.