The effects of the health emergency linked to the spread of Coronavirus are affecting all sectors of the economy.
The costs that we are paying in terms of human lives and the decrease in GDP are inducing states and supranational organizations to implement somewhat coordinated interventions in order to create conditions for a speedier restart. All are trying to learn from the mistakes of the past—like cuts in healthcare spending—and taking advantage of the accelerations the situation we are experiencing has imposed, like “massive” smart working, and the digitization of education and justice.
In this context there are initiatives that have affected the insurance world, which is being called to face this particular moment with a eye towards the future. Insurance companies will most likely see an increase in claims and litigation attributable to Coronavirus, but there’s more to it than that. Depending on the the political and economic choices made in regards to timing of recovery, the sector will be affected more or less broadly by the decrease in the spending capacity of potential customers.
That said, at EU level we report the interventions of the EIOPA (European Insurance and Occupational Pensions Authority) of 17 and 20 March 2020.
The first intervention contains requests to the insurance market aimed at keeping capital requirements under control, which was followed by the communication of IVASS (Institute for Insurance Supervision) on March 30, 2020. The Institute informed that it had sent a letter to insurance and reinsurance companies based in Italy asking to adopt, at the individual and group level, extreme prudence in the distribution of dividends and payments to company representatives.
The second intervention contains a series of recommendations on the temporary flexibility relating to the terms for the supervisory and public disclosure information due to COVID-19. These measures were recalled by IVASS in the context of the document containing further measures in favour of the insurance market on March 30. The document in question, which also contains numerous extensions in relation to deadlines set by the regulations issued by the Institute, follows a first group of measures in favour of the sector published on March 17, 2020, which also affected the insurance distribution.
Also at the domestic level, the extension granted by IVASS in relation to the deadline for responding to complaints from businesses and intermediaries (75 days, as opposed to 45 days) and the deadline for responding to customer information requests (35 days, against the usual 20) by the companies, as well as the suspension of the terms of the administrative procedures pertaining to IVASS itself, whose terms are suspended ex lege from 23 February to 15 April 2020, pursuant to art. 103, paragraph 1, of the Law Decree of 17 March 2020, n. 18 (“Cura Italia” Decree).
Still in the context of the “Cura Italia” Decree, we find the rule (art. 125, paragraph 2) which provides for the extension of 15 days of the so-called “Period of conduct” referred to in art. 170 bis of the Private Insurance Code for Motor TPL contracts, which is therefore increased to 30 days after their expiry. We specify that the rule applies within the time span between 17 March 2020 (date of entry into force of Legislative Decree no. 18/2020) and 31 July 2020, the final date set by the aforementioned provision (remember, in the process of conversion).
I am sure that the measures above will not be the only ones. Lastly, I will close by citing the Law Decree n. 9 of 2020, which provided, for residents or with registered office in the former “red zones” referred to in Annex 1 of the Prime Ministerial Decree of March 1, 2020 (the Lombard and Veneto municipalities where the first significant cases of Coronavirus were recorded) suspension of the payment of premiums (of all insurance contracts) expiring in the period between 21 February 2020 and 30 April 2020 (the subjects in question, after April 30, will benefit from the extension of the period of conduct referred to in the Decree “Cura Italia”).