Italy: IVASS publishes new secondary rules on AML | Hogan Lovells

Following a public consultation launched on December 11, 2019, IVASS published on July 14, 2021 its long-awaited Regulation No. 111/2021 setting the rules relating to procedures for mitigating the risk of money laundering and providing for modifications to the IVASS regulation n ° 44/2019 concerning the rules relating to the internal organization, procedures and controls and due diligence with regard to customers for the purposes of combating money laundering (“IVASS Regulation”) .

The IVASS Regulation adopts a risk-based approach and provides for new organizational rules for the following market players operating in the life insurance sector: (i) Italian branches of EU insurance companies; (ii) Italian insurance agents and brokers and EU insurance intermediaries operating in Italy under the right of establishment and (iii) EU insurance companies and intermediaries which are considered to be established in Italy even if they do not have a branch.

In this specific regard, the IVASS regulation specifies that the following entities must be considered as established in Italy even if they carry out their activity without having a local branch:

  • EU life insurance companies operating in Italy under the freedom to provide services – through agents, brokers, direct sellers, financial intermediaries and EU intermediaries – receiving gross premiums for an aggregate amount of more than 5 million d ‘euros;
  • EU insurance intermediaries distributing life insurance products in Italy under the freedom to provide services through Italian employees registered in section E of the Italian Register of Insurance Intermediaries (“RUI”).

In accordance with the IVASS regulation, insurance companies and intermediaries have different ways of setting up the mandatory AML function and appointing the associated AML manager, as follows:

a) Italian branches of EU insurance companies – without prejudice to the possibility of outsourcing the AML function also outside their group or at the head office – are authorized to entrust the compliance function within the head office or to the General Representative of the branch with the tasks of the AML function and to appoint the AML manager within the head office, subject to certain conditions being met;

b) Italian agents and brokers and EU agents and brokers operating in Italy under the right of establishment in the life insurance sector are required to set up the AML function if they have at least 30 employees or collaborators registered in section E of the RUI and if they distribute insurance products for which the volume of premiums gross exceeds 15 million euros. In this case, agents and brokers carrying out their activity as a sole proprietorship are not required to designate the AML manager since the agent or broker as a natural person will be directly responsible for the AML function.

vs) EU insurance companies established in Italy without a branch are required to designate the person responsible for reporting suspicious transactions and the IVASS measure provides the relevant criteria and conditions for their identification. EU insurance intermediaries established in Italy without a branch must transmit suspicious transaction reports to the relevant person of the reference company or, if this cannot be identified, directly to the Italian FIU.

Specific communications must be filed with IVASS concerning, among others, the establishment and appointment of the AML functions and agents mentioned above.

The IVASS regulation also modifies the IVASS regulation n ° 44/2019 by introducing the methodology for Italian and European insurance companies and intermediaries for the conduct of the money laundering risk self-assessment exercise to which they are exposed in the course of their activities. In particular, IVASS regulation n ° 44/2019, as amended, now specifies the elements to be taken into consideration in order to identify the inherent risk, the vulnerability, the residual risks and the effectiveness of the safeguards and procedures put in place to mitigate the risks of money laundering. A structured set of data and information is also to be transmitted annually to IVASS in accordance with the instructions to be published annually by the latter.

Next steps

The IVASS regulation will soon be published in the Italian Official Journal.

Insurance companies must communicate to each insurance agent and broker the amount that contributed to the calculation of the gross premiums – allocated by each of them for the 2019 financial year – within 30 (thirty) days of the publication. of the IVASS regulation in the Italian Official Journal. .

During the first application of the IVASS regulation:

a) EU insurance companies established without a branch and insurance intermediaries must comply with the provisions set out therein from 1 January of the year following its publication (i.e. January 1, 2022);
b) the relevant information and data relating to the 2020 financial year must be sent to IVASS no later than September 30, 2021;
c) the relevant communication to IVASS concerning, among other things, the establishment and appointment of AML functions and agents must be sent before November 30, 2021.

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