Irish Insurers call on Government and Central Bank of Ireland to engage with Italian counterparts to avoid protectionist measures that undermine fundamental freedoms of the Single Market
Financial Services Ireland (FSI) and Insurance Ireland have contributed to a consultation [1] by the Italian Supervisory Authority (IVASS). IVASS is seeking stakeholder input on a draft regulation limiting the freedom of investment for certain life insurance products in the Italian market. In their responses, Insurance Ireland and FSI are calling on the European Parliament, the European Commission, EU Member States (i.e., Ireland and Italy) as well as EIOPA and its Board of Supervisors to avoid protectionist national measures that undermine the fundamental freedoms of the Single Market and the underlying supervisory framework. FSI and Insurance Ireland also believe the Draft Regulation will have a detrimental impact on Italian citizens seeking to save for retirement and invest.
We further note that the initiative runs counter to the objectives of allowing EU citizens to invest more effectively and efficiently in EU Capital Markets. The rules set out in the European Commission’s proposal for a Retail Investment Strategy exclusively focus on improving the market conduct framework for financial services and insurance – restrictions and limitations as proposed in the Draft Regulation counteract these ambitions. In consequence, Italian citizens will either lose out from high-profile investment through well-regulated insurance products or turn to less or unregulated market.
Irish insurers are the largest providers of life insurance products into Italy. In 2022, Irish insurers provided insurance to Italian citizens for €10bn (measured in gross-written premiums) and paid out claims amounting to nearly €8bn. If the draft regulation is brought into law, it is expected that the majority of this business will be withdrawn.
For Ireland, that would mean a loss of nearly 10 % of the market. For Italian citizens, it would mean a substantial limitation of their choice, as almost 15 % of life insurance products in Italy are provided from abroad, adding to an already challenging market environment in Italy and impacting the ability of Italian citizens to save and invest for retirement.
The regulatory regime for insurers in the EU foresees that the supervision of the freedom of investments is subject to the supervisory authority in the EU Member State in which an insurer is established. For Irish insurers this is the Central Bank of Ireland (CBI). The CBI has an outstanding reputation as a prudent and state-of-the-art supervisor. Insurance Ireland and FSI believe IVASS would be undermining the mandate of the CBI through this revised Draft Regulation. IVASS is basing this step on requirements which were set out by the European Commission in an Interpretative Communication in 2000. However, the Interpretative Communication only allows that IVASS overwrites the CBI’s mandate in very specific circumstance, therefore FSI and Insurance Ireland do not believe this Draft Regulation is justified.
“Insurance products manufactured in Ireland and supervised by the CBI are a strong sign of excellence and quality for citizens in Ireland and across the EU. Ruling these products out of the Italian market will not only harm the Irish market but will ultimately be to the detriment of Italian citizens”, Insurance Ireland CEO Moyagh Murdock said.
FSI Director Patricia Callan added: “Across the EU institutions and governments are seeking to enhance citizens’ access to products through the EU Retail Investment Strategy. The course being proposed by the Italian supervisor will undermine these ambitions by reducing choice and competition for Italian consumers.”
FSI and Insurance Ireland call on the Government and the CBI to engage with their Italian counterparts to avoid that this draft regulation being entered into law.
Download: 'FSI and Insurance Ireland Key Messages'
[1] Consultazione n. 2/2024.
