Branch of an undertaking from a third country

FAQ – Branch of an undertaking from a third country

Before setting up a branch in Italy it is necessary to obtain the authorisation of IVASS.

Undertakings with head office in the Swiss Confederation are required to apply the article 349 of the Private Insurance Code (CAP) and the article 34 of the ISVAP Regulation No. 10 of 2 January 2008.

1) How long does the authorisation process take?

IVASS shall issue the authorisation order within 90 days of the filing of the application, without prejudice to the cases of suspension and interruption of the authorisation procedure.
The authorisation order shall be published in the Italian Official Journal and in IVASS’ Bulletin. The authorisation is effective only in the territory of the Italian Republic.
The undertaking may start its activity only from the moment when it is registered in the register of undertakings, after receiving IVASS’ authorisation.

2) What are the main applicable insurance regulations?

3) What will IVASS assess?

Before granting the authorisation IVASS shall assess that the sound and prudent management of the new branch is ensured and shall verify:

  • compliance with technical-legal requirements (such as the scheme of operations, the reputation and the experience of the agent of the branch, the group’s configuration);
  • aspects pertaining to the regulatory framework of the Home State (such as the adequacy of the prudential regulation or the absence of any obstacle to the exchange of information with the Home Supervisory Authority);
  • the financial soundness of the initiative.

4) What activities can be carried out?

The undertaking may pursue business:

  • in one or more life or non-life classes/risks;
  • simultaneously, in life assurance and Accident and Sickness insurance. In all the other cases the simultaneous pursuit of life and non-life insurance classes is prohibited.

5) What are the conditions for setting up a new branch?

An undertaking seeking authorisation must:

  • have adopted - in its home State - a form which is equivalent to società per azioni (company limited by shares), società cooperativa (cooperative company) or società di mutua assicurazione (mutual undertaking);
  • be authorised - in its home State - to the pursuit of the same insurance classes for which authorisation is sought in Italy;
  • set up a branch in Italy;
  • appoint an agent of the branch who must be resident in Italy and have the powers to represent the undertaking in relations with the courts and authorities of the Italian Republic, to conclude and underwrite the contracts and all the other deeds relating to the business pursued in Italy as well as the power to effect the transactions necessary to lodge and bind the security. If the brief is given to a legal person, this must have its head office in the territory of the Italian Republic and appoint in turn a natural person resident in Italy and having a brief which includes the above powers. The agent of the branch must meet the professional and good repute requirements set out in the article 76 of the Private Insurance Code (CAP);
  • hold the eligible basic own funds to cover the absolute floor of the Minimum Capital Requirement;
  • show evidence that it will be in a position to hold eligible own funds to cover the Solvency Capital Requirement and the Minimum Capital Requirement, going forward.

6) What documents and information must be provided?

The undertaking shall enclose to the application the documentation and the information listed in the Private Insurance Code (CAP) and in ISVAP Regulation No. 10 of 2 January 2008, necessary to verify:

  • the financial soundness of the initiative;
  • the system of governance and organizational structure;
  • the three-year scheme of operations;
  • the fit and proper requirements of the agent of the branch and those who carry out key functions with reference to the activity of the branch.

7) What exactly should the scheme of operations contain?

The scheme of operations refers to the first three financial years. It contains qualitative and quantitative elements which are listed in the Private Insurance Code (CAP) and in ISVAP Regulation No. 10 of 2 January 2008, that fully illustrate the operational features of the undertaking. In particular, it provides information on:

  • the developments of the activity to be authorised (objectives, planned activities, strategies, such as the procedures for identification and taking up of risks);
  • estimates of technical and economic elements and capital adequacy;
  • the system of governance and the organizational structure.

The scheme of operations of an undertaking seeking authorisation to pursue the non-life insurance classes 10 (motor vehicle liability), 12 (liability for ships - sea, lake and river and canal vessels), 14 (credit), 15 (suretyship), 17 (legal expenses) and 18 (assistance) shall be supplemented with the specific information and documents.

An undertaking seeking authorisation for the simultaneous pursuit of life assurance and the non-life insurance classes 1 (accident) and 2 (sickness) shall furnish the information envisaged for the scheme of operations, broken down by the two lines of business.

In case the undertaking is seeking authorisation also to the pursuit of reinsurance business, in addition to the above mentioned information, the scheme of operations shall illustrate the nature of the risks which the undertaking proposes to cover, the retrocession policy as well as the data mentioned in the scheme of operations in relation to reinsurance business.

8) When and why can IVASS deny authorisation?

The authorisation can be denied if:

  • IVASS understands there are shortcomings that may jeopardise the sound and prudent management of the new branch (such as inadequate own funds, deficiencies in the proposed scheme of operations);
  • the applicable law of the home State limits or prevents the exercise of the supervision by IVASS on the branch;
  • the home State of the undertaking does not observe the principles of equality of treatment or of reciprocity vis-à-vis undertakings with head office in Italy, which have set up or are going to set up a branch in that State.

IVASS shall inform the undertaking of the rejection of the authorisation within 90 days of the filing of the application, without prejudice to the cases of suspension or interruption of the authorisation procedure.

9) When can an undertaking’s authorisation lapse?

In accordance with article 240 (1) (a) of the CAP, the authorisation of single classes lapses (totally or partially) if the undertaking does not exercise them within the first twelve months.
If the undertaking has not started business within the first twelve months or has not carried on business for more than six months, IVASS may grant an extension of not more than six months if there are justified reasons and at the request of the undertaking concerned.

Last update

14 July 2022