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InsurTech is composed of the words “insurance” and “technology”. It is used as a collective term for the application of modern technologies in the domain of insurance services.
Digital and mobile brokers: FinTechs belonging to this category mostly act as digital insurance brokers and provide users with an overview of their insurance contracts with their respective conditions. Some FinTechs offer very short-term insurance contracts to cover specific cases which can be concluded often spontaneously via mobile devices. Oftentimes additional consulting services are offered.
Internet of things: FinTechs belonging to this category collect data by measuring for example the driving style of the customers or through wearables the customers wear to consult on, offer and/or manage the customer’s insurances.
Introduction
Attitude of the country towards InsurTech-services
InsurTech solutions and related services are rapidly increasing their presence in the Italian market. A particular attention is paid by regulator to the data privacy related issues as well as to specific issues raised by InsurTech, like cyber security risks and potential discrimination in connection with the pricing of insurance premiums.
The Motor and Health sectors, along with intermediation market facilities (such as MGAs), are the area where InsurTech is thriving most locally.
Legal affairs
Obligations and requirements to provide InsurTech-services
InsurTech firms which underwrite insurance or reinsurance risks, are subject to the prior authorization by the local Insurance Regulator (Istituto per la Vigilanza sulle Assicurazioni – “IVASS”) under Section 13 of the Italian Private Insurance Code (Legislative Decree no. 209/2005 providing the Codice delle assicurazioni private –“ CAP”).
To obtain the authorization, it is required, among others, that these entities are incorporated either as joint stock company (società per azioni), cooperative (società cooperative), mutual insurance company by shares (società di mutua assicurazione per azioni) or European company (società europea) and that they have their administrative offices in the Italian territory. Specific rules provided by Sections 23 and 24 of the CAP shall apply to the insurance companies established in a EU Member State. Specifically, the establishment of a branch by an EU insurance company must be preceded by a notification to IVASS submitted by the competent authority of the Member State where the insurance company is established. The branch shall be established after the receipt, by the EU Member State authority, of the communication from IVASS or, absent such communication, after 30 days following the notification.
Similarly, a notification to IVASS by the competent authority of the Member State where the insurance company is established shall be necessary to provide insurance services in Italy under the regime of the freedom to provide services in the EU.
Moreover, insurance companies are required to maintain among others certain minimum capital requirements equal to: