Anra pushing for captive regime in Italy

Italian risk management association Anra has told Commercial Risk Europe that it is hopeful a new captive-specific regime will become a reality in Italy, and believes France’s success in this area will help spur change. Carlo Cosimi, president of Anra and group risk and insurance vice-president at MAIRE, said that the main obstacle is political. “We need a change in legislation; that is not a duty of the regulator but a duty at the political level. The French assembly decided on a reform of the law of insurance in order to create the situation where French insurance authorities could specifically regulate captives. It is the same in Italy – the Italian regulator cannot change that legislation without a change in the law of insurance,” he said. But he added that discussions are currently taking place with regulator IVASS that might help spur the politicians into action. Cosimi explained that IVASS had a lot of discussion with two Italian groups that recently redomiciled their captives to Italy, and issued a reinsurance licence that was adjusted and tailored for captive use. The licence limits the groups to writing risks within their own group and asks for all the same requirements and compliance as a traditional commercial insurance carrier. Cosimi said this lack of proportionality is why a specific captive regime is needed that would attract captives with a low level of premium written and a low capitalisation. Currently only a big captive would apply successfully to get a licence as a reinsurance carrier in Italy. “The two groups redomiciling their captives to Italy is a great thing because it pushed the regulator and the politicians to take into consideration this matter,” said Cosimi. “Our hope is that the two groups returning their captives to Italy, and other groups, could further push the discussion about a new captive regime in Italy. We hope we are on the way. The final step will be to have a specific captive regime.” Cosimi believes the general trend in Europe, and the fact that France has already put in place a captive regime, can help. “In the past, only Ireland, Luxembourg or Switzerland could provide these kind of facilities for captives. Now, the fact that a big country like France has decided to step into this kind of business, and this kind of regulation, could probably facilitate not just Italy, but also Germany and Spain to follow the same process” he said. He added that the importance of new captive rules has been highlighted by the difficult insurance market. “In general terms, a soft market doesn’t push a big group to establish a captive because the rates are low, the coverages are wider, and you can sit around the table to find a solution in terms of coverage for new risks,” said Cosimi. “But when the situation changes, and there is a hard market, the premium rates are very high, the deductibles are high, capacity is limited, wordings are full of exclusions. So in this kind of condition, of course the capability to self-insure, to retain and self-finance risk, is very important for a group.”

Anra pushing for captive regime in Italy

France’s legislation could help pave the way in Europe

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