The Central Bank of the Republic of San Marino announces the issuance of the "Regulation on Insurance and Reinsurance Distribution," which will come into effect on July 1, 2024.
As previously stated during the public consultation phase, the newly issued regulation aims to:
(a) repeal and replace the existing Regulation on Insurance Intermediation (Reg. 2007-02);
(b) sintegrate the Regulation on Life Insurance Activities (Reg. 2008-01).
The main objectives of the regulation are to:
- align supervisory regulations on insurance and reinsurance distribution with the recent reform of Chapter II, Title V, Part I of the LISF (Articles 26, 27, and 28);
- incorporate the standards set out in EU Directive 2016/97 (commonly known as the Insurance Distribution Directive) and its implementing regulations;
- expand the regulatory framework for the distribution of foreign insurance products in San Marino to meet domestic market needs, ensuring a clear and comprehensive set of rules;
- reorganize and strengthen the Insurance and Reinsurance Intermediaries Register, primarily to protect the market against potential illegal practices. This will be achieved through a “vertical” or “hierarchical” approach that clearly outlines not only the professional role of the firm (agent or broker) but also the varying levels of responsibility within the distribution chain for each registered entity (manager or DAR, off-site employee, sub-intermediary, or an employee of the latter).
Following the consultation process, the final regulation has undergone several modifications in line with these objectives. Specifically, key changes include:
- formalizing the category of sub-intermediaries and requiring the registration of their distribution staff;
- extending the requirement of integrity and good repute to all on-premises employees and introducing a reputational requirement for intermediary firms as a condition for registration or its maintenance;
- strengthening the principle of asset segregation between the policyholder and the intermediary (or sub-intermediary);
- simplifying pre-contractual disclosure obligations in both the Single Pre-contractual Models (MUP), which intermediaries must provide, and the Pre-contractual Information Documents (DIP), which insurers must provide;
- incorporating ESG factors into the above-mentioned documentation;
- deferring the publication of pre-contractual models (MUP and DIP) for customer relations, as well as supervisory reporting templates for interactions with the Central Bank, to dedicated sections of the Bank's website. These documents will be independently updated and no longer attached to the regulation.
The Regulation also introduces transitional arrangements with staggered deadlines to ensure a smooth transition to the new regulatory framework and the updated Intermediaries Register.
This measure is part of San Marino's broader strategy to progressively align its supervisory framework with European Union principles and regulations, taking into account commitments related to the upcoming signing of San Marino’s Association Agreement with the EU.