New Regulation on Insurance and Reinsurance Distribution effective on july 1 2024

The Central Bank of the Republic of San Marino announces the issuance of the "Regulation on Insurance and Reinsurance Distribution," coming into effect on July 1, 2024.

As previously specified during the public consultation phase, the new Regulation will:

a) Repeal and replace the current Regulation on Insurance Intermediation (Reg. 2007-02)
b) Integrate the regulation on life insurance activities (Reg. 2008-01)

Its main objectives are:

• To align supervisory regulations on insurance/reinsurance distribution with the recent reform of Chapter II, Title V, Part I of the LISF (Articles 26, 27, and 28).
• To transpose the standards set forth by EU Directive 2016/97 (Insurance Distribution Directive) and its implementing regulations.
• To expand the rules for the distribution of foreign insurance products in San Marino to meet the economic needs of the internal market and at the same time apply a framework of rules inspired by principles of clarity and completeness.;
• To review and enhance the Register of Insurance and Reinsurance Intermediaries with the primary goal of protecting the market from potential illicit activities. This is made possible through a "vertical" or "hierarchical" approach to draw a clear distinction not only among different professional roles performed by companies – either agents or brokers – but also among different liability profiles in the distribution chain of each registered entity – head, off-site employee, sub-intermediary or their staff.

Following the consultation process, the Regulation underwent several modifications consistent with the guidelines above. Specifically, these changes include:

• The categorization of sub-intermediaries and the publication in the Register of those engaged in their distribution.
• Extending the requirement of good repute to employees operating exclusively on-site and introducing a reputation requirement for intermediating companies for registration or its maintenance.
• Strengthening the principle of asset separation between the contracting party and the intermediary (or sub-intermediary).
• Simplifying the Pre-contractual Uniform Models (MUP) for pre-contractual information by the distributor, and the Pre-contractual Information Documents (DIP) by the producer.
• Integrating ESG profiles into the aforementioned documentation.
• Pre-contractual (MUP and DIP) documentation to be used in relations with clients and supervisory documentation to be used  in relations with the Central Bank are published and updated directly on this website, in the regulatory area, and are no longer attached to the Regulation.

The regulation also provides for transitional regimes with staggered deadlines to ensure a gradual and seamless transition to the new regulatory framework and the new Register of Intermediaries.

This provision is part of the strategy to progressively align the supervisory regulatory framework with EU principles and regulations, due to the commitments arising from the forthcoming signing of the Association Agreement of San Marino with the EU.