REPORT ON CHANGES MADE TO THE PRIVATE INSURANCE CODE
PRESS RELEASE
PRESS RELEASE
THIRD PARTY AUTO INSURANCE: ANTITRUST AUTHORITY POINTS TO RISK OF INCREASED COSTS FROM RULES BEING EXAMINED BY PARLIAMENT
Amendment approved by the Tenth House Commission could reduce the benefits from direct payment of claims
A number of changes introduced by the Tenth House Commission to the Bill 2272-bis risk significantly modifying the working of the mechanism for direct claims payment in third party insurance, leading to an increase in the average cost of policies.
This is the substance of a report sent to the Speakers of the House and Senate by the Italian Competition Authority.
The Authority particularly examined the possible effects of an amendment approved by the Commission that would modify the Private Insurance Code of 2005, limiting insurance companies' ability to approve car repairers and prohibiting the insured from accepting a discount on the premium in exchange for giving up the choice of his own repairer. In the Antitrust Authority's view, in order for the consumer to benefit from the possibilities offered by the direct claims payment system in terms of lower premiums and better claims payment services, the insurance companies must be able to count on controlled or approved repair shops. The changes made to 2272-bis during its legislative passage, however, make this impossible.
Similarly, there could be a negative effect on the cost of premiums from the clause foreseeing the reimbursement of consulting and professional assistance fees even in cases where the insured accepts the insurance company's proposed settlement: such reimbursements are not recognized in the current direct claims payment system.
In the Authority's view, the amendment, while it introduces measures that could benefit some professional figures, may mean an increase in third party insurance premiums for the generality of consumers. The measures contained in the amendment could create strong cost pressures on the insurance companies, resulting in serious damage to consumers who may find that their premiums increase and they can no longer choose policies offering reduced premiums.
Rome, 1 June 2007