Claims-Made Policies and Italy’s 2017 Competition Bill: Offering Ten-Year Run-Off Cover
Archive commentary on the 2017 Competition Bill. This translation preserves the legislative stage discussed in the original article.
Article 13 of the 2017 Competition Bill, approved by the Senate, proposed amending Decree-Law No. 138 of 13 August 2011, specifically Article 3(5)(e). As amended, it would read as follows, with additions in capitals:
This is therefore not the ten-year run-off cover already provided, for example, by the implementing rules for lawyers’ insurance solely on cessation of practice.
Instead, the Competition Bill refers simply to the policy’s period of operation and would therefore concern every policy, without exception—that is, every policy year.
Conversely, the provision does not require every policy actually to include ten-year run-off cover. It requires the contractual terms offered at inception to provide that possibility: insurers must offer it as an optional extension. Individual insureds would then decide whether to purchase it and pay the additional premium. That premium should be substantial: renewing claims-made insurance the following year should, in principle, be more economical than extending the current policy for ten years.
The text is not yet final. Amendments by the other chamber of Parliament and eventual publication remain to be seen.
One issue certainly requiring clarification is which policy would respond to an event occurring in 2017 where a 2017 policy includes extended reporting cover, a concurrent 2018 policy has unlimited retroactive cover, and the claim is notified in 2018.
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