Fwu case, Ivass pressure on policy distributors

After the happy ending of the Eurovita affair, an Italian company made safe by the national bigwigs in the sector, with a system operation that saved around 400,000 policyholders, a new tile falls on the life sector.

This time the origin of the turmoil, which also involves the insurance contracts taken out by some 130,000 Italians, is in the centre of Europe and is called Fwu, with a triangle between Germany (where the insolvent parent company Fwu AG is based), Austria and Luxembourg where the Fwu Life Insurance Lux and Fwu Life Insurance Austria are based.

The two companies operate under the freedom to provide services, mainly through insurance brokerage networks (particularly in Veneto, Lombardy and Lazio). And it is precisely to the latter that Ivass, the Italian insurance authority, according to what has been reconstructed by Il Sole-24 Ore, has sent a very detailed letter collecting information on the relations between Italian intermediaries and the companies belonging to the group in financial difficulty. In particular, the focus is on the Luxembourg company that has been placed under commission and has suspended payments for six months.

In detail, the Authority asked to confirm that the placement of Fwu products actually ended on 3 July. To know whether Fwu has sent notices to Italian intermediaries (and if so, to deliver them urgently to Ivass). The Italian Authority then wants to know what instructions have been given to the sales networks and collaborators operating in Italy, in particular with regard to the recurring premiums of these policies, which were mainly sold in instalment plans. The supervisory authority has also ordered that any complaints and reports be promptly reported, and that the respective sites be urgently informed of the blocking of marketing (and now also of payments). Finally, to set up a dedicated contract point to monitor the crisis. The missive then recalls the importance for intermediaries to provide policyholders with clear and correct information in compliance with the rights enshrined in the Insurance Code. Ivass does what it can in a situation where the companies in question are viglilised by their home country authorities.

And it was precisely on the question of whether or not to continue paying premiums that the Fwu group recently issued guidance to its Italian placement agents in the form of a question and answer. The group explains that 'if you stop paying premiums, the consequences depend on the specific insurance conditions of the contract,' the company says. Although from this point of view there are those who point out that some products provide for a six-month delay period. In short, the doubts of the insured are still many and Ivass invites them to contact its call centre or the consumer associations, which are already aiming to ask for possible compensation precisely from Italian distributors (in the event that the famous Luxembourg 'Safety Triangle' does not work) . "In my opinion, any responsibility on the part of the distributors is to be excluded," explains Rudi Floreani, a lawyer who follows the networks involved, "particularly in relation to the company's solvency index. Hasty decisions, however, are to be avoided. The Eurovita experience teaches.