Wednesday, 11 November 2024.
Italy.
In order to address the increased frequency of natural disasters such as floods and landslides, as of January 1, 2025, Italy requires all businesses to purchase climate insurance to protect their assets.
As such, the law is designed to protect the Italian economy from the escalating costs of climate-related disasters.
Please note that what we covering in this article is only part of a broader law, Law No. 213 know as 2024 Budget Law, enacted by the Government of Italy on 30 December 2023.
Affecting both Italian companies and foreign companies establishment in Italy, this compulsory insurance against catastrophic risks covers damage to land and buildings, plant and machinery, industrial and commercial installations caused by “i sismi, le alluvioni, le frane, le inondazioni e le esondazioni” (earthquakes, landslides, floods and overflows).
Insurance companies can offer such coverage either directly assuming the entire risk, either in coinsurance or in a consortium form. In such last case the consortium must be registered and approved by the Istituto per la Vigilanza sulle Assicurazioni (IVASS) which monitors sectorial stability.
Regarding companies, at least for now there will be no direct sanctions in case of non-compliance other than limited access or blocking of public subsidies.
Insurance companies, under penalty of a fine, will not be able to refuse to underwrite policies with these companies, obviously within their risk tolerance limits.
A subsidiary of the Ministero dell'Economia e delle Finanze will be able to reinsure the risk assumed by insurance companies through the signing of special agreements at market conditions, within yearly limits and up to 50% of the indemnities to be paid by insurers and reinsurers.
Click at the image below to access the complete Law 213 in Italian. The topics discussed above are covered from paragraph 101 to 113 from Article 1.
Last but not least, as already indicated, the above contents is only part of a broader law, the Italian 2024 Budget Law, that deliberates about other issues such as tax measures designed to stimulate investments. About these tax credits, you can read more in the article “Italy introduces measures to promote investment in the southern regions” from UNCTAD (United Nations Conference on Trade and Development) Division on Investment and Enterprise.
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