ITALY - The Italian insurance industry regulator Isvap has criticised the draft pension law, saying it favours its pension industry counterpart Covip.

Isvap’s comment was voiced by the agency’s deputy director general Flavia Mazzarella during an informal hearing at the senate yesterday.

Mazzarella told a senate committee that Covip’s appointment to oversee all the financial players in the pension provision market was potentially damaging.

“It is worth pointing out that the intended power to control companies offering pension insurance products amounts to an evident excess of proxy,” she said.

Mazzarella was referring to the final draft for the law shifting some of the pension burden from the state to employers and employees, which was approved by the cabinet at the beginning of the month.

The draft is a follow-up to the pension reform that was approved last July which saw Covip as sole regulator of the pension market - including the insurers in the market.

Covip’s head Luigi Scimia has also been lobbying at the senate to have his organisation’s powers acknowledged.

The government and the social partners will meet next week to discuss the draft.

Isvap voiced its opinions to the senate, which will in turn express itself on the draft to the government.

Covip, the national institute for statistics, Inps, and the heads of the regions are due to meet senators today, a senate official said.

“On one hand the decree [that launched the pension_reform] appointed Isvap to monitor the stability of the insurance sector and on the other it has stripped it of the most important powers,” Mazzarella said at the hearing.

And she also criticised the decree for aligning pension funds to insurance contracts, because it would “imply a series of constraints” such as the acceptance of Covip-set preliminary regulations.

“The regulation of prudent management of insurance products must be left with Isvap, especially to avoid dangerous grey areas and overlaps with potential damage on those insured,” Mazzarella said.

“We do not see how we can continue to guarantee the solvency and the stability of the whole market if we cannot keep our competences.”

Covip was not available for comment and Isvap was not contactable.