Who can pay the premium for a policy issued in Italy for a non-EU company?

When a non-EU company needs a surety bond or an insurance guarantee in Italy, one issue is routinely overlooked: who is legally entitled to pay the premium to the Italian insurance company?

The fundamental rule: transparency and traceability

Italian anti-money laundering legislation, contained in Legislative Decree no. 231 of 21 November 2007 (as amended by Legislative Decree no. 90 of 25 May 2017, transposing the Fourth EU Anti-Money Laundering Directive 2015/849), imposes stringent customer due diligence obligations on all insurance-sector operators, including insurers, intermediaries and brokers.

In practice, before accepting any payment the obliged entity must:

• identify the customer and verify their identity (Art. 18(1)(a));
• identify the beneficial owner and verify their identity (Art. 18(1)(b));
• obtain information on the purpose and intended nature of the business relationship (Art. 18(1)(c));
• conduct ongoing monitoring throughout the relationship (Art. 18(1)(d)).

In other words, the legislation does not merely require verification of how much is being paid. It mandates knowing who is paying and why.

Where the party making payment does not coincide with the policyholder, enhanced due diligence obligations are triggered. Failure to comply exposes all parties involved to serious consequences.

The three parties entitled to pay the premium

Where a policy is issued in Italy for a non-EU company, there are only three parties who may lawfully pay the premium.

1. The policyholder directly

This is the most straightforward and risk-free solution. The company named in the policy pays the premium directly to the Italian insurance company via bank transfer from its own account. In this case:

• the traceability of the financial flow is immediate;
• the paying party coincides with the policyholder;
• customer due diligence obligations are satisfied in the ordinary way.

Even if the company is not based in Italy, direct payment by international bank transfer is entirely lawful and is the route preferred by insurance companies.

2. The fiscal representative in Italy

Non-EU companies that operate in Italy through a fiscal representative (appointed pursuant to Article 17(3) of Presidential Decree no. 633/1972) may instruct that representative to make the premium payment. The fiscal representative:

• is a formally recognized and identifiable entity;
• acts on the basis of documented authority and a defined legal role;
• is itself subject to anti-money laundering obligations as an intermediary.

This solution is particularly common in the context of the VIES guarantee, where the non-EU company has already appointed a fiscal representative to operate for VAT purposes in Italy.

3. A third party holding a notarized power of attorney

A party other than the policyholder — for instance a consulting firm or foreign intermediary — may pay the premium on the customer’s behalf, but only if they hold a formal and verifiable legal basis. In practice, this requires:

• an individual notarized power of attorney, issued by the policyholder in favor of the third party;
• authentication of the signature by a notary in the country of origin;
• legalization of the document by Apostille under the Hague Convention of 5 October 1961.

The power of attorney must be individual — that is, issued by each separate customer — and must expressly state the authority to make payments on behalf of the principal. A generic or blanket power of attorney is not sufficient.

The critical case: foreign consulting firms paying on behalf of multiple clients

In international market practice, it is common to encounter foreign consulting firms that operate according to the following model:

• they collect premiums from various clients in their home country;
• they make a single cumulative bank transfer to the Italian insurance company;
• they do not hold individual notarized powers of attorney for each client.

From the consulting firm’s perspective, this is simply a logistical service. Under Italian law, however, it is a non-compliant arrangement.

The problem is twofold:

There is no legal nexus between the paying party and the true policyholder. The insurance company receives a transfer from a third party that holds no formal authority to act in the name and on behalf of the customer. Article 22(1) of D.Lgs. 231/2007 provides that customers are required to provide all information necessary to permit adequate verification. If payment arrives from a different party, that information is incomplete or unverifiable.

The traceability of financial flows is compromised. A cumulative transfer that pools the premiums of multiple clients makes it impossible to establish with certainty the origin of funds for each individual policy, in breach of the cardinal principle of anti-money laundering legislation.

What those who accept unauthorized payments risk

The consequences are not merely theoretical. Article 55 of D.Lgs. 231/2007 provides for criminal penalties for failure to perform customer due diligence, with imprisonment from six months to one year and a fine of €10,000 to €30,000 for the party responsible who fails to permit identification of the beneficial owner of the transaction.

For insurance intermediaries and insurance companies, accepting payments from unauthorized parties gives rise to:

• breach of customer due diligence obligations (Articles 17-23 of D.Lgs. 231/2007);
• inability to identify the beneficial owner of the transaction (Article 20);
• obligation to file a suspicious transaction report with the Financial Intelligence Unit (Article 35);
• administrative and, in serious cases, criminal sanctions (Articles 55-67);
• disciplinary liability for intermediaries registered with IVASS (the Italian insurance supervisor).

IVASS Provision no. 111 of 13 July 2021, which amends IVASS Regulation no. 44/2019, has further strengthened these obligations, requiring insurers and intermediaries to document carefully the verifications performed and the reasons for risk assessments, with particular attention to premiums paid by third parties.

The three compliant solutions

Those operating in the market for insurance guarantees for non-EU companies have three safe routes for managing premium payment without risk:

Solution	How it works	Main advantage
Direct payment	Each customer pays the premium for their own policy by bank transfer from their own account.	Maximum transparency. No additional documentation required.
Via fiscal representative	The Italian fiscal representative, already appointed for VAT operations, makes the payment on the customer’s behalf.	Party already identified and traceable within the Italian system.
Via individual notarized power of attorney	The consulting firm pays on the customer’s behalf, but on the basis of a notarized power of attorney with Apostille, issued individually by each customer.	Allows the foreign firm to continue assisting its clients, in compliance with the law.

The third solution is the one that permits foreign consulting firms to continue operating as intermediaries, provided they obtain the correct documentation. The cost and effort of formalization are more than offset by the legal certainty it provides.

Frequently asked questions

The information contained in this article is for informational purposes only and does not constitute legal, tax or insurance advice. Anti-money laundering legislation is subject to frequent updates and its implications vary depending on the specific circumstances of each transaction. To identify the solution best suited to your situation, consult a qualified professional or contact our team directly.

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