The agent was real. The policies were not.

Corporate liability, reliance and compensation strategy: an insurance case from some years ago, and a question that is still current.

In compensation litigation, identifying the material author of the wrong does not necessarily exhaust the problem. Vicarious liability, principal-agent relationships and the criteria for attributing conduct to a company belong, of course, to the ordinary toolbox of civil law; what is more interesting, in practice, is understanding when those criteria allow the focus of the dispute to shift, usefully, from the material author of the act to the organisation within which he was able to operate.

A case I handled many years ago offers a rather clear example.

A businessman had entrusted substantial sums to an agent of a leading insurance company for the subscription of a series of single-premium life policies.

This was not an unauthorised intermediary, nor someone falsely claiming to belong to the company’s network. The agent was genuine, well known and respected in the area, and had long operated successfully for that company. He was, in short, exactly the person a client could consider it normal to approach for that kind of transaction.

The mechanism of the fraud was also particularly insidious, because not everything was fake. Some policies had actually been issued by the company and later surrendered. For others, the sums received by the agent had never reached the company, while the client was handed documentation closely resembling the authentic one.

The fraud was thus embedded within a real relationship, alternating regular and irregular transactions. An essential difference from the case, frequent today, of the fake intermediary who abusively uses the name or brand of a company to which he is wholly extraneous.

From the criminal trial to the company’s liability

The affair involved numerous victims and gave rise to criminal proceedings. Several injured parties had relied on the same professional and were awaiting the progress of the investigation, which however moved slowly and seemed unlikely to produce, within a reasonable time, anything concretely useful for them.

My client was by then very elderly. At that point the agent’s personal liability no longer seemed to me the point on which to concentrate. What needed verifying was whether the conditions existed for directing the compensation claim against the company as well.

Not because the company had taken part in the fraud, nor on the basis of some generic assertion that a business should always answer for whatever is done by those who operate using its name. The question was narrower: how much had the position the company had conferred on the agent contributed to making the conduct possible and, above all, credible in the client’s eyes?

It was on that ground that I decided to bring a separate civil action.

The company objected, among other things, that the agent had acted for exclusively personal purposes, outside his remit and without any benefit to the firm.

The issue became the one well known in the case law on Article 2049 of the Italian Civil Code: “necessary occasionality” (occasionalità necessaria). It is not required that the principal wanted or authorised the wrong; what must be verified is whether the tasks entrusted created a situation apt to facilitate it or make it possible.

In the concrete case, the agent’s position had weighed evidently on the formation of the client’s reliance. This was not simply the abusive use of a company’s name: it was the company itself that had conferred on the author of the conduct the professional quality in which he presented himself to the public.

In the course of the evidence it also emerged that the company had already detected anomalies in the agent’s conduct and had begun subjecting him to closer checks. The question of reliance thus intertwined with that of supervision: not only what position had been conferred on the intermediary, but what tools the company had to govern the risk generated by its own commercial network, and what had already surfaced before the situation collapsed.

The Court upheld the claim and held the company liable, jointly with the agent, for the consequences of the wrong. The company did not pay voluntarily; a formal demand for payment had to be served, after which a very substantial sum was paid.

Could the same thing happen today?

The facts date back many years, and it would be easy to file them away as the product of a bygone phase of insurance distribution. Much has indeed changed, and it would be far harder today to imagine the material repetition of premium collection by the methods then used.

But that does not mean the underlying problem has disappeared.

To assess its currency one must distinguish two levels: the enduring relevance of the legal question, and the concrete possibility that similar conduct may still occur today.

The framework of insurance distribution is now far more structured. The Italian Insurance Code and its implementing regulations lay down specific rules on premium collection, on the segregation of sums received by intermediaries, on payment methods, on disclosure duties and on the supervision of the distribution network. Article 118 of the Insurance Code itself provides, on the conditions set by the provision, that premium payments made in good faith to the intermediary or his collaborators are deemed made directly to the company.

The practical methods of payment have also changed profoundly. In the old case the company went so far as to argue that the client had contributed to his own loss by handing the agent large sums in cash. The Court rejected the argument, also in the light of the rules in force at the time.

Today an analogous situation would necessarily be assessed in a different context. But the core of the affair was not, at bottom, the cash: it was the abuse, by a genuine intermediary, of the trust flowing from his actual membership of the company’s network.

And that is a phenomenon that does not belong only to the past.

A case that emerged in 2025 concerned, according to the investigators’ reconstruction, an insurance intermediary who between 2016 and 2023 allegedly had clients pay sums destined for life policies into an account traceable to himself, without passing them on to the company. The policies were allegedly never issued, while clients received apparently regular documentation. The amounts in dispute ran to several million euros.

The similarity to the old case is significant, but so is the difference: cash can be replaced by a bank transfer, the paper document by an apparently regular digital certificate or communication. What remains is the informational and fiduciary advantage of the genuine intermediary over the client.

Nor is this merely a matter of isolated news stories. In its supervisory activity IVASS, the Italian insurance authority, continues to record irregularities involving policies not registered after premium collection, premiums not passed on to companies, improper transactions on life policies, forged documentation and shortcomings in the control of collaborator networks.

The rules have changed and controls have increased. The risk has not been eliminated.

The case law, too, has continued, on a different level, to grapple with corporate liability for wrongs committed within the distribution network.

Two years after the decision in the case recounted here, the Supreme Court addressed a strikingly similar one: an agent had offered clients a non-existent insurance-financial product and had appropriated the sums received. In judgment no. 18860 of 2015 the Court reaffirmed the centrality of the nexus of necessary occasionality, giving weight to the fact that the tasks entrusted to the agent had made the conduct possible or easier.

Subsequent case law has continued to develop the problem with respect to the more complex articulations of the distribution network, such as sub-agents; as recently as 2024 the Supreme Court returned to the possibility of attributing to the company the consequences of unlawful activity carried out within the network.

Naturally, the date of a Supreme Court ruling does not prove the currency of the phenomenon behind it: by the time a dispute reaches the Court, the facts may be many years old. But recent case law documents the enduring relevance of the legal problem; the cases emerging in recent years and the supervisory record document, separately, the persistence of the material phenomenon.

Same question, more complex fact patterns

Greater regulation does not necessarily make cases easier to solve. If anything, it makes it even more important to distinguish situations which everyday language lumps together under the generic label of “insurance fraud”.

A genuine intermediary may collect a premium in the exercise of his functions and appropriate it; he may offer a non-existent product indicating payment methods extraneous to the company’s normal channels; the conduct may come from an agent, or from a collaborator or sub-agent using the structure’s premises, forms and tools. Different again is the case of the complete outsider who clones the company’s identity or abusively uses its brand.

From the standpoint of civil liability, these are very different situations.

In the first cases one must reconstruct the relationship between intermediary and company, the powers conferred, the way the transaction was carried out, the reliance generated by the organisation and any warning signs already available. In the last, the appearance may have been built entirely by an extraneous third party, without any contribution from the company whose name was abused.

The spread of digital tools adds further elements of verification: where the payment was made, in whose name the account stood, through which channel the communications arrived, whether the documentation was actually generated by the company’s systems, what powers the intermediary had and whether anomalies had already surfaced.

The general question, then, may have remained similar. The elements needed to answer it have, if anything, become more articulated.

Reconstructing the whole chain of responsibility does not, of course, mean looking behind the material author of the wrong for a bigger, more solvent company to present with the bill. There must be a genuine legal criterion of attribution.

That is precisely what makes the concrete case interesting: understanding whether the organisation merely suffered, like the client, the initiative of an extraneous party, or whether it created — through the functions conferred on one of its own members — the conditions that allowed the wrong to be committed with that particular effectiveness.

In the case I have recounted, this was the decisive step. While the criminal proceedings naturally sought to establish the agent’s personal liability, the civil action asked a different question: what part of the risk flowing from that conduct could legally be attributed also to the organisation that had placed the agent in the position he abused?

A choice can be right even when it consists in stopping

The affair had one final passage which I consider equally significant.

The judgment was favourable, but in my view left room to obtain something more on certain economic points. There were therefore reasons to consider an appeal.

In the meantime, however, the client had grown very old, and his personal circumstances made it particularly important to consolidate the result already concretely achieved.

I decided not to appeal.

Litigation strategy does not always consist in pursuing to the end every avenue abstractly available. Sometimes the problem is exactly the opposite: establishing when the possible gain no longer justifies the risk that must be assumed to obtain it.

The affair had begun as a fraud committed by an insurance agent. Had it remained only that, the client would probably have gone on waiting, together with the other victims, for the outcome of the criminal proceedings.

The possibility of a different protection emerged by shifting attention, for a moment, away from the most obvious question. Not only who had taken the money, but within which organisation he had been able to do so, thanks to which position, and exploiting which reliance.

There is no formula valid for every dispute. But there is a question which, in civil litigation, I continue to find useful:

Which step of the story are we taking for granted?

Sometimes that is exactly where the perspective of the case changes.

Essential references: Article 2049 of the Italian Civil Code — liability of masters and principals. Articles 117-118 of Legislative Decree no. 209 of 7 September 2005 (Insurance Code) — segregation of funds and premium payment to intermediaries. Cass. civ., sez. III, 5 March 2009, no. 5370 — principal’s liability and necessary occasionality. Cass. civ., sez. III, 24 September 2015, no. 18860 — insurance agent’s wrong and company liability. Cass. civ., sez. III, 26 September 2019, no. 23973 — company liability for the sub-agent’s activity. Cass. civ., sez. I, ord. 14 March 2024, no. 6795 — sub-agent’s unlawful activity and attribution to the company. IVASS, Annual Report for 2025, published 18 June 2026 — supervision of intermediaries’ conduct.