Din il-liġi tirregola n-negozju tal-assigurazzjoni, inklużi l-awtorizzazzjoni, is-superviżjoni, u r-rekwiżiti finanzjarji għall-kumpaniji tal-assigurazzjoni. L-għan tagħha huwa li tistabbilixxi qafas legali għall-operat tal-industrija tal-assigurazzjoni.
insurance. 1st October, 1998 ACT XVII
1998, as amended by Acts XVII
2002, XIII
2004, XII
2006 and XX
2007; Legal Notice 426
2007; and Acts III and XVII
2009, XIX
2010, X
2011, XX
2013 ,XXXIII
2015 ,XXVI
2018, V
2020 and Act XLVI
2021 and XXXV
2023 and XXXII
2024. ARRANGEMENT
ACT Part I. Part II. Part III. Part IV. Part V. Part VI. Part VII. Part VIIA. Part VIII. Part IX. Part X. Part XI. Part XII. Articles 1-2 3-4 5 - 13 14 - 18I 14 - 18G 18H - 18I Preliminary Supervision
Business
Insurance Authorisation for carrying on Business
Insurance Conditions for carrying on Business
Insurance Title I: Financial Requirements Title II: Governance Accounts, Actuarial Investigations and Financial Statements 19 - 24 Powers
Intervention 25 - 28 Supervision
Authorised Insurance and Reinsurance 29 - 32 Underakings Group Supervision 32A - 32E Transfer
Business
Insurance 33 - 37 Acquisition and Disposal
Shares, Withdrawal, Dissolution and Winding up 38 - 42 Obligations on Undertakings 43 - 48C Protection and Compensation Fund 49 - 54 General Provisions 55 - 69 First Schedule Second Schedule Third Schedule Fourth Schedule SCHEDULES Provisions relating to Lloyd’s Classes
long term business Classes and groups
classes
general business Provisions relating to insurance agents and managers INSURANCE BUSINESS PART I PRELIMINARY Short title. 1. The short title
this Act is the Insurance Business Act. Interpretation and scope. Amended by: XVII. 2002.236; XII. 2006.76; XX. 2007.126; XVII. 2009.30; X. 2011.74; XXXIII. 2015.4; XXVI.2018.61; V.2020.41; XXXV.2023.44; XXXII.2024.35. 2.
insurance, means any form or medium
marketing activity or communication disseminated to the public by means
all types
media, other than a prospectus, which promotes the purchase or procurement
a service or product and which is addressed by an authorised insurance undertaking to a client or potential client; "approved actuary" and "actuary" have the meaning assigned to them by article 22
insurance, or to a m a t t e r c o n n e c t e d t h e r ew i t h o r a n c i l l a r y t h e r e t o , m e a n s a n authorisation or a deemed authorisation under this Act, and "authorised" shall be construed accordingly; "authorised insurance undertaking" means an undertaking, which has received authorisation pursuant to article 7 to carry on direct general business and, or long term business, and includes an undertaking authorised to carry on direct and reinsurance business; "authorised reinsurance undertaking" means an undertaking which has received authorisation pursuant to article 7 to carry on business restricted to reinsurance; "body corporate" means any entity having a legal personality distinct from that
its members and also includes a foreign corporation; "branch" m eans premises o f an authorised insurance and reinsurance undertaking, other than its head
fice, from which the business
insurance is carried on; "business
insurance" means the effecting and carrying out
contracts
insurance
such class or classes
long term business or class or classes or part classes
general business as respectively specified in the Second Schedule and Part I
the Third Schedule, and, without prejudice to anything contained in any other law, includes (a) the effecting and carrying out, by a person not carrying on business
banking,
(i) contracts for fidelity bonds, performance bonds, administration bonds, bail bonds or customs bonds or similar contracts
guarantee, being contracts effected by way
business (and not merely incidentally to some other business carried on by the person effecting them) in return for the payment
one or more premiums; (ii) capital redemption contracts based on actuarial INSURANCE BUSINESS calculation whereby, in return for single or periodic payments agreed in advance, commitments
specified duration and amount are undertaken; (iii) contracts to manage the investments
pension funds, and, in relation to contracts to manage the investments
pension funds, the expression "a person not carrying on business
banking" includes "a person not carrying on investment services"; (b) any business carried on in connection with or ancillary to business
insurance; (c) unless otherwise specified, business
reinsurance; "captive insurance undertaking" means an authorised insurance undertaking, owned either by a financial undertaking, other than an insurance or reinsurance undertaking or a group
insurance or reinsurance undertakings within the meaning
article 2, or by a non-financial undertaking, the purpose
which is to provide insurance cover exclusively for the risks
the undertaking or undertakings to which it belongs or
an undertaking or undertakings
the group
which it is a member; "captive reinsurance undertaking" means an authorised reinsurance undertaking, owned either by a financial undertaking, other than an insurance or reinsurance undertaking or a group
insurance or reinsurance undertakings within the meaning
article 2, or by a non-financial undertaking, the purpose
which is to provide reinsurance cover exclusively for the risks
the undertaking or undertakings to which it belongs or
an undertaking or undertakings
the group
which it is a member; "cell" has the same meaning as is assigned to it by the Companies Act; "cell company" has the same meaning as is assigned to it by the Companies Act; "close links" means a situation in which two or more natural or legal persons are linked by control or participation, or a situation in which two or more natural or legal persons are permanently linked to one and the same person by a control relationship; "commitment" means a commitment represented by any one or more
the kinds
classes
long term business contained in the Second Schedule; "competent authority" means the Malta Financial Services Authority established by the Malta Financial Services Authority Act; "conditions" includes obligations and restrictions; "Conduct
Business Rules" means Rules relating to conduct
business issued by the competent authority under various articles
this Act and under any regulations made thereunder; "contract
insurance" and "contract", in relation to business
insurance, mean an agreement in which an insurer agrees, for a INSURANCE BUSINESS consideration, to pay to or for the account
the insured a sum
money or other consideration, whether by way
indemnity against loss, damage or liability or otherwise, on the happening
a specified event with respect to which there is an element
uncertainty as to when or whether it will take place; "control" means the relationship between a parent undertaking and a subsidiary undertaking, as set out in Article 22
Directive 2013/34/EU
the European Parliament and
the Council
26 June 2013 on the annual financial statements, consolidated financial statem ents and related reports
certain types
undertakings, amending Directive 2006/43/EC
the European Parliament and
the Council and repealing Council Directives 78/ 660/EEC and 83/349/EEC, or a similar relationship between any natural or legal person and an undertaking; "controller", in relation to a body corporate, is a person who, alone or together with others, exercises the power to determine the financial and operating policies
the body corporate; "country
the commitment" means any country where the policyholder has his habitual residence or, if the policyholder is a legal person, the country where the latter’s establishment, to which the contract relates, is situated; "country outside Malta" means and includes any country, territory or place outside Malta; "director", in relation to an undertaking, includes an individual occupying the position
a director
the undertaking, by whatever name he may be called, empowered to carry out substantially the same functions in relation to the direction
the undertaking as those carried out by a director and, in respect
a third country insurance undertaking or a third country reinsurance undertaking, includes a member
a local board, and the person designated as the representative
that undertaking for the purpose
article 11
the information in legible form; "EEA State" means a State which is a contracting party to the agreement on the European Economic Area signed at Oporto on 2 May, 1992 as amended by the Protocol signed at Brussels on the 17th March, 1993 and as amended from time to time; "EIOPA" means the European Insurance and Occupational Pensions Authority established in terms
article 1
Regulation (EU) No 1094/2010; "establishment" means the head
fice, or any branches
an authorised insurance undertaking or an authorised reinsurance undertaking; "European insurance undertaking" means an undertaking having its head
fice in a Member State or an EEA State, other than Malta, pursuing the activity
direct insurance within the meaning INSURANCE BUSINESS
the Solvency II Directive, which has received authorisation in accordance with Article 14
the Solvency II Directive; "European regulatory authority" means the supervisory authority or supervisory authorities as defined in Article 13
the Solvency II Directive, designated by a Member State or EEA State, other than Malta, empowered by law or regulation to supervise insurance or reinsurance undertakings; "European reinsurance undertaking" means an undertaking having its head
fice in a Member State or an EEA State, other than Malta, pursuing business restricted to reinsurance within the meaning
the Solvency II Directive which has received authorisation in accordance with Article 14
the Solvency II Directive; "European right" means the entitle-ment
an authorised insurance undertaking, authorised reinsurance undertaking, European insurance undertaking or a E uropean reinsurance undertaking to establish a branch, or provide services, in a Member State or an EEA State, other than that in which it has its head
fice (a) in accordance with the Treaty
Rome as applied in a Member State or an EEA State; (b) subject to the requirements
the Solvency II Directive and subject to any regulations made under this Act, or Insurance Rules issued by the competent authority pursuant to this Act, implementing such requirements; "European Systemic Risk Board" means the European Systemic Risk Board established by Regulation (EU) No 1092/2010
the European Parliament and
the Council
24 November 2010 on European Union macro-prudential oversight
the financial system and establishing a European Systemic Risk Board; "financial undertaking" means any
the following entities: (a) a credit institution, a financial institution or an ancillary banking services undertaking within the meaning
sub-paragraphs
paragraph
Directive 2013/36/EU respectively; (b) an insurance undertaking, or a reinsurance undertaking or an insurance holding company within the meaning
the Solvency II Directive; (c) an investment firm or a financial institution within the meaning
point 1
Directive 2014/65/ EU; or (d) a mixed financial holding company within the meaning
Directive 2002/87/EC; "financial year" shall be construed in accordance with article 19
undertakings that: (a) consists
a participating undertaking, its subsidiaries and the entities in which the participating undertaking or its subsidiaries hold a participation, as well as undertakings linked to each other by a relationship as set out in Article 22
Directive 2013/34/EU
the European Parliament and
the Council
26 June 2013 on the annual financial statements, consolidated financial statements and related reports
certain types
undertakings, amending Directive 2006/43/ EC
the European Parliament and
the Council and repealing Council Directives 78/660/EEC and 83/349/ EEC; or (b) is based on the establishment, contractually or otherwise,
strong and sustainable financial relationships among those undertakings, and that may include mutual or mutual-type associations, provided that: (i) one
those undertakings effectively exercises, through centralised coordination, a dominant influence over the decisions, including financial decisions,
the other undertakings that are part
the group; and (ii) the establishment and dissolution
such relationships for the purposes
the Solvency II Directive are subject to prior approval by the group supervisor, where the undertaking exercising the centralised coordination shall be considered as the parent undertaking, and the other undertakings shall be considered as subsidiaries; "guarantee fund" means the body referred to in Article 10
Directive 2009/103/EC
the European Parliament and
the Council
16 September 2009 relating to insurance against civil liability in respect
the use
motor vehicles, and the enforcement
the obligation to insure against such liability; "holding company" has the same meaning as is assigned to the term "parent company" in the Companies Act; "inspector" means a person appointed as such by the competent authority under article 30
the European Parliament and
the Council
20 January 2016 on insurance distribution (recast), as amended from time to time, and includes any delegated acts and any technical standards that have been or may be issued thereunder; "insurance manager" means a person enrolled as such under the Insurance Distribution Act; INSURANCE BUSINESS "Insurance Rules" means rules in respect
the business
insurance issued by the competent authority under various articles
this Act and under any regulations made thereunder; "insured" means the party to whom, or on whose account, or to whose beneficiaries, a sum
money or other consideration is payable under a contract
insurance on the happening
a specified event; "insurer" means the party to a contract
insurance who agrees to pay a sum
money or other consideration on the happening
a specified event; "Lloyd’s" means the society and corporation incorporated by Lloyd’s Act, 1871,
the United Kingdom; "long term business" has the meaning assigned to it by article 5
membership
th e European U nion an d mem bersh ip
, or affiliation to, or relationship with, any international, global or regional organisations or grouping
countries or out
any treaty, convention or other international agreement, however called, w he t h e r b i la t e r a l o r m u lt i l a t e r a l , i n c l u d i n g M e m o r a n d a o f Understanding, to which Malta is a party; " M e m b e r St a t e " m e a n s a M e m b e r St a t e o f t h e E u r o p e a n Communities; "Minister" means theMinister responsible for the regulation
Financial Services; "money laundering" has the same meaning as is assigned to it by the Prevention
Money Laundering Act; "motor vehicle" has the same meaning as assigned to it by article 2
the Motor Vehicle Insurance (Third Party Risks) Ordinance; "motor vehicle liability insurance business" means the business
insurance in class 10 as specified in Part I
the Third Schedule; "
ficer", in relation to an undertaking, includes a director, manager or company secretary or any person effectively acting in such capacity whether formally appointed or not; "outsourcing" means an arrangement
any form between an authorised insurance or reinsurance undertaking and a service provider, whether a supervised entity or not, by which that service provider performs a process, a service or an activity, whether d i r e c t l y o r b y s u b - o u t s o u r c i n g , w h i c h w o u l d o t h e r w i se b e performed by the authorised insurance or reinsurance undertaking itself, and "outsource" shall be construed accordingly; "overseas regulatory authority" means an authority in a country or territory outside Malta, that is not a Member State or EEA State, which exercises any regulatory or supervisory function in relation to financial services corresponding to a function
the competent authority as defined in the Malta Financial Services Authority Act; "own funds" shall be construed in accordance with Insurance INSURANCE BUSINESS Rules made by the competent authority for the purposes
this Act; "participation" means the ownership, direct or by way
control,
20% or more
the voting rights or capital
an undertaking; "participating undertaking" means an undertaking which is either a parent undertaking or other undertaking which holds a participation, or an undertaking linked with another undertaking by a relationship as set out in Article 22
Directive 2013/34/EU
the European Parliament and
the Council
26 June 2013 on the annual financial statements, consolidated financial statements and related reports
certain types
undertakings, amending Directive 2006/43/EC
the European Parliament and
the Council and repealing Council Directives 78/660/EEC and 83/349/EEC; "policy", in relation to business
insurance, means and includes a policy or a similar document, by whatever name it may be called, evidencing a contract
insurance; "policyholder" means the person who for the time being is the legal holder
the policy for securing the contract with the insurer; "premium" means the consideration paid or payable by an insured under a contract
insurance; "prescribed" means prescribed by regulations made under this Act; "qualifying shareholding" means a direct or indirect holding in an undertaking which represents ten per centum or more
the share capital or
the voting rights, taking into account the voting rights as set out in Articles 9 and 10
Directive 2004/109/EC
the European Parliament and
the Council
15 December 2004 on the harmonisation
transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market, and amending Directive 2001/34/EC, as well as the conditions regarding aggregation thereof laid down in Article 12
that Directive, or which makes it possible to exercise a significant influence over the management
the undertaking in which that holding subsists, and "qualifying shareholder" shall be construed accordingly: Provided that, in determining whether the criteria for a qualifying shareholding are fulfilled, the competent authority shall not take into account voting rights or shares which investment firms or credit institutions may hold as a result
providing the underwriting
financial instruments and, or placing
financial instruments on a firm commitment basis in terms
point
Section A
Annex 1 to Directive 2014/65/EU
the European Parliament and
the Council
15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/ 61/EU (recast), provided that those rights are, on the one hand, not exercised or otherwise used to intervene in the management
the issuer and, on the other, disposed
within one year
acquisition; "reconstruction" has the same meaning as in the Companies Act; "regulated market" means either
the following: INSURANCE BUSINESS (a) in the case
a market situated in Malta, a market authorised in terms
the Financial Markets Act; (b) in the case
a market situated in a Member State or an EEA State, other than Malta, a regulated market as defined in point
Directive 2014/65/ EU
the European Parliament and
the Council
15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/ EU (recast), as amended from time to time; or (c) in the case
a market situated in a non-Member State or non-EEA State, a financial market which fulfils the following conditions: (
a quality comparable to that
the instruments dealt in on the regulated market or markets in Malta; "Regulation (EU) No 1094/2010" refers to Regulation (EU) No 1094/2010
the European Parliament and
the Council
24 November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC; "reinsurance" means one
the following: (
cover by a reinsurance undertaking to an institution that falls within the scope
Directive (EU) 2016/2341
the European Parliament and
the Council; "risk situated in Malta" means and includes (
any type, any risk related to any vehicles registered in Malta: Provided that, where a motor vehicle is dispatched from a Member State or an EEA State into Malta, the risk is deemed to be situated in Malta, immediately upon acceptance
delivery by the purchaser for a period
thirty days, even though the vehicle has not been formally registered in Malta; (c) in the case where the insurance relates to travel or INSURANCE BUSINESS holiday risks, whatever the class concerned, any risk related to travel or holiday if the policy covering the risk is
a duration
four months or less and the policy is taken out in Malta; (d) in the case where the insurance relates to any risk
any kind, other than a risk specified in the foregoing paragraph (a), (b) or (c), any risk
any such kind if the policyholder has his habitual residence in Malta or, where the policyholder is a legal person if the establishment, to which the contract relates, is situated in Malta: Provided that, for the purposes
this paragraph, Malta shall include an exclusive economic zone area and environment protection area as defined in the Exclusive Economic Zone Act; "risk situated outside Malta" means a risk which is not a risk situated in Malta; "subsidiary" has the same meaning as is assigned to the term "subsidiary undertaking" by the Companies Act; "Solvency II Directive" means Directive 2009/138/EC
the European Parliament and
the Council
25 November 2009 on t he taki ng -u p and pu rsui t
t he b usi ness o f In surance and Reinsurance (Solvency II) (recast), as amended from time to time, and includes any delegated acts and any technical standards that have been or may be issued thereunder; "technical provisions" shall be construed in accordance with article 18E; "third country insurance undertaking" means an undertaking, other than a European insurance undertaking, which would require authorisation as an authorised insurance undertaking pursuant to article 7 as if its head
fice were situated in Malta; "third country reinsurance undertaking" means an undertaking, other than a European reinsurance undertaking, which would require authorisation as an authorised reinsurance undertaking in accordance with article 7 as if its head
fice were situated in Malta; "undertaking" refers to an undertaking whose head
fice is in Malta or in a country outside Malta; "undertaking whose head
fice is in Malta" means a limited liability company formed and registered in Malta in accordance with the Companies Act; "working days" shall not include Saturdays and the days referred to in the National Holidays and Other Public Holidays Act. Scope.
this Act is, in part, to transpose and implement the provisions
: (
the European Parliament and
the Council
16 April INSURANCE BUSINESS 2014 amending Directives 2003/71/EC and 2009/138/ EC and Regulations (EC) No 1060/2009, (EU) No 1094/2010 and (EU) No 1095/2010 in respect
the powers
the European Supervisory Authority (European Insurance and Occupational Pensions Authority) and the European Supervisory Authority (European Securities and Markets Authority); (c) Directive 2009/103/EC
the European Parliament and
the Council
16 September 2009, relating to insurance against civil liability in respect
the use
motor vehicles, and the enforcement
the obligation to insure against such liability, as amended from time to time; and (d) any other European Union Directives and Regulations that may be issued and amended from time to time relating to the regulation
and the prudential requirements applicable to insurance and reinsurance undertakings, and consequently this Act and any regulations and Insurance Rules issued thereunder shall be interpreted and applied accordingly.
BUSINESS
INSURANCE 3. It shall be the duty
the competent authority to carry out the functions assigned to it by or under this Act and any regulations, Insurance Rules or Conduct
Business Rules made thereunder and to ensure that insurance and reinsurance undertakings carrying on the business
insurance in or from Malta comply with the provisions
this Act and
any regulations made thereunder, with any Insurance Rules and Conduct
Business Rules made and directives issued by the competent authority in virtue
this Act and
any regulations made thereunder and with the conditions specified in their respective authorisation. Competent authority. Amended by: XVII. 2002.237. Substituted by: XII. 2006.77; X. 2011.75. Amended by: XXXIII. 2015.5; XXVI.2018.62. 4.
the competent authority. Amended by: XVII. 2002.238; XII. 2006.78; X. 2011.76; XX. 2013.
insured persons, policy holders, beneficiaries and the general public; (b) the protection
the reputation
Malta, taking into account Malta's international commitments; and (c) the promotion
competition and choice.
the foregoing, the competent authority shall, in the exercise
its duties, take into account the convergence in respect
supervisory tools and supervisory practices in the application
this Act, and
the regulations and Insurance Rules made thereunder, pursuant to the Solvency II Directive.
sub-article
EIOPA; (b) the competent authority shall comply with the guidelines and recommendations issued by EIOPA in accordance with Article 16
Regulation (EU) No 1094/2010 and, if not, shall state the reasons for not doing so; and (c) national mandates conferred on the competent authority shall not inhibit the performance
its duties under this Act or as a member
EIOPA.
Business Rules as may be required for carrying into effect any
the provisions
this Act and
any regulations made thereunder. The competent authority may amend or revoke such Insurance Rules and, Conduct
Business Rules, and any amendment or revocation thereof, shall be
ficially communicated to the persons concerned.
Business Rules, as may be required for the purpose
implementing any guidelines, recommendations issued by EIOPA under Article 16
Regulation (EU) No 1094/2010, for the implementation
the Solvency II Directive.
Business Rules shall be binding on authorised insurance undertakings and others as may be specified therein. PART III AUTHORISATION FOR CARRYING ON BUSINESS
INSURANCE Classification
business
insurance and ancillary risks. Amended by: XVII. 2002.239; XII. 2006.79; XXXIII. 2015.7, 77. 5.
sub-article
this Act, business
insurance is divided into long term business and general business; and "long term business" means business
insurance
any
the classes specified in the Second Schedule, and "general business" means business
insurance
any
the classes specified in Part I
the Third Schedule.
classes as specified in the Third Schedule may also insure risks included in another class in the said Schedule without the need to obtain authorisation in respect
such risks provided that the risks fulfil all the following conditions: (
sub-article
the Third Schedule shall not be regarded as risks ancillary to other classes: Provided that, legal expenses insurance as set out in class 17 may be regarded as a risk ancillary to class 18, where the conditions laid down in sub-article
the following conditions are fulfilled: (
, or in connection with, the use
sea-going vessels.
this article, a contract
insurance is to be treated as falling within the Second Schedule, notwithstanding the fact that it contains related and subsidiary provisions within general business class 1 or 2
the Third Schedule to the Act, if its principal object is that
a contract falling within the Second Schedule to the Act and if such contract is effected or carried out by an undertaking authorised under article 7 to carry on long term business class 1.
this article, provide that general business contracts
insurance
a kind specified in the Insurance Rules, contain such conditions or include such requirements or arrangements as may be determined by such Insurance Rules. 6.
insurance unless authorised by the competent authority.
a European right.
the competent authority, may make regulations under this article (a) declaring certain services and activities ancillary to or connected with business
insurance as not constituting business
insurance for any or all
the purposes
this Act; (
the provisions
this sub-article.
a doubt as to whether an activity constitutes business
insurance, or whether business
insurance is or is not Restriction on carrying on business
insurance. Amended by: XVII. 2002.240; XII. 2006.80; XXXIII. 2015.8. INSURANCE BUSINESS being carried on in or from Malta, the matter shall be conclusively determined by the competent authority. Authorisation by competent authority for carrying on business
insurance. Amended by: XVII. 2002.241; XXXIII. 2015.9. 7.
an undertaking whose head
fice is in Malta, in or from Malta or in or from a country outside Malta; (b) in the case
a third country insurance undertaking or a third country reinsurance undertaking, in or from Malta, such
the classes
business
insurance specified in the Second or Third Schedule, or such parts
those classes, as may be specified in the authorisation.
reinsurance; and an undertaking may not carry on business
reinsurance by virtue
an authorisation under this article unless the authorisation expressly extends to such business.
fice is in Malta to carry on business
insurance in a Member State or EEA State, in exercise
a European right, subject to a notification to the competent authority as determined in accordance with regulations made under article 64.
insurance or reinsurance in a class or classes
insurance, intends to extend its business to a class or to classes
business other than those classes for which it is already authorised.
determining an application for authorisation.
the information required to be submitted under this Act and any information received by it, that the authorisation ought to be granted.
general business by referring to the appropriate groups specified in Part II
the Third Schedule.
this Act, the competent authority may subject an authorisation issued or held under this article to such conditions as it may from time to time deem fit to impose.
receiving a properly completed application form together with the requisite documentation required to be submitted INSURANCE BUSINESS under this Act; and if it refuses to issue the authorisation it shall inform the applicant in writing
the reasons for the refusal.
three months.
the market as a criterion when examining an application for an authorisation.
an authorisation under this article, any previous authorisation
that undertaking under this article shall lapse.
every authorisation issued in terms
this article. 8.
an undertaking which intends to carry on business not restricted to reinsurance, the undertaking’s objects are limited to business
insurance and operations arising directly therefrom, to the exclusion
all other commercial business; (ii) in the case
an undertaking which intends to carry on business restricted to reinsurance, the undertaking’s objects are limited to the business
reinsurance and related operations; this may include a holding company function and activities with respect to financial sector activities within the meaning
Directive 2002/87/EC
the European Parliament and
the Council
16 December 2002 on the supplementary supervision
credit institutions, insurance undertakings and investment firms in a financial conglomerate and amending Council Directives 73/239/EEC, 79/ 267/EEC, 92/49/EEC, 92/96/EEC, 93/6/EEC and 93/22/EEC, and Directives 98/78/EC and 2000/ 12/EC
the European Parliament and
the Council, as amended from time to time; (c) the undertaking has disclosed to the satisfaction
the competent authority such information as the competent authority has requested
it in relation to persons who will, upon the authorisation
the undertaking, have any proprietary, financial or other interest in, or in connection with, that undertaking; (d) the undertaking has disclosed the identities
the shareholders, direct or indirect, whether natural or Authorisation requirements. Amended by: XVII. 2002.242; XII. 2006.81; L.N. 426
those holdings; (e) all qualifying shareholders, directors, controllers and all persons who will effectively direct or manage the business
insurance are fit and proper persons to ensure the sound and prudent management
the undertaking; (f) the undertaking has submitted to the satisfaction
the competent authority a scheme
operations which shall include the particulars or proof as may be determined by Insurance Rules made for the purpose
this article; (g) the undertaking holds eligible basic own funds to cover the absolute floor
the Minimum Capital Requirement in accordance with article 17; (
governance provided for in article 18I.
insurance to other classes or t o exten d an au thorisation covering o nly so me o f t he ri sk s pertaining to one class shall be required to: (a) submit a scheme
operations referred to in subarticle
a third country governing any one or more natural or legal persons with whom the undertaking has close links or difficulties involved in the enforcement
those measures, prevent it from effectively exercising its supervisory functions.
ensuring compliance with the provisions
sub -article
fice in Malta to carry on both long term business and general business.
sub-article
the Third Schedule; or (b) an insurance undertaking authorised solely to carry on general business
insurance for the risks listed in classes 1 and 2
the Third Schedule may be granted authorisation to carry on long term business; or (c) an insurance undertaking authorised solely to carry on general business
insurance may be granted authorisation to carry on long term business restricted to reinsurance.
sub-article
this article shall not apply to an undertaking which holds an authorisation to carry on both long term business and general business under this Act as in force immediately before the coming into force
this Act.
long term business and general business, be managed separately in a manner as may be determined by Insurance Rules made for the purpose
this article.
the Third Schedule shall submit proof to the satisfaction
the competent authority that it: (a) possesses the eligible basic own funds to cover the absolute floor
the Minimum Capital Requirement for undertakings authorised to carry on long term business and the absolute floor
the Minimum Capital Requirement for undertakings authorised to carry on general business, in accordance with article 17; and (b) undertakes to cover the minimum financial obligations as determined in accordance with Insurance Rules, going forward.
the Third Schedule and seeking authorisation to extend its business to long term business shall submit proof to the competent authority that it: Combination
long term business and general business. Amended by: XVII. 2002.243; XII. 2006.82; XXXIII. 2015.11, 77. INSURANCE BUSINESS (a) possesses the eligible basic own funds to cover the absolute floor
the Minimum Capital Requirement for undertakings authorised to carry on long term business and the absolute floor
the Minimum Capital Requirement for undertakings authorised to carry on general business, in accordance with article 17; (b) undertakes to cover the minimum financial obligations as determined in accordance with Insurance Rules, going forward.
doubt, an undertaking whose business is restricted to reinsurance, may be granted an authorisation to carry on both general and long term business in all classes
business. Applicants with head
fice in Malta. Amended by: XVII. 2002.244; XIII. 2004.111; XII. 2006.83; XXXIII. 2015.12. 10.
fice is in Malta, nor shall the competent authority permit such undertaking to hold the authorisation issued thereunder, unless it is satisfied that the undertaking has fulfilled or complied with the requirements
article 8 and, where appropriate,
article 9.
the competent authority given in writing (
the competent authority, no undertaking authorised as aforesaid shall carry on, nor hold itself out as carrying on business
insurance in or from a country outside Malta or open a branch, agency or
fice or set up or acquire any subsidiary in any country outside Malta. Applicants with head
fice outside Malta. Amended by: XVII. 2002.245; XII. 2006.84; XX. 2007.
fice is situated to carry on the business
insurance which forms the object
the application; (
article 12; and (
management
the branch, accounts specific to the business
insurance INSURANCE BUSINESS which it carries on in Malta, and to maintain there all the records relating to the business carried on; (
operations in accordance with article 8
a third country insurance undertaking or third country reinsurance undertaking, the business
insurance shall be carried on under the management
a person fulfilling the following requirements
this sub-article: (a) the person must be an individual resident in Malta or an insurance manager who has been designated by the undertaking for the purpose
this article; (b) the person must not be the approved auditor, or a partner or an employee
the approved auditor,
the undertaking; (c) the person possesses the qualifications and fulfils or complies with the requirements determined by Insurance Rules made for the purpose
this article; and (d) the person is fit and proper to ensure its sound and prudent management.
eligible own funds consisting
the items determined in accordance with Insurance Rules and deposit a specified proportion
such own funds as may be prescribed under article 18G.
third country insurance undertakings shall not simultaneously pursue long term business and general business in Malta. (b) For the avoidance
doubt, a branch
a third country reinsurance undertaking may be granted an authorisation to carry on both general and long term business, in all classes
business, restricted to reinsurance.
this article, "branch" means a permanent presence in Malta
a third country insurance INSURANCE BUSINESS undertaking or third country reinsurance undertaking, which has received authorisation in Malta to carry on business
insurance in Malta.
this article shall be without prejudice to any agreements concluded by the European Community with one or more third countries in terms
the Solvency II Directive. General representatives. Amended by: XIII. 2004.112; XXXIII. 2015.14. 12.
this article: (a) the representative must be a person resident in Malta who has been designated as the undertaking’s representative for the purpose
this article; (b) the representative must be authorised to act generally, and to accept service
any document, on behalf
the undertaking; (c) the representative must not be the approved auditor, or a partner or an employee
the approved auditor,
the undertaking; (d) if the representative is not an individual, it must be a company whose head
fice is in Malta and must itself have an individual representative resident in Malta who is authorised to act generally, and to accept service
any document, on behalf
the company, in its capacity as representative
the company.
sub-article
the undertaking referred to in article
authorised insurance and reinsurance undertakings.. Amended by: XIII. 2004.113; XII. 2006.86; XX. 2007.
INSURANCE Title I: Financial Requirements 14.
an authorised insurance and reinsurance undertaking shall comprise the sum
basic own funds and ancillary own funds.
ancillary own fund items to be taken into account when determining own funds shall be subject to the prior written approval
the competent authority.
own funds into tiers and the eligibility
the own funds, and any other matter relating thereto. INSURANCE BUSINESS 15.
the use
an internal model shall be set out in Insurance Rules. Solvency Capital Requirement. Amended by: XII. 2006.87. Substituted by: XXXIII. 2015.15.
the undertaking concerned deviates significantly from the assumptions underlying the standard formula calculation, the competent authority may, by means
a decision stating the reasons, require the undertaking concerned to use an internal model to calculate the Solvency Capital Requirement, or the relevant risk modules thereof. 16.
non-compliance in the following three months.
non-compliance with the Solvency Capital Requirement, the authorised insurance or reinsurance undertaking shall submit a realistic recovery plan in accordance with Insurance Rules issued under article 18A for approval by the competent authority.
non-compliance with the Solvency Capital Requirement, the re-establishment
the level
eligible own funds covering the Solvency Capital Requirement or the reduction
the risk profile
the undertaking to ensure compliance with the Solvency Capital Requirement.
the opinion that the financial situation
the authorised insurance or reinsurance undertaking concerned will deteriorate further, it may also restrict or prohibit the free disposal
the assets
that undertaking.
the assets
that undertaking, it shall inform the European regulatory authorities
the host Member Non-Compliance with the Solvency Capital Requirement. Amended by: XVII. 2002.246; XIII. 2004.114; XII. 2006.
any measures it has taken. The competent authority may request those authorities concerned to take the same measures, and shall designate the assets to be covered by such measures. Minimum Capital Requirement. Amended by: XVII. 2002.247; XII. 2006.89. Substituted by: XXXIII. 2015.15. 17.
non-compliance in the following three months.
this article, and shall be not less than the amounts (the absolute floor) as determined by the said Insurance Rules.
non-compliance with the Minimum Capital Requirement, the undertaking concerned shall submit, for approval by the competent authority, a short-term realistic finance scheme, in accordance with Insurance Rules issued under article 18A, to restore, within three months
that observation, the eligible basic own funds, at least to the level
the Minimum Capital Requirement or to reduce its risk profile to ensure compliance with the Minimum Capital Requirement.
the assets
the undertaking concerned.
assets
the undertaking concerned, it shall inform the European regulatory authorities
the host Member State or the overseas regulatory authorities,
any measures it has taken. The competent authority may request those authorities concerned to take the same measures, and shall designate the assets to be covered by such measures. Recovery plan and finance scheme. Added by: XXXIII. 2015.
early warning indicators, to identify deteriorating financial conditions and shall immediately notify the competent authority when such deterioration occurs. Powers
the competent authority in deteriorating financial conditions. Added by: XXXIII. 2015.15. 18C.
articles 16 and 18 and without prejudice to any
the measures that may be taken by the competent authority pursuant to article 28, where the solvency position
the authorised insurance or reinsurance undertaking continues to deteriorate, the competent authority shall have the power to take all measures necessary to safeguard the interests
INSURANCE BUSINESS policyholders, in the case
contracts
insurance, or the obligations arising out
contracts
reinsurance.
the deterioration
the solvency position
the undertaking concerned. 18D. Authorised insurance and reinsurance undertakings shall value their assets and liabilities in accordance with Insurance Rules made for the purposes
this Act. Valuation
assets and liabilities. Added by: XXXIII. 2015.15. 18E.
their insurance and reinsurance obligations towards policyholders and insureds
insurance or reinsurance contracts. Technical provisions.
technical provisions shall be determined in accordance with Insurance Rules made for the purposes
this article.
the level
the undertaking’s technical provisions, as well as, the applicability and relevance
the methods applied, and the adequacy
the underlying statistical data used.
technical provisions
an authorised insurance or reinsurance undertaking does not comply with the Insurance Rules made for the purposes
this article, the competent authority may require the insurance or reinsurance undertaking concerned to increase the amount
technical provisions so that they correspond to the level determined by such Insurance Rules.
this article, the competent authority may prohibit the free disposal
its assets after having communicated its intentions to the European regulatory authority
the host Member State or the overseas regulatory authority. The competent authority shall designate the assets to be covered by such measures. 18F.
this article.
the Report on solvency and financial condition. Added by: XXXIII. 2015.15. INSURANCE BUSINESS undertaking concerned would gain significant undue advantage; (b) there are obligations to policyholders or other counterparty relationships binding the undertaking concerned to secrecy or confidentiality.
information is permitted by the competent authority, the authorised insurance or reinsurance undertaking concerned shall make a statement to this effect in its report on solvency and financial condition and shall state the reasons.
or refer to public disclosures made under other legal or regulatory requirements, to the extent that those disclosures are equivalent to the information required to be submitted under sub-article
any major development affecting si gn ifican tl y th e relev ance o f the i nforma tio n di sclo sed in accordance with this article, an authorised insurance or reinsurance undertaking shall disclose appropriate information on the nature a n d e ff e c t s o f t h a t m a j o r d ev el o p m e n t . T h e ci r c u m s t a n c e s considered as major developments and the disclosures to be made by the undertaking in such circumstances shall be determined by Insurance Rules. Custody
assets required to be maintained in Malta. Added by: XXXIII. 2015.15. Amended by: XXVI.2018.65.
such assets shall be deposited with and held in custody for the undertaking’s account by a person as may be prescribed by regulations made for the purposes
this article u nless t hat r equi rem ent is oth erw ise i mp osed by any ot her provision
this Act; and the competent authority shall at all times have the right to demand from such person any information it may require to ensure that the provisions
this article are being complied with.
any kind or amount are to be maintained in Malta shall be satisfied if such assets are maintained in such country outside Malta and in such form and manner to the satisfaction
the competent authority subject to such regulations as may be prescribed for such purpose under this Act. INSURANCE BUSINESS
any kind or amount may be satisfied by the undertaking if the undertaking produces a security in a form and manner to the satisfaction
the competent authority subject to such regulations as may be prescribed for such purpose under this Act.
the competent authority given in writing or until the undertaking has ceased to carry on the business it was authorised to carry on and proves to the satisfaction
the authority that it has no further liability. Such assets shall not be attachable by any court. Title II: Governance Substituted by: XXVI.2018.66. 18H. The Board
Directors
an authorised insurance or reinsurance undertaking shall be ultimately responsible for the compliance by the undertaking concerned with the Act, regulations, Insurance Rules and where applicable, Conduct
Business Rules issued thereunder, including any other obligations pursuant to the Solvency II Directive. 18I.
governance which provides for sound and prudent management
the business
the undertaking. The system
governance requirements shall be laid down in Insurance Rules. Responsibility
the Board
Directors. Added by: XXXIII. 2015.15. Amended by: XXVI.2018.67.
its risk management system, conduct its own risk and solvency assessment; (
its functions or any insurance or reinsurance activities, remain fully responsible for discharging all
its obligations under this Act.
governance shall be proportionate to the nature, scale and complexity
the operations
the authorised insurance or reinsurance undertaking. PART V System
governance. Added by: XXXIII. 2015.15. INSURANCE BUSINESS ACCOUNTS, ACTUARIAL INVESTIGATIONS AND FINANCIAL STATEMENTS Financial year
authorised undertakings. Amended by: XXXIII. 2015.16. 19.
fice is in Malta applying for authorisation under article 7
this Act to carry on business
insurance in or from Malta shall notify in writing the competent authority
its financial year; and, failing such notice, the undertaking’s financial year shall terminate on the thirty-first day
December
each year.
insurance in or from Malta, shall notify in writing the competent authority
its financial year; and where an authorised undertaking as aforesaid alters its financial year it shall forthwith notify in writing the competent authority
such change.
this Act, financial year (a) in relation to an authorised undertaking whose head
fice is in Malta, means an accounting period as is construed in accordance with articles 164 to 166
the Companies Act; (b) in relation to a third country insurance or reinsurance undertaking, means an accounting period as is construed in accordance with the provisions
the laws
the country where the head
fice
the undertaking is situated governing the accounting period
such undertakings. Drawing up and publication
audited financial statement. Amended by: XVII. 2002.248; XII. 2006.90; XX. 2007.129; XXXIII. 2015.17. 20.
its
fices, agencies and branches in Malta and keep so exhibited throughout the following twelve months, a copy
its audited financial statements drawn up (i) in the case
an undertaking whose head
fice is in Malta, in accordance with Insurance Rules made for the purposes
this article; and (ii) in the case
a third country insurance or reinsurance undertaking, in accordance with the provisions
the laws
the country where the head
fice
the undertaking is situated governing the financial statements
such undertakings. (1A) The undertaking shall provide a copy
its audited INSURANCE BUSINESS financial statements to any person applying for such copy: Provided that the undertaking may charge such reasonable fees not exceeding the administrative costs incurred in producing such copy.
an undertaking whose head
fice is in Malta, sub-article
fices, agencies and branches in a country outside Malta in the same manner and to the same extent as it applies to its
fices, agencies and branches in Malta.
the undertaking examined by him and on financial statements prepared by the undertaking.
fice
auditor, the competent authority shall have the power to appoint an auditor for that undertaking and shall fix the remuneration to be paid by that undertaking to such auditor.
Insurance Rules made for the purposes
this article, which may also specify the information to be contained in such statement.
an authorised undertaking shall have the right to demand such information or explanation as he deems necessary in the performance
his duties from any
ficer or employee
, or any person under an appointment from, that undertaking.
a resignation, the auditor shall specify the reasons for so doing.
a resolution intended to be put before the undertaking’s annual general meeting to appoint as an auditor a person other than the retiring auditor or otherwise providing expressly that the retiring auditor shall not be reappointed.
an auditor comes to an end, the authorised undertaking shall, not later than fourteen days from the termination
such appointment, give Appointment, duties and termination
appointment
auditors. Amended by: XII. 2006.91; XXXIII.2015.18,77 XXVI.2018.68. INSURANCE BUSINESS notice in writing to the competent authority stating reasons for such termination.
fice.
serving
such notice reason why its appointment with the undertaking should not be terminated.
this Act, an approved auditor shall be a person who is qualified to be an auditor in accordance with the Companies Act, and holds the authorisation
the competent authority issued to him in accordance with regulations made for the purpose
this article.
a third country insurance or reinsurance undertaking authorised as aforesaid, approve such alternative arrangements as it thinks reasonable and which do not materially detract from the main objects
this article, and where such arrangements have been carried out, the provisions
this article shall not apply to the extent that they are replaced by such arrangements. Appointment
actuary by an undertaking with long term business. Amended by: III. 2009.25; XXXIII. 2015.19.
sub-article
this article are inconsistent with the provisions
the Companies Act, the provisions
this article shall prevail, and the provisions
the said Act shall, to the extent
the inconsistency, not apply to authorised undertakings as aforesaid. 22.
classes I and III as specified in the Second Schedule shall (a) within thirty days
beginning to carry on such business, appoint an approved actuary as actuary to the undertaking to perform the with-profits actuary function in respect
the said classes
its withprofits business, (if any); (b) whenever the appointment comes to an end, within thirty days
such termination, make a new appointment.
such appointment and the name and qualifications
the person appointed; and if an appointment under that sub-article comes to an end, the undertaking shall, within fourteen days, inform the authority in writing stating that INSURANCE BUSINESS fact, the name
the person concerned and the reasons for such termination.
any period specified in sub-article
insurance in terms
the classes specified in subarticle
sub-article
receiving a notice
termination
an appointment
an approved actuary, request in writing the approved actuary concerned to give in writing the reasons for such termination; and the actuary shall, within fourteen days, give reasons in writing.
this Act, an approved actuary is a person who (a) does not hold a role or perform a function on behalf
the undertaking which could give rise to a significant conflict
interest; (b) is a Fellow
an Institute
Actuaries, or a Fellow
a Faculty
Actuaries, or holds actuarial qualifications
similar standing
an institute
repute recognised for such purposes by the competent authority and has the required skill and holds appropriate practical experience to perform his functions as an actuary; and (c) holds the competent authority’s approval to act as actuary to perform the with-profits actuary function as set out in article 23. 23.
classes I and III as specified in the Second Schedule shall, at the close
its financial year, require the approved actuary to provide a report in respect
the period covered by the report affecting those classes
withprofits business
the undertaking.
this article.
the undertaking required to be forwarded under article 20.
the foregoing sub-articles, in the case
a third country insurance undertaking authorised to carry on long term with-profits business in terms
classes I and III as specified in the Second Schedule, the competent authority may approve such alternative arrangements as it thinks reasonable and which do not materially detract from the main objects
this article, and where such arrangements have been carried out, the provisions
this article shall not apply to the extent that they are replaced by such arrangements. Periodic actuarial investigation
an undertaking with long term business. Amended by: XVII. 2002.249; XII. 2006.92; XXXIII. 2015.20. Obligations
auditors and actuaries to the competent authority. Amended by: XVII. 2002.
an authorised insurance or reinsurance undertaking or
a branch in Malta
a third country insurance or reinsurance undertaking shall have the duty to report immediately to the competent authority any fact or decision concerning that undertaking
which he becomes aware
in his capacity as auditor or actuary
any such authorised insurance or reinsurance undertaking or
any such branch which relates to any matter which may be prescribed or is likely to bring about the following: (a) a serious qualification, or refusal,
the auditor’s report on the accounts
the undertaking or the branch; or (b) a grave impairment
the undertaking’s ability to continue as a going concern; or (c) a material breach
the provisions
this Act, regulations or any Insurance Rules which lay down the conditions governing authorisation or which specifically govern the carrying on
business
insurance by an authorised undertaking or branch; or (
which he becomes aware
in the course
carrying out his duties which relate to or have a serious adverse effect upon the insured, the policyholder or any other interested person relating to the undertaking or the branch in Malta
a third country insurance or reinsurance undertaking
which he becomes aware
in his capacity as auditor or actuary to an undertaking having close links with an authorised insurance or reinsurance undertaking.
a third country insurance or reinsurance undertaking. PART VI POWERS
INTERVENTION Automatic revocation
an authorisation. Amended by: XXXIII. 2015.22. 25. An authorisation issued or held under this Act shall automatically be revoked if the authorised insurance or reinsurance undertaking (
a merger with another undertaking carrying on business
insurance or for any other reason whatsoever; or (c) is a third country insurance or reinsurance undertaking, and the overseas regulatory authority in the country
registration, incorporation or constitution withdraws the authorisation from the undertaking. 26. Without prejudice to anything contained in any other provision
this Act, the competent authority may at any time suspend or revoke an authorisation issued or held under this Act if (a) any document or information accompanying an application for authorisation, or any information given in connection therewith, is false, incorrect or misleading in any material particular, or if the authorised insurance or reinsurance undertaking has concealed, or conceals from, or fails to notify to the competent authority any document or information or change therein which it was its duty to reveal or to notify under this Act and any regulations, Insurance Rules or Conduct
Business Rules made thereunder; or (
, or has contravened, any
the provisions
this Act and any regulations made thereunder, or any Insurance Rules or any applicable Conduct
Business Rules, or, or has failed to satisfy or comply with any condition to which it or the authorisation held by it is subject by virtue
or under this Act; or (e) it considers that any
the directors, the controllers and any other person who effectively directs the business the undertaking is authorised to carry on is no longer a fit and proper person to ensure its sound and prudent management; or (
its issue; or (
the competent authority to suspend or revoke an authorisation. Amended by: XVII. 2002.251; XII. 2006.93; XXXIII.2015.23,77 XXVI.2018.69. INSURANCE BUSINESS does not comply with the Minimum Capital Requirement and the competent authority considers that the finance scheme submitted is manifestly inadequate or the undertaking concerned fails to comply with the approved scheme within three months from the observation
non-compliance with the Minimum Capital Requirement; (
those close links or by reason
any law, regulation or administrative provision
a country outside Malta governing that other person, or by reason
difficulty in their enforcement; or (ka) the authorised insurance undertaking fails to comply with the conduct
business requirements in relation to the distribution
an insurance-based investment product or in relation to the distribution
any insurance product other than an insurance-based investment product, set out in Conduct
Business Rules; or (l) Notification
suspension or revocation
an authorisation. Amended by: XXXIII. 2015.24; V.2020.27. any
the circumstances under which the competent authority would have been precluded from issuing an authorisation under this Act, materialises itself or where under this Act it would have been entitled to refuse to issue such authorisation. 27.
this article, where the competent authority intends to suspend or revoke an authorisation pursuant to article 26, it shall give the undertaking concerned notice in writing setting out the reasons for its intention to do so.
not less than forty-eight hours and not longer than thirty days), make representations in writing to the competent authority giving reasons why the authorisation should not be suspended or revoked and the competent authority shall consider any representations so made before arriving at a final decision.
the country
registration, incorporation or constitution, unless the competent INSURANCE BUSINESS authority decides that the matter is urgent or that there are circumstances which make such prior consultation inappropriate.
a suspension or a revocation
an authorisation
an undertaking whose head
fice is in Malta, the competent authority shall: (
any state in which the undertaking or its subsidiaries are carrying on the business
insurance.
any revocation
authorisation in terms
the Act. 28.
the following measures: (
its business; (c) restrict the free disposal
the assets
the authorised insurance undertaking, to safeguard the interests
the insured persons; (d) appoint a person to take charge
the assets
the undertaking, or any portion
them, for the purposes
safeguarding the interests
insureds, policyholders and legitimate creditors
the undertaking; (e) appoint a person to assume control
the business
the undertaking either to carry on that business or to carry out such other function or functions in respect
such business, or part thereof, including to take the necessary action for the undertaking to be dissolved and wound up, as the competent authority may direct; (f) issue an order for the dissolution and winding up
the undertaking or, in the case
a third country insurance or reinsurance undertaking, for the winding up
its business in Malta; (g) appoint a competent person to act as liquidator for the purpose
winding up the affairs
the undertaking; (
such other thing as it may deem appropriate in the circumstances, and having proceeded in any one or more
the manners aforesaid, Power
the competent authority to protect the public interest. Amended by: XVII. 2002.252; XIII. 2004.115; XII. 2006.94; XXXIII. 2015.25; V.2020.43. INSURANCE BUSINESS the competent authority may further proceed in any one or more
such manners, whether in addition thereto or in substitution therefor.
the undertaking to act in accordance with the advice given by such person unless and until the competent authority, on representation made to it, directs otherwise; (b) under sub-article
which he is placed in charge, and all the powers, functions and duties
the undertaking in respect
those assets, whether exercisable by the undertaking in general meetings, or by the directors, or by any other person, including the legal and judicial representation
the undertaking, shall be exercisable by and vest in the person appointed under the said paragraph to the exclusion
any other person; (c) under sub-article
such person and shall provide him with such facilities as he may require the undertaking to provide him to carry on that business or to carry out the functions assigned to him under the said paragraph; and all the powers, functions and duties
the undertaking, whether exercisable by the undertaking in general meeting, or by the directors, or by any other person, including for the purposes
the dissolution and winding up
the undertaking as well as the legal and judicial representation
the undertaking in all matters, shall be exercisable by and vest in him to the exclusion
any other person; (d) under sub-article
the undertaking for all purposes
law to the exclusion
any other person: Provided that the competent person shall not take any decision for the purpose
the dissolution and winding up
the undertaking, unless the competent authority issues a directive to that effect in terms
article 31A
the Act, and any such directive may contain such instructions, requirements and conditions as the competent authority may consider necessary, including with regard to the mode
winding up. (2A) Without prejudice to the powers
the competent authority in terms
sub-article
an undertaking, where it appears to the com petent authority that an undertaking should be dissolved and wound up by the court for the reason set out in article 214
the Companies Act, and where the court accedes to the application, the relevant provisions
the Companies Act in relation to the INSURANCE BUSINESS dissolution and winding up by the court and any other applicable provisions
any other law shall apply.
a third country insurance or reinsurance undertaking, the branches and
fices in Malta
that undertaking shall, if the competent authority so directs and to the extent it so directs, be deemed to constitute a separate undertaking.
article 16
the Malta Financial Services Authority Act shall apply mutatis mutandis to any administrative or disciplinary sanction or measure,
whatever type, including reprimands or warnings, imposed or decided by the competent authority under this Act, and any regulations made thereunder or any Insurance Rules.
, and incidental to, the publication or issue
public statements or notices pursuant to this article or such part thereof as it may deem appropriate; and any sum so due shall be recoverable by the competent authority in the same manner as an administrative penalty imposed under this Act.
sub-article
AUTHORISED INSURANCE AND REINSURANCE UNDERTAKINGS Substituted by: XXIII. 2015.26. 29.
this Act which requires an authorised insurance or reinsurance undertaking to furnish to the competent authority any information or documentation, the competent authority may, by notice in writing,require any such undertaking or any person who is or was carrying out business
insurance, or who appears to be or have been carrying on business
insurance, or who appears to be in possession
any relevant information and, or documentation to do all or any
the following: Power
the competent authority to require information. Amended by: XVII. 2002.253; XXIII. 2015.27; XXVI.2018.70. (
any documents furnished or provided under this article or extracts from them.
its knowledge, that information or documentation is, and the competent authority may require any person, including a person to which the undertaking has outsourced any activities or functions, whether indicated as aforesaid or not, who appears to it to be in possession
that information or documen-tation, to provide it.
any requirement under this article may be used in evidence against the person making the statement or providing the documentation as well as against any person to whom they relate.
this article shall not apply to information or documentation which is privileged in accordance with the provisions
article 642
the Criminal Code.
documentation under the provisions
this article shall be without prejudice to any lien or charge claimed by any person in relation to such documentation. Power
the competent authority to examine the affairs
authorised undertakings and service providers. Amended by: XII. 2006.95; XXXIII. 2015.28; XXVI. 2018.71.
carrying out his functions under his appointment, have all the powers conferred on the competent authority by this article and a requirement made by him shall be deemed to be and have the same force and effect as a requirement
the competent authority.
this article, an authorised insurance or reinsurance undertaking may be required by the competent authority to submit to the Central Bank
Malta such information as the Bank may reasonably require for the discharge
its duties under the Central Bank
Malta Act. 30.
the Companies Act relating to the investigation
undertakings, the competent authority may, whenever it deems it necessary or expedient, appoint one or more inspectors to investigate and report on the affairs
an authorised insurance or reinsurance undertaking and to report thereon to it.
the competent authority; (b) may, and if so directed by the competent authority shall, make interim reports and on the conclusion
his examination shall make a final report to the said authority. INSURANCE BUSINESS
any report, or any part thereof, made by an inspector in respect
its affairs.
an authorised insurance or reinsurance undertaking are under examination, it shall be the duty
all
ficers and agents
the undertaking to produce to an inspector all books and documents
or relating to the undertaking and otherwise to give to an inspector all assistance in connection with the examination which they are reasonably able to give; and if an
ficer or an agent
the undertaking refuses to produce any books or documents which it is his duty under this article to produce, or refuses to answer any question which is put to him by an inspector with respect to the affairs
the undertaking, an inspector shall refer the matter to the competent authority and the competent authority shall thereupon enquire into the case and take appropriate action as it deems necessary.
the competent authority.
the service provider and must be able to exercise those rights
access. (b) Where the service provider is located in a Member State or EEA State, other than Malta, the competent authority shall inform the appropriate authority
the Member State or EEA State
the service provider prior to conducting an on-site inspection at the premises
the service provider. In the case
a nonsupervised entity, the appropriate authority shall be the European regulatory authority concerned. The competent authority may delegate such on-site inspections to the European regulatory authority
the Member State or EEA State where the service provider is located.
Regulation (EU) No 1094/2010.
, and incidental to, an examination pursuant to this article or such part thereof as it may deem appropriate, shall be paid by the undertaking concerned; and any sum so due shall be recoverable by the competent authority in the same manner as an administrative penalty imposed under this Act.
ficers or to agents shall include a reference to former as well as present
ficers or agents and the expression "agents", in relation to an authorised insurance or reinsurance undertaking, shall include persons registered or enrolled under the Insurance Distribution Act, or registered with an authority or body in the Member State or EEA State responsible for the supervision
intermediaries and ancillary insurance intermediaries acting for the undertaking, the bankers, the auditors and, in the case
an undertaking authorised to carry on long term business, the actuary
the undertaking and a person as may be prescribed by regulations made for the purposes
article 18G.
such undertakings.
sub-article
entry to obtain information and documents. Amended by: XXXIII. 2015.29; V.2020.44. 31.
the Companies Act, relating to the entry and search
premises, any
ficer, employee or agent
the competent authority, on producing, if required, evidence
his authority, may enter premises occupied by a person on whom a notice has been served under article 29 or whose affairs are being investigated under article 30, for the purpose
obtaining there the information or documents required by that notice, or otherwise for the purpose
the examination, and
exercising any
the powers conferred by the said articles.
ficer, employee or agent
the competent authority has reasonable cause to believe that if such notice as is referred to in sub-article
his authority, enter any premises referred to in sub-article
obtaining there any information or documents specified in the notice, being information or documents that could have been required under such notice as is referred to in sub-article
any action taken under the provisions
this article, the competent authority may request the assistance
the Commissioner
Police, who may for such purpose exercise such powers as are vested in him for the prevention
fences and the enforcement
law and order: Provided that, where an entry as is mentioned in this article INSURANCE BUSINESS involves premises that are occupied for the purpose
habitation, such entry shall be carried out in the presence
an
ficer
the Police
a rank not below that
inspector and shall moreover not take place between nine in the evening and five in the morning. 31A.
the powers conferred to it under this Act, the competent authority may, whenever it deems it necessary, give, by notice in writing, such directives as it may deem appropriate in the circumstances, and any person to whom or to which the notice is given shall obey, comply with and otherwise give effect to any such directive within the time and in the manner stated in the directive or any further directive: Power to issue directives. Added by: XII. 2006.96. Amended by: XXXIII. 2015.30; V.2020.45. Provided that the competent authority may give any such directive even where an undertaking, for whatever reason, ceases to hold an authorisation granted in terms
this Act: Provided further that any directive given in terms
this article shall, unless the competent authority otherwise directs, continue to apply even when an undertaking, for whatever reason, ceases to hold an authorisation granted in terms
this Act.
the foregoing provisions
this article, a directive under this article may – (
ficer
an undertaking having functions in relation to the holder
an authorisation be prohibited, temporarily or otherwise, suspended from carrying out activities licensable under the Act, or removed, or removed and replaced, by another person acceptable to the competent authority.
the provisions
this article. 31B.
the qualitative requirements relating to the system
governance, the assessment
the risks which the undertakings concerned face or may face and the assessment
the ability
those undertakings to assess those risks taking into account the environment in which the undertakings are operating. Supervisory review process. Added by: XXXIII. 2015.31. INSURANCE BUSINESS
governance, including the own-risk and solvency assessment, as set out in article 18I; (
this Act; (e) the quality and quantity
own funds as determined by Insurance Rules issued pursuant to article 14; and (f) where the authorised insurance or reinsurance undertaking uses a full or partial internal model, ongoing compliance with the requirements for full and partial internal models set out in Insurance Rules issued pursuant to article 15.
the methods and practices
the authorised insurance or reinsurance undertakings designed to identify possible events or future changes in economic conditions that could have adverse effects on the overall financial standing
the undertaking concerned.
the authorised undertakings to withstand those possible events or future changes in economic conditions.
the supervisory review process, it shall request the insurance or reinsurance undertaking concerned to remedy such weakness or deficiency within such period and in such manner as it may deem necessary or appropriate in the circumstances.
those reviews, evaluations and assessments having regard to the nature, scale and complexity
the activities
the insurance or reinsurance undertaking concerned.
events or future changes in economic conditions that could have unfavourable effects on the overall financial standing
authorised insurance or reinsurance undertakings, in addition to the calculation
the Solvency Capital Requirement, the competent authority may require undertakings to carry out such tests as may be determined to assess the ability
the undertakings concerned to withstand such events or future changes in economic conditions that could have unfavourable effects on their overall financial stability. Power to set a capital add-on. Added by: XXXIII. 2015.31. 31C.
article 31B, the competent authority may, in exceptional circumstances, set a capital add-on for an authorised insurance or INSURANCE BUSINESS reinsurance undertaking stating the reasons for its decision. Such power shall be exercised in the following cases: (a) where it concludes that the risk profile
the authorised insurance or reinsurance undertaking deviates significantly from the assumptions underlying the Solvency Capital Requirement, as calculated using the standard formula in accordance with article 15; and (i) the requirement to use an internal model under article 15
the authorised insurance or reinsurance undertaking deviates significantly from the assumptions underlying the Solvency Capital Requirement, as calculated using an internal model or partial internal model because certain quantifiable risks are captured insufficiently and the adaptation
the model to better reflect the given risk profile has failed within an appropriate timeframe; (c) where it concludes that the system
governance
an authorised insurance or reinsurance undertaking deviates significantly from the standards laid down in article 18I and Insurance Rules issued thereunder, that those deviations prevent the undertaking from being able to properly identify, measure, monitor, manage and report the risks that it is or could be exposed to and the application
other measures is in itself unlikely to improve the deficiencies sufficiently within an appropriate timeframe; (d) the authorised insurance or reinsurance undertaking applies the matching adjustment or the volatility adjustment referred to in Articles 77b and 77d
the Solvency II Directive, respectively, or the transitional measures referred to in Articles 308c and 308d
the said Directive and the competent authority concludes that the risk profile
that undertaking deviates significantly from the assumptions underlying those adjustments and transitional measures; or (e) in any
those circumstances as may be additionally specified by the Solvency II Directive.
sub-article
the Solvency II Directive; (b) in paragraph (c)
sub-article
the INSURANCE BUSINESS competent authority to set the add-on; and (c) in paragraph (d)
sub-article
sub-article
the capital add-on without delay.
such capital add-on when the undertaking has remedied the deficiencies which led to its imposition.
the calculation
the risk margin referred to in Article 77
the Solvency II Directive. Information to be provided for supervisory purposes. Amended by: XII. 2006.
supervision, taking into account the o b j e c t i v e s o f su p e r v i si o n , as may be specified by means
regulations, Insurance Rules or Conduct
Business Rules which shall also specify the period within which this information is to be submitted. Added by: XXXIII. 2015.
the group,
insurance and reinsurance undertakings which are part
a group in accordance with regulations or Insurance Rules issued for the purposes
this Part. Group supervisor. Added by: XXXIII. 2015.33. 32B.
insurance and reinsurance undertakings which are part
a group, shall be responsible for coordination and the exercise
group supervision.
this Part, "group supervisor" means the supervisory authority responsible for group supervision, determined in accordance with Article 247
the Solvency II Directive.
the gathering and dissemination
relevant or essential information for going concern and emergency situations, including the dissemination
information which is
importance for the carrying INSURANCE BUSINESS out
the supervisory tasks
authorities responsible for the supervision
an individual insurance or reinsurance undertaking in the group; (b) supervisory review and assessment
the financial situation
the group; (c) assessment
compliance
the group with the rules on solvency and
risk concentration and intra-group transactions as set out in Articles 218 to 245
the Solvency II Directive; (d) assessment
the system
governance
the group, as set out in Article 246
the Solvency II Directive, and
whether the board
directors
the participating undertaking fulfils the requirements
fitness and properness set out in Articles 42 and 257
the Solvency II Directive; (e) planning and coordination, through regular meetings held at least annually or through other appropriate means,
supervisory activities in going-concern as well as in emergency situations, in cooperation with the authorities responsible for the supervision
an individual insurance or reinsurance undertaking in a group, and taking into account the nature, scale and complexity
the risks inherent in the business
all undertakings that are part
the group; (f) other tasks, measures and decisions assigned to the competent authority, as group supervisor, by the Solvency II Directive or deriving from the application
that Directive, in particular leading the process for validation
any internal model at group level as set out in Articles 231 and 233
Solvency II Directive and leading the process for permitting the application
the regime established in Articles 237 to 240
the said Directive.
group supervision tasks, set out in sub-article
supervisors shall be established. It shall be chaired by the competent authority where it i s t h e g r o u p s u p e r v i s o r. T h e m e m b e r s h i p , f u n c t i o n i n g a n d consultation processes
the college
supervisors shall be determined by regulations or Insurance Rules. 32C.
individual insurance or reinsurance undertakings in a group, in particular, in cases where an insurance or reinsurance undertaking within the group encounters financial difficulties.
the authorities responsible for the supervision
an individual insurance or reinsurance undertaking in a group, it shall cooperate closely with other responsible authorities in the group and the group supervisor, i n p a r t i c u l a r, i n c a s e s w h e r e a n i n s u r a n c e o r r e i n s u r a n c e Co-operation and exchange
information with respect to group supervision. INSURANCE BUSINESS undertaking encounters financial difficulties.
the authorities responsible for the supervision
an individual insurance or reinsurance undertaking in a group, it shall (a) provide other authorities responsible for the supervision
an individual insurance or reinsurance undertaking in a group with such information so as to allow and facilitate the exercise
the supervisory tasks concerned under the Solvency II Directive; (
all the authorities involved in the supervision
the group, at least where (i) it becomes aware
a significant breach
the Solvency Capital Requirement or a breach
the Minimum Capital Requirement
an individual insurance or reinsurance undertaking; (ii) it becomes aware
a significant breach
the Solvency Capital Requirement at group level calculated on the basis
consolidated data or the aggregated group Solvency Capital Requirement, in accordance with whichever calculation method is used, in Title III, Chapter II, Section I, Subsection 4
the Solvency II Directive; or (iii) other exceptional circum-stances are occurring or have occurred.
the authorities responsible for the supervision
an individual insurance or reinsurance undertaking in a group has not communicated relevant information, or a request for cooperation, in particular to exchange relevant information, has been rejected or has not been acted upon within two weeks, the competent authority may refer the matter to EIOPA.
the Solvency II Directive, or where the members
the college
supervisors do not cooperate to the extent required by that sub-article, the competent authority may refer the matter to EIOPA and request its assistance in accordance with Article 19
Regulation (EU) No 1094/2010.
an individual insurance or reinsurance undertaking in a group and EIOPA with information regarding the group in accordance with Article 19, Article 51
the Solvency II Directive, in particular regarding the legal structure and the governance and organisational structure
the group. INSURANCE BUSINESS
the Solvency II Directive, the competent authority shall, where a decision is
importance for the supervisory tasks
the other authorities responsible for the supervision
an individual insurance or reinsurance undertaking in a group, prior to taking any decision, consult the said authorities in the college
supervisors with regard to the following: (a) changes in the shareholding structure, organisational or management structure
an authorised insurance and reinsurance undertaking which is part
a group and which requires the approval or authorisation
the competent authority; (b) the decision on the extension
the recovery period in accordance with Article 138
the Solvency II Directive; (c) major sanctions or exceptional measures taken by the competent authority, including the imposition
a capital add-on to the Solvency Capital Requirement under article 31C and the imposition
any limit
AI explanation based on the official legal text. Indicative, not a substitute for legal advice.