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The Insurance Distribution Directive (“IDD”) is aimed not only at insurance agents, brokers and managers, but also at insurance undertakings which, likewise, distribute insurance products, thereby establishing a level playing field between all insurance distributors. CSB Group is equipped with the necessary expertise, knowledge and experience to assist an interested undertaking to apply for authorisation and be licensed by the MFSA.
Under Malta Law the business of insurance is governed by the Insurance Business Act, Chapter 403 of the Laws of Malta (the “Act”). Moreover the Malta Financial Services Authority (the “MFSA”) is the supervisory authority entrusted to carry out the functions assigned to it by or under Act and any regulations, Insurance Rules or Conduct of Business Rules made thereunder and to ensure that insurance and reinsurance undertakings carrying on the business of insurance in or from Malta comply with the provisions of Act and of any regulations made thereunder, with any Insurance Rules and Conduct of Business Rules made and directives.
As stated under the Act no person shall carry on, nor hold itself out as carrying on, in or from Malta business of insurance unless authorised by the MFSA. In this respect, the MFSA shall not issue an authorisation unless it is satisfied that, amongst other conditions an application for authorisation is made in writing by an undertaking in such form and manner as the MFSA may from time to time determine.
CSB Group is equipped with the necessary expertise, knowledge and experience to assist an interested undertaking to apply for the above-mentioned authorisation and obtain an insurance licence from the MFSA.
Our Insurance Licensing Services Include:
1. Assistance in the completion of the necessary licensing application for an insurance business under the auspice of the MFSA;
2. Advisory throughout the whole application process;
3. Assistance with the completion of the Personal Questionnaires; Competency Forms and Assessment Forms;
4. Guidance and advisory with respect to the conditions for carrying on Business of Insurance;
5. On-going liaison with the MFSA;
6. Drafting and/or review of the necessary business plan, financial projections and required policies.
The Insurance Distribution Directive in Malta
By way of background, the Insurance Distribution Directive (“IDD”) is aimed not only at insurance agents, brokers and managers, but also at insurance undertakings which, likewise, distribute insurance products, thereby establishing a level playing field between all insurance distributors.
The IDD’s main scope was not to introduce additional solvency and capital requirements, but rather to lay down rules regarding product governance and oversight, conflicts of interest, knowledge and ability and to introduce suitability and appropriateness assessments, similar to those found under MiFID (2014/65/EU).
The IDD was transposed into Malta on the 10th of July 2018 and consequently the ‘Insurance Intermediaries Act’ was renamed to ‘Insurance Distribution Act’, Chapter 487 of the Laws of Malta (the “IDA”).
The key requirements which were introduced by the IDD are as follows:
- Product Oversight and Governance: the IDD now requires insurance distributors, insurance undertakings and insurance intermediaries, to establish and maintain a Product Governance and Oversight Policy, by means of which they will govern any arrangements and procedures relating to the insurance products they intend to distribute.
- Conflicts of Interest, including Inducements and Remuneration: The IDD requires insurance distributors not only to disclose any conflicts of interest, but to also seek to identify, prevent and manage them in so far as this is possible.
- Suitability and Appropriateness Assessments: One of the more onerous obligations introduced by the IDD relates to the carrying out of assessments of demands and needs, suitability assessments and appropriateness assessments, as the case may be.
- Product information and Disclosures: Client protection is undoubtedly one of the main objectives behind the IDD. In this respect, the directive introduces a number of obligations intended mostly to equip clients with better information, knowledge and understanding of the insurance products they’re buying, and certain disclosures which must be made by insurance distributers before, during and after a sale is concluded.
At CSB Group we understand that the above may seem to be onerous and time consuming, however, we may assist Insurance Agents, Managers with a Malta licence application. We may also assist in obtaining a license for Insurance Brokers. Our insurance licensing experts will support you through every step of the way, including but not limited to:
- Advisory with respect to Insurance Agents, Managers and Brokers;
- Assistance in the application for registration of individuals in relevant registers;
- Assistance in the registration of persons carrying out tied intermediaries activities;
- Assistance in the registration of persons carrying out ancillary intermediaries activities with an enrolled insurance broker;
- Assistance in the application for persons to be entered in the Tied Insurance Intermediaries List
- Assistance in the application for persons to be entered in the Ancillary Insurance Intermediaries List;
- On-going liaison with the MFSA;
- Drafting and/or review of the necessary business plan, financial projections and required policies.
The choice of CSB Group was naturally imposed when I decided to establish my private collective investment scheme in Malta. In addition to a strong overseas reputation, it is one of the three largest and probably the most serious Maltese business advisory firms. The whole Regulated Industries and Corporate Services Team is very meticulous, attentive, and all of them would be happy to bend over backwards to advance your projects. This firm and its team are the ambassadors of one of the best onshore jurisdictions in the world.
Magellan SICAV p.l.c.
CSB Group consistently provide quality support across corporate, financial and legal support service requirements, delivering value at all levels. An effective and efficient team, always approachable, and go about their business in a professional manner, where the customer is considered paramount.
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