Insurance and Re-insurance Licence
Over the years, Malta’s reputation for innovative financial services has gained steady momentum, so much so that a number of insurance companies wanting to self-insure or reinsure through Captives or cells of Protected Cell Companies (PCC) or Incorporated Cell Companies (ICC) are choosing Malta as their strategic insurance domicile. CSB Group provides clients with solutions to licencing Captive & Retail Insurance business as well as the management of Malta Insurance License applications.
Insurance Licence – Why Malta?
The main features attracting such companies to Malta are:
- Malta is an established Finance Centre;
- Effective Regulation in force and an accessible Regulator (the Malta Financial Services Authority);
- Applicable EU and EEA passporting rights;
- Various insurance structures to opt for;
- OECD and EU approved tax-efficient environment (almost 70 Double Taxation Agreements);
- Highly-skilled professional workforce;
- Cost-effective structure.
Regulation of the Insurance Sector in Malta
In Malta, the insurance sector is regulated by two distinct, yet complimentary laws:
- Insurance Business Act Cap. 403, providing for the authorisation and supervision of insurance companies by MFSA; and
- Insurance Intermediaries Act Cap. 487, governing insurance agents, brokers and managers as well we tied insurance intermediaries.
Insurance Company Incorporation
CSB Group assists clients by assessing and maximising the benefits available to clients’ company profiles, and providing all the necessary support and assistance in the incorporation and formation of:
- Insurance and Reinsurance Companies;
- Captive (Affiliated) Insurance Companies;
- Protected Cell Companies;
- Incorporated Cell Companies;
- Insurance Intermediaries;
- Securitisation Vehicles.
CSB Group’s insurance Lawyers, Accountants and Consultants also work in tandem with specialists from other local and international leading practices in the sector. This methodology provides clients with a substantial number of benefits through the provision of seamless services, including:
- Company restructuring;
- M&A and corporate re-organisation;
- Tax advisory;
- Run-off solutions;
- Insurance licencing and insurance company incorporation;
- Regulatory and compliance;
- Administration and management outsourcing
Captive Insurance Business In Malta
Malta Captive insurance business is regulated under a set of tailor made rules providing for the registration and operation of captive insurance companies which, in terms of the applicable Maltese insurance legislation are termed “Affiliated Insurance Companies” (“AICs”).
CSB is an ideal partner in Malta – trustful, reactive, comfortable to work with on customised solutions.
“Affiliated Insurance” is defined in the Insurance Business (Companies Carrying on Business of Affiliated Insurance) Regulations as “the business of a company authorised in terms of the Insurance Business Act, whose registered office is in Malta and which carries on business of insurance restricted to risks originating with shareholders or connected undertakings or entities and includes business carried on by an affiliated reinsurance company”.
Accordingly, Affiliated Insurance Companies may insure risks originating from a variety of persons including, inter alia:
- parent companies;
- associated or group companies;
- individuals or other entities having a majority ownership or controlling interest in the relative Affiliated Insurance Company; and
- members of trade, industry or profession associations insuring risks related to such trade, industry or profession.
Affiliated Insurance Companies licensed in Malta are regulated entities and, as such, are required to maintain, at all times, a margin of solvency in accordance with the relevant regulations which are modelled on European Union Directives and are also required to establish and maintain adequate technical provisions.
The following requirements of Insurance Companies licensed in Malta do not apply to AICs:
- The custody of assets rules provided for in the Insurance Business (Insurer’s Assets and Liabilities) Regulations, 2007;
- The requirement to contribute to the Protection and Compensation Fund;
- A number of obligations in the case it intends to cease to carry on business of insurance;
- The payment of duty under the Duty on Documents and Transfers Act, 1993 on any contract of insurance relating to a risk situated outside Malta.
In terms of the Insurance Business (Continuance of Companies Carrying on Business of Insurance) Regulations, 2003, a body corporate duly licensed in an approved jurisdiction to carry out insurance business or to provide insurance management or broking services may be authorised to re-domicile to Malta and operate under Maltese insurance legislation.
Similarly, the MFSA may authorise a Maltese registered and licensed company to be continued as a body corporate registered, incorporated or constituted under the laws of a country outside Malta.
The relevant provisions of the Companies Act and the Continuation of Companies Regulations, 2002 also apply mutatis mutandis with respect to the continuation of AICs.
Main Subsidiary Legislation in this area includes:
- the Insurance Business (Companies Carrying on Business of Affiliated Insurance) Regulations, 2003;
- the Companies Act (Cell Companies Carrying on Business of Insurance) Regulations, 2003;
- the Insurance Business (Continuance of Companies Carrying on Business of Insurance) Regulations, 2003;
- Insurance Rule 21 of 2007 on the business of affiliated insurance.