The Malta Insurance Industry
Malta's regulatory environment, its EU membership, its English speaking and professional human resources and its favourable tax regime amongst other factors have prompted several insurance companies to conduct insurance business in Malta and utilize it as a base to write insurance into Europe. The insurance sector is consistently growing both in number of companies and volume of business. The Maltese insurance sector has evolved from a handful of domestic insurance companies into an industry which operates across all the EU Member States. The Insurance sector comprises commercial insurance companies carrying out both general and long-term business, subsidiaries of major international insurance and reinsurance undertakings, Affiliated Insurance Companies (Captives) and Insurance Management Companies.
Malta and EU Insurance Legislation
Maltese insurance legislation incorporates the standards set by European Union Insurance Directives, including amongst others the Insurance Mediation Directive and the Reinsurance Directive.
Malta insurance business, which is governed by the Insurance Business Act and the Insurance Intermediaries Act respectively, may only be carried on in or from Malta subject to the obtainment of a licence from the competent authority regulating and supervising the insurance industry, namely the Malta Financial Services Authority (MFSA) which is also the single regulator for banking, investment services, trust services, pensions and the financial markets. The MFSA is in compliance with the high standards expected by the International Association of Insurance Supervisors (IAIS). The MFSA has signed a Multilateral Memorandum of Understanding (MMoU) on co-operation and information exchange with the IAIS after a lengthy application process which involved a thorough screening and scrutiny of Malta's legislative and regulatory framework. Membership of the IAIS and accession to the MMoU has strengthened the MFSA's position in the international network of supervisory agencies in the insurance sector.
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The Maltese legal regime has introduced innovative and flexible legal structures in the field of insurance such as Protected Cell Companies (PCCs) Incorporated Cell Companies (ICCs) which allow inter alia for the benefit of the segregation of assets and liabilities and which may be utilized to in the captive insurance market. The legal and regulatory framework underpinning captives which are termed as "Affiliated Insurance Companies" ("AICs") under Maltese rules provides a number of concessions which are not otherwise applicable to insurance companies to cater for their specific needs. The Continuation of Companies legislation also enable captives to re-domicile to and from Malta at the least possible cost.
Passporting Rights
Malta's E.U. membership allows insurance companies licensed in Malta to access the EU's Single Market by writing directly into other EU/EEA markets without the need to apply for additional licences in the host Member States. Passporting rights may be exercised provided the insurance company is licensed and the host country regulator is notified by the home country regulator through a harmonized and streamlined notification procedure.
Malta Lawyers: Set up and Pre-Licensing
At the pre-licensing stage, our firm provides assistance to co-ordinate meetings with the MFSA in order to discuss the proposed insurance business and assists in the drafting and completion of the documentation required for licensing purposes such as the scheme of operations and the completion of the other various official documents required.
Chetcuti Cauchi's lawyers can also provide specialized assistance in order to choose the most appropriate and tax-efficient legal structure in accordance to the envisaged nature, scope and extent of the proposed activity.
Malta Legal Assistance: Post-Licensing and Compliance
Upon the obtainment of the licence, licence holders are required to regularly monitor their compliance with the various post-licensing requirements established by the relevant EU directives which are transposed into Maltese law. Our team provides a comprehensive compliance advisory service which ensures that all compliance matters are attended to.
Our Malta Insurance Practice
Chetcuti Cauchi offers legal advisory services relative to insurers, reinsurers, insurance agents, insurance brokers, insurance managers and tied insurance intermediaries which are or seek to be authorised or enrolled under the relevant Maltese law.
Chetcuti Cauchi's Insurance Practice Group provides both pre-licensing and post-licensing services within the licence project management sphere thus providing a comprehensive service to prospective insurer providers desirous to obtain a Malta licence.
The legal advisory services are also provided in relation to captive insurance, the exercise of EU passporting rights, the redomiciliation of insurance companies and the various legal structures that Malta offers in the field of insurance such as Protected Cell Companies (PCCs) and Incorporated Cell Companies (ICCs); legal assistance is also given in the setting up of or conversion into such legal entities.
Chetcuti Cauchi is a one-stop shop financial services solution provider providing an array of services ranging from licensing and compliance to corporate and personal tax and project management to Maltese and foreign clients who choose Malta as their centre, HQ or branch of their insurance activity.