Malta an EU Insurance Hub

The Solution for Business Insurance in the EU

Mr. Steve Muscat Azzopardi | 05 Sep 2019

Malta  an EU Insurance Hub

A small island nation with British heritage, Malta has managed to attract some of the biggest names in insurance to its shores. Several more have a licence application pending and many of these are UK-based insurance principals and brokers, seeking to protect their EU-driven revenue in a post-Brexit reality. Amidst this political uncertainty, Malta as a EU Member State provides various options for those UK companies seeking to relocate. 

The Malta Advantages for Insurance Businesses

As a jurisdiction, Malta presents a compelling offer with strong legislative and regulatory frameworks. The Malta Financial Services Authority (MFSA) Malta’s sole regulator for Financial Services is a firm, prudential regulator yet is approachable and forward-looking. 

Apart from transposing all EU Directives into its national laws, Malta permits unique structures in Europe such as Protected Cell Companies (PCC) and Incorporated Cell Companies (ICC), providing various options for different insurance structures.

What do Malta Insurance Businesses provide to the EU Companies? 

A licence from the MFSA gives companies the ability to passport business into other EU member states. This is of particular advantage for insurance brokers or carriers who sell into the EU/EEA, or organisations wishing to establish a captive insurance business in Malta and whose core business

remains in another EU/EEA jurisdiction. Meanwhile, Malta’s strategic geographic location allows companies easy access to Europe with daily flights to major European cities as well as to cities in North Africa and the Middle East.

Malta offers the possibility of using either a managed or non-managed setup allowing for greater flexibility when setting up local operations. Subject to operations, management and governance being conducted from Malta, this allows the possibility to obtain a licence with a minimal local footprint,

then upscale local presence as the business develops and justifies increased investment and commitment to the jurisdiction.

Insurance businesses will find that Malta boasts a skilled, local and international workforce and an adequate pool of professional services entities, while the nation’s cost base is low compared to other popular EU jurisdictions.

The MFSA allows for different classes of insurance and reinsurance business to be underwritten by regulated undertakings covering both long-term and general business.

A British Legacy

Malta was part of the British Empire for over 150 years; after assisting the Maltese to expel the French, the British found themselves sovereign of the Islands. Malta remained a Crown colony until 1964 when the Republic of Malta was granted independence and became a Commonwealth member. 

The legacy of this period is present till today and business, laws and education have British influence. English is a joint official language with Maltese and is spoken fluently and widely.

British operators setting up in Malta are reassured by learning that Malta Company’s Act is based on that of the UK and accounting is guided by IFRS principles.

Protected Cell Companies - Malta Insurance Businesses

Malta is the only EU Member State which has in place a well-established legal regime regulating Protected Cell Companies (PCCs). Introduced in 2004, these regulations enable insurers to carry on the business of insurance including insurance manager, insurance broking under the Insurance

Intermediaries Act, reinsurance and captive insurance through the Protected Cell Company (PCC) structure as an alternative to the traditional set up of insurers, reinsurers or captives.

The PCC is a legal structure which allows for the creation of protected cells within itself for the purposes of segregating and protecting the cellular assets of the company. Assets and liabilities of each cell are kept separate from all other cells and the non-cellular assets of the PCC. Each cell is ring-

fenced thus offering superior protection as creditors may only have recourse to the cellular assets attributable to the cell or cells they have transacted with. Each cell pays ‘cellular dividends’ on each cell’s class of shares with reference only to the cellular assets and liabilities attributable to that cell, thus protecting Investor returns.

The PCC together with any protected cells which have been created constitute a single legal person. Each protected cell which is created has its own distinct name or designation however, it does not constitute a legal person which is separate from the Protected Cell Company. It is important to note that every cell is required to obtain its own licence from the MFSA to carry out any type of insurance activity.

ICC - New Type of Corporate Vehicle in Insurance Business

Following the success of the PCC as a structure, in 2010 the Incorporated Cell Company (ICC) was introduced as a new type of corporate vehicle in thenew of insurance business.

Similar to PCCs, Malta ICCs may be used to create cells for the purposes of the segregation of the cellular assets and liabilities, however a key difference is that incorporated cells and protected cells have different statuses at law. Namely, whereas a protected cell does not have a separate legal

personality and each cell transacts through the PCC, in the case of an ICC each incorporated cell has its own separate legal personality which is distinct from that of other incorporated cells and that of the Malta ICC. The status of an incorporated cell is that of a limited liability company, thus being

able to transact and enter into contractual relationships with third parties in its own right.

Webinar on Malta for Insurance 

Malta has established itself as a jurisdiction of choice for insurance companies wishing to relocate to a jurisdiction with a strong legislative and regulatory framework. As UK based companies seek Brexit strategies in order to safeguard their position in the market, Chetcuti Cauchi Advocates have organised webinars dedicated to insurance. To view the webinar recording, visit: Upholding Insurance Standards outside of the UK or contact Steve Muscat Azzopardi at +356 22056438 or email:

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