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Maltese Laws |
INSURANCE BUSINESS ACT
To regulate the business of insurance.
1st October, 1998
ACT XVII of 1998, as amended by Acts XVII of 2002, XIII of 2004, XII of 2006 and XX of
2007; Legal Notice 426 of 2007; and Acts III and XVII of 2009, XIX of 2010 and X of 2011.
ARRANGEMENT OF ACT
Articles
Part I. Preliminary 1-2
Part II. Supervision of Business of Insurance 3-4
Part III. Authorisation for carrying on Business of Insurance 5-13
Part IV. Conditions for carrying on Business of Insurance 14-18
Part V. Accounts, Actuarial Investigations and Financial
Statements 19-24
Part VI. Powers of Intervention 25-28
Part VII. Supervision of Authorised Companies 29-32
Part VIII. Transfer of Business of Insurance 33-37
Part IX. A cqu i si tion and D i sp osal o f Shares, Wi thdrawal,
Dissolution and Winding up 38-42
Part X. Conduct of Business of Insurance 43-48
Part XI. Protection and Compensation Fund 49-54
Part XII. General Provisions 55-69
SCHEDULES
First Schedule Provisions relating to Lloyd’s
Second Schedule Classes of long term business
Third Schedule Classes and groups of classes of general business
Fourth Schedule Provisions relating to insurance agents and managers
PRELIMINARY
Short title. 1. The short title of 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.
"advertisement", in relation to business of insurance, means any form of adverti si ng, w h eth e r don e verball y o r
in wri tin g, and , w ithou t prejudi ce to the gen e ralit y of the foregoing , includ es advertising in a publication, the display
of notices, signs, labels or showcards, by means of letters, circulars, prospectuses, catalogues, pri c e list s or ot her docu m
en ts, by an exh i b iti on of pi ctur es or pho tographic or ci nem a tographic fi lms, by way of sound broadcasting or television,
by the distribution of recordings or in any other manner, and references to the issue of an advertisement shall be construed accordingly;
"approved actuary" and "actuary" have the meaning assigned to them by article 22(5);
"approved auditor" and "auditor" have the meaning assigned to them by article 21(10);
"au t ho ri sat i o n ", i n r e l a tio n to bu sin e ss of insu rance, o r t o a matter connected there w ith or ancillary
thereto, means an a u thoris ation or a de emed a u th or i s at io n u n d e r th is A c t , an d "authorised" shall be
construed accordingly;
"body corporate" means any entity having a legal personality distinct from that of its members;
"branch" means premises of the company, other then its head office, from which the business of insurance is carried on;
"business of insurance" means the effecting and carrying out of contracts of insurance of such class or classes of long
term business or class or classes or part c l asses of general business a s respectively specified in the Second Schedule and
Part I of 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 of banking, of -
(i) contracts for fidelity bonds, performance bonds, administration bonds, bail bonds or customs bonds or similar contracts
of guarantee, being contracts effected by way of business (and not merely incidentally to some other business carried
on by the person effecting them) in return for the payment of one or more premiums;
(ii) capital redemption contracts;
(iii) contracts to manage the investments of pension funds,
and, in relation to contracts to manage the investments of pension funds, the expression "a person not carrying on business
of banking" includes "a person not carrying on investment services";
(b) any business carried on in connection with or ancillary to business of insurance;
(c) unless otherwise specified, business of reinsurance;
"cell" has the same meanin g as is assigned to it by the
Companies Act;
"cell company" has the same meaning as is assigned to it by the
Companies Act;
"commitment" means a commitment represented by any one or more of the kinds of classes of long term business contained in
the Second Schedule;
"company" includes a company whose head office is in Malta or in a country outside Malta;
"company whose head of fice is in M a lta" means a limited liability company formed and registered in Malta in accordance
with the Companies Act;
" c ompany whos e head office is in a country outside Malta" means a company, other than a European insurance undertaking,
registered, incorporated or constituted outside Malta under the laws of any country provided that such company has complied with
the provisions of any law which may from time to time be in force in Malta relating thereto;
"competent auth orit y" m e a n s t h e M a l t a F i n a n c i a l S e r v i c e s
Authority established by the Malta Financial Services Authority Act;
"conditions" includes obligations and restrictions;
"contract of insurance" and "contract", in relation to business of insurance, mean an agreement in which an insurer
agrees, for a consideration, to pay to or for the account of the insured a sum of money or other consideration, whether by way of
indemnity against loss, damage or liability or oth e r w ise, on th e hap p en ing of a spe c i fi ed ev en t with re spe c t to
whic h th er e is an el em e n t of uncertainty as to when or whether it will take place;
"co n t r o l ", i n r e la ti on to a b o d y co rp or at e, is th e po we r to det e rm in e th e fin a nc ia l and op
erating policies of th e bo dy corporate;
"controller", in relation to a body corporate, is a person who, alone or toge ther with othe rs , exercises c o ntrol of
the body corporate;
"cou nt ry o f t h e co mmi tment " means any coun try 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;
"co untry out si de Malta" m eans and in cludes any co untry, territory or place outside Malta;
"director", in relat i on to a com p any, incl udes an in divi dual occupying the position of a director of the company,
by whatever name he may be called, empowered to carry out substantially the same functions in relation to the direction of the company
as those
Cap. 386. Cap. 386.
Cap. 386.
Cap. 330.
Cap. 386.
Cap. 487. Cap. 487.
carried out by a director and, in respect of a company whose head office is in a country outside Malta, includes a member of a local
board, an agent and the person designated as the representative of that company for the purpose of sub-paragraph (i) of paragraph
(d) of article 11(1);
"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;
"establishment" means the head office, agency, or branch of an undertaking and includes any perm anent presence of
an undertaking in Malta, even if that presence does not take the form of a branch or agency but consists merely of an office managed
by the undertaking’s own staff or by an independent person who has express or implied authority to act for the undertaking;
"European insurance undertaking" means an undertaking having its head office in a Member State or an EEA State other than
Malta, pu rsuing the activit y of direct i nsurance wit hin th e meaning of article 1 of First Council Directive 73/239/EEC of 24 July 1973 on the coordination of laws, Regulations and administrative provisions relating to the taking-up and pursuit of direct
insurance other than life assurance or article 2 of Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance, which has receive d authorisation under
article 6 and article 4 of the said Directives respectively;
"financial year" shall be construed in accordance with article
19(4);
"functions" includes responsibilities, powers and duties;
"general business" has the meaning assigned to it by article 5(1); "guarantee fund" shall be construed in accordance
with article
16(1);
"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(1);
"in su rance ag ent" m eans a person enroll ed as such under the
Insurance Intermediaries Act;
"insurance manager" means a person enrolled as such under the
Insurance Intermediaries Act;
"insurance rule " mea n s a rule in respec t of the bus i ne ss of insuranc e which shall be bi nd in g on authorised companies
and others as may be specified therein, issued by the competent authority in virtue of article 4(2);
"insured" means the party to whom, or on whose account, or to whose beneficiaries, a su m of m oney or other consid eration
i s payable u nder a contract o f insurance on the happ ening o f a specified event;
"insurer" means the party to a contract of insurance who agrees to pay a sum of money or other consideration on the happening
of a specified event;
"Lloyd’s" has the meaning assigned to it in article 48A;
"long term business" has the meaning assigned to it by article
5(1);
"Malta’ s i n ternatio nal co mm itm ents" m eans Malt a’ s commitments, responsibilities and obligations arising
out of its membership of, or accession to the Europ ean Union, or membership of, or af filiation to, or relationship with,
any int e rnat io nal , gl ob al or regi ona l o rgan i sati on s o r grou pin g of countries or out of any treaty, convention or
other international agreement, however called, whether bilateral or multilateral, to which Malta is a party;
"margin of solvency" and "Malta margin of solvency" and "EEA
margin of solvency" shall be construed in accordance with article
14;
" M embe r S t at e" me an s a Me mbe r S t a t e o f th e Eu rope a n
Communities;
"Minister" means the Minister responsible for finance;
"money laundering" has the same meaning as is assigned to it by the Prevention of Money Laundering Act;
"mutual association" shall be construed in accordance with article 6(3);
"officer", in relation to a company, includes a director, partner, manager or company secretary or any person effectively
acting in such capacity whether formally appointed or not;
"overseas regulatory authority" means an authority which in a country outside Malta exercises any function corresponding
to -
(a) a function of the Minister under this Act; or
(b) a function of the competent authority thereunder;
"own funds" shall be construed in accordance with an insurance rule made by the competent authority for the purposes of
this Act to determine the amount of, and the components which make up, the company’s own funds;
"policy", in relation to business of insurance, means and includes a policy or a similar document, by whatever name it may
be called, evidencing a contract of insurance;
"policyholder" means the person who for the time being is the legal holder of the policy for securing the contract with
the insurer;
"prem i um" m e ans the con s ideration paid o r payab l e by an insured under a contract of insurance;
"prescribed" means prescribed by regulations made under this
Act;
"qualifying shareholding" means a direct or indirect holding in a com pany which represents ten per centu m or m ore of
the share
Cap. 373.
capital or of the voting rights, taking into account the voting rights as set out in Articles 9 and 10 of D i rective 2004/109/EC
of the European Parliament and of the Council of 15 December 2004 on the harm onisation of transparency requirements in relation to
information about issuers whose securities are admitted to trading an d ame n d i n g Directive2001/34 /EC, as we ll as the conditions regarding aggregation thereof laid down in Article 12(4) and (5) of that Directive, or which makes it
possible to exercise a significant i n fluen ce ov er the man a gem e nt of the company 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
n o t t ake i n to acc ou nt vo t in g ri gh t s or sha r es wh i ch i nv es tm en t firms or credit institutions may hold as a result
of providing the underwriting of financial instruments and, or placing of financial instruments on a firm commitment ba sis in terms
of point 6 of Section A to Annex 1 to Directive 2004/39/EC, provided that those ri gh t s a r e, o n t h e on e ha nd , no t exercised or otherwise used to i n ter v en e in th e m a n a ge
m e n t of th e issuer an d, on the oth e r, disposed of within one year of acquisition;
Cap. 386. "reconstruction" has the same meaning as in the Companies Act; "reinsurance" means the activity consisting in accepting risks
ceded by an insurance und ertaki n g or by anoth e r reinsurance
undertaking;
"risk situated in Malta" means and includes -
(a) in the case where the insurance relates either to buildings or to buildings and their contents, in so far as the contents
are covered by the same insurance policy, any risk related to property situated in Malta;
(b) in the case where the insurance relates to vehicles of any type, any risk related to any vehicles registered in Malta:
Provided that, where a 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 of delivery by the purchaser for a period of thirty days, even though the vehicle
has not been formally registered in Malta;
(c) in the case where the insurance relates to travel or holiday risks, whatever the class concerned, any risk related to
travel or holiday if the policy covering the risk is of a duration of four months or less and the policy is taken out in Malta;
(d) in the case where the insurance relates to any risk of any kind, other than a risk specified in the foregoing paragraph (a), (b) or (c), any risk of 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;
"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;
"technical provisions", in relation to business of insurance, shall be construed in accordance with article 17(1) to (5);
"valuation regulations" means regulations made under article 63; "vehicle" has the same meaning as is assigned
to motor vehicle
by article 2 of the Motor Ve hicl e Insurance (Third Party Risks)
Ordinance;
"working days" shall not include Saturdays and the days referred to in the National Holidays and Other Public Holidays Act.
(2) The objective of this Act is, in part, to implement the provisions of:
(a) First Council Directive of 24 July 1973 on the coordination of laws, Regulations and administrative provisions
relating to the taking-up and pursuit of direct insurance other than life assurance (73/239/ EEC);
(b) Second Council Directive of 22 June 1988 on the coordination of laws, regulations and administrative provisions relating
to direct insurance other than life assurance and laying down provisions to facilitate the effective exercise of freedom to provide
services and amending Directive 73/239/EEC (88/357/EEC);
(c) Council Directive 92/49/EEC of 18 June 1992 on the coordination of laws, regulations and administrative provisions relating to direct insurance other than
life assurance and amending Directives 73/239/EEC and
88/357/EEC (third non-life insurance Directive);
(d) Directive 2002/12/EC of the European Parliament and of the Council of 5 March 2002 amending Council Directive 79/267/EEC as regards the solvency margin requirements for life assurance undertakings;
(e) Directive 2002/13/EC of the European Parliament and of the Council of 5 March 2002 amending Council Directive 73/239/EEC as regards the solvency margin requirements for non-life insurance undertakings;
(f) Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance;
(g) Directive 2005/14/EC of the European Parliament and of the Council of 11 May 2005 amending Council Directives 72/166/EEC, 84/5/EEC, 88/357/EEC and
90/232/EEC and Directive 2000/26/EC of the
European Parliament and of the Council relating to insurance against civil liability in respect of the use of
Cap. 386.
Cap. 104.
Cap. 252. Scope.
motor vehicles;
(h) Directive 2005/68/EC of the European Parliament and of the Council of 16 November 2005 on reinsurance and amending Council Directives 73/239/EEC, 92/49/ EEC as well as Directives 98/78/EC and 2002/83/EC;
(i) Directive 2007/44/EC of the European Parliament and of the Council of 5 September 2007 amending Council Directive 92/49/EEC and Directives 2002/83/EC,
2004/39/EC, 2005/68/EC and 2006/48/EC as regards procedural rules and evaluation criteria for the
prudential assessment of acquisitions and increase of holdings in the financial sector; and
(j) any other Directive of the European Parliament and of the Council that may be issued from time to time relating to
the regulation of and the prudential requirements applicable to insurance companies,
which shall be interpreted and applied accordingly.
(3) In this Act and in any regulations made thereunder, if there is any con f lict between th e English an d t h e Mal t ese text
s, th e English text shall prevail.
Competent authority. Amended by: XVII. 2002.237. Substituted by: XII. 2006.77;
X. 2011.75.
SUPERVISION OF BUSINESS OF INSURANCE
Powers and duties of the competent authority. Amended by:
XVII. 2002.238; XII. 2006.78;
X. 2011.76.
(a) the protection of insured persons, policy holders and the general public;
(b) the protection of the reputation of Malta, taking into account Malta's international commitments; and
(c) the promotion of competition and choice.
(2) The competent authority may make insurance rules as may be required for carrying into effect any of the provisions of this
Act and of any regulations made thereunder. The competent authority may amend or revoke such insurance rules.
(3) Insurance rules and any amendment or revocation thereof shall be officially communicated to the persons concerned and be open
to public inspection at the offices of the competent authority at all times during the normal working hours of the authority.
(4) Insurance rules imposing an obligation or requirement on
the public shall be made by regulations in accordance with article
64.
AUTHORISATION FOR CARRYING ON BUSINESS OF INSURANCE
"long term business" means business of insurance of any of the classes specified in the Second Schedule, and
"general business" means business of insurance of any of the classes specified in Part I of the Third Schedule.
(2) For the purposes of this Act, the effecting and carrying out of a contract of insurance whose principal object is within one
class of business of insurance, but which contains related and subsidiary prov isio ns wi thi n ano t h e r class or cl asses, sha
ll be ta ken to co nst itute th e carrying on of bus iness of in sur ance of th e first- mentioned class, and no other, if subarticle
(3) or (4) applies to the contract.
(3) This subarticle applies to a contract whose principal object is wi th in any class of l ong term busi n ess bu t w h ich con
t ai ns subsidiary provisions within general business class 1 or 2 if the company is authorised under ar ticl e 7 to car ry on
l ong te rm business class 1.
(4) This subarticle applies to a contract whose principal object is within one of the classes of general business but which contains
subsidiary provisions within another of those classes, not being class 14, 15 or 17:
Provided that the risk included in class 17 shall be deemed to be an ancillary risk of class 18 if the conditions of subarticle (5)
are satisfied and where the main risk relates solely to the assistance provided to persons in difficulty while travelling or away
from their home or permanent residence, and the risk included in class
17 shall also be deemed an ancillary risk where it concerns disputes or risks arising out of or in connection with, the use of seagoing
vessels and the conditions of the said subarticle are satisfied.
(5) The conditions referred to in subarticle (4) are the following:
(a) that the risks to be insured are connected with the principal risk;
(b) that these risks concern the object which is covered under the principal risk; and
(c) that they are covered by the contract insuring the principal risk.
(6) The Minister may, after consultation with the competent authority, make regulations determining the class or classes of
long term business and the class or classes or part classes of general
Classification of business of insurance. Amended by: XVII. 2002.239; XII. 2006.79.
business that may be effected and carried out under this Act.
(7) The competent authority may, by an insurance rule made for the purpose of this article, determine that long term business contracts
of insurance as may be specified be of a kind as may be specified or be expressed to be in effect for a period as may be specified.
(8) The competent authority may, by an insurance rule made for the purposes of this articl e, pr ov id e th at gen e r a l bu sin
e ss contracts of insurance of a kind specified in the rule contain such conditions or include such requirements or arrangements
as may be determined by the rule.
Restriction on carrying on business of insurance. Amended by: XVII. 2002.240; XII. 2006.80.
(2) Without prejudice to subarticle (1), no company whose head office is in Malta shall carry on, nor hold itself out as
carrying on, business of insurance in or from a country outside Malta, unless authorised by the competent authority.
(3) Subarticles (1) and (2) shall not apply to:
(a) a mutual association if such mutual association satisfies such requirements as may be set out in an insurance
rule made for the purpose; or
(b) a European insurance undertaking having its head office in a Member State or an EEA State establishing a branch or providing
services in Malta in exercise of a European right.
(4) The Minister, acting on the advice of the competent authority, may make regulations under this article -
(a) declaring certain services and activities ancillary to or connected with business of insurance as not constituting
business of insurance for any or all of the purposes of this Act;
(b) prescribing the persons who may carry out such services and activities and the persons to or for whom such services and
activities may be rendered;
(c) providing for any matter incidental to or connected with the above, and for the better carrying out of the provisions of
this subarticle.
(5) In the event of a doubt as to whether an activity constitutes business of insurance, or whether business of insurance is or
is not being carried on in or from Malta, the matter shall be conclusively determined by the competent authority.
(a) in the case of a company whose head office is in Malta, in or from Malta or in or from a country outside Malta;
(b) in the case of a company whose head office is in a country outside Malta, in or from Malta,
such of the classes of business of insurance specified in the Second or Third Schedule, or such parts of those classes, as
may be specified in the authorisation.
(2) An authorisation under this article may be restricted to business of reinsurance; and a company may not carry on business
of reinsurance by virtue of an authorisation under this article unless the authorisation expressly extends to such business.
(3) The competent authority shall have the power to require any company to provide such information as it may deem necessary for
the purpose of determining an application for authorisation.
(4) An authorisation under this article shall only be issued if the competent authority is satisfied, on the basis of the information
r e q u i r ed to be su bmi t t e d u n d e r th is Act an d an y in form at io n received by it, that the authorisation ought to
be granted.
(5) An authorisation issued under this article may identify classes or pa rt cl asse s of g e neral bu sin e ss by referrin
g to th e appropriate groups specified in Part II of the Third Schedule.
(6) Subject to the provisions of 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.
(7) Subject to subarticle (8), the competent authority shall determine an application for authorisation under this article
within six months of receiving the information required to be submitted under this Act; and if it refuses to issue the authorisation
it shall inform the applicant in writing of the reasons for the refusal.
(8) Where the authorisation sought is one restricted to reinsurance, the period prescribed by subarticle (7) shall
be of three months.
(9) On the issue to a company of an authorisation under this artic l e, a n y previous au th or isati o n o f th at comp any u
n d e r th is article shall lapse.
Authorisation by competent authority for carrying on business of insurance. Amended by: XVII. 2002.241.
(a) an application for authorisation is made in writing by a company in such form and manner as the competent authority may from
time to time determine;
(b) (i) in so far as a company whose business is not restricted to reinsurance business, the company’s objects
are limited to business of
Authorisation requirements. Amended by: XVII. 2002.242; XII. 2006.81;
L.N. 426 of 2007.
insurance and operations arising directly therefrom, to the exclusion of all other commercial business;
(ii) in so far as a company carrying on business restricted to reinsurance, the company’s objects are limited to the
business of reinsurance and related operations, as may be specified by an insurance rule made for the purposes of
this article;
(c) the company has disclosed to the satisfaction of the competent authority such information as the competent authority has requested
of it in relation to persons who will, upon the authorisation of the company, have any proprietary, financial or other interest
in, or in connection with, that company;
(d) all qualifying shareholders, controllers and all persons who will effectively direct the business of insurance are fit and
proper persons to ensure its sound and prudent management;
(e) the company has submitted to the satisfaction of the competent authority a scheme of operations which shall include
the particulars or proof as may be determined by an insurance rule made for the purpose of this article;
(f) the company’s own funds, whether in euro or in other currencies acceptable to the competent authority are, at all times, not
less than such amount appropriate for the kind of business to be carried on, or being carried on, by the company, as may be
determined by an insurance rule made for the purposes of this Act; and such own funds are unencumbered at all times.
(2) Where close links exist between a company applying for authorisation and any other person, the competent authority shall:
(a) only issue an authorisation if it considers that such close links do not prevent it from effectively exercising
its supervisory functions; and
(b) refuse to issue such authorisation if it considers that the laws, regulations or administrative provisions of any country,
other than Malta, governing any person with whom the company has close links, or their enforcement, prevent it from effectively
exercising its supervisory functions.
(3) The competent authority may, from time to time, by means of an insurance rule issued under this Act define the circumstances
in whic h close links are to be re garde d as e x isting between a company and any other person.
(a) the long term business is restricted to reinsurance; or
(b) the general business carried on by the company is restricted to classes 1 and 2 of Part I of the Third Schedule (accident and sickness) or to any class or part of a class of business within that group.
(2) Without prejudice to the provisions of subarticle (3), the provisions of this article shall not apply to a company 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 of subarticle (1) until such time as the Minister may by Order in the Gazette establish.
(3) A company authorised as aforesaid shall, in respect of long term business and general business, be managed separately in a
manner as may be determined by an insurance rule made for the purpose of this article.
Combination of long term business and general business.
Amended by: XVII. 2002.243;
XII. 2006.82.
(a) the company has fulfilled or complied with the requirements of articles 8 and 14 and, where appropriate,
of article 9; and
(b) the company submits proof that it maintains the minimum guarantee fund in accordance with article
16.
(2) A company authorised as aforesaid may, with the approval of the competent authority given in writing -
(a) open a branch in Malta; (b) appoint:
(i) an insurance manager; or
(ii) an insurance agent; or
(iii) both an insurance manager and an insurance agent.
(3) Except with the written consent of the competent authority, no company authorised as aforesaid may open a branch, agency or
set up or acquire any subsidiary in any country outside Malta.
Applicants with head office in Malta.
Amended by: XVII. 2002.244;
XIII. 2004.111;
XII. 2006.83.
(a) the company has fulfilled or complied with the requirements of articles 8 and 14, and, where appropriate, of article 9;
Applicants with head office outside Malta.
Amended by: XVII. 2002.245;
XII. 2006.84; XX. 2007.127.
General representatives. Amended by: XIII. 2004.112.
(b) the company is permitted in the country where its head office is situated to carry on the business of insurance which forms the
object of the application;
(c) the company maintains in Malta at all times assets of such kind and amount as may be prescribed by or determined in
accordance with regulations made for the purposes of this Act; and, where the authorisation sought or held is one not restricted
to reinsurance, the whole or a specified proportion of such assets as may be prescribed or determined is deposited with and held
in custody for the company’s account by a person as may be prescribed under article 18;
(d) the company has in Malta at all times:
(i) a representative fulfilling the requirements of article 12; and
(ii) a branch as defined by subarticle (2); or
(iii) an insurance agent; or
(iv) both a branch and an insurance agent.
(2) In relation to a branch of a company whose head office is in a country outside Malta, the business of insurance shall be carried
out fro m such b r an ch by a person ful f ill ing th e foll owi n g requirements of this subarticle:
(a) the person must be an individual resident in Malta or an insurance manager who has been designated by the company for the purpose
of this article;
(b) where the person is an individual -
(i) the person must not be the approved auditor, or a partner or an employee of the approved auditor, of the company;
(ii) the person possesses the qualifications and fulfils or complies with the requirements determined by an
insurance rule made for the purpose of this article; and
(iii) the person is fit and proper to ensure its sound and prudent management.
12. (1) The requirements referred to in article 11(1)(d)(i) are those set out in the following provisions of this article:
(a) the representative must be a person resident in Malta who has been designated as the company’s representative
for the purpose of this article;
(b) the representative must be authorised to act generally, and to accept service of any document, on behalf of the company;
(c) the representative must not be the approved auditor, or a partner or an employee of the approved auditor, of the company;
(d) if the representative is not an individual, it must be a company whose head office is in Malta and must itself
have an individual representative resident in Malta who is authorised to act generally, and to accept service of any
document, on behalf of the company, in its capacity as representative of the company.
(2) Without prejudice to the provisions of subarticle (1), the general representative shall not be personally liable for the debts
and obligations of the company referred to in article 11.
CONDITIONS FOR CARRYING ON BUSINESS OF INSURANCE
(2) A company whose head office is in a country outside Malta authorised under this Act shall maintain at all times -
(a) a margin of solvency, and
(b) a Malta margin of solvency, or
(c) an EEA margin of solvency,
of such amounts as may be prescribed by or determined in accordance with the regulations made for the purposes of
this article.
(3) Without prejudice to article 15, a company authorised as aforesaid which fails to comply with subarticle (1) or (2) -
(a) shall submit to the competent authority a plan for the restoration of a sound financial position; and
(b) shall propose modifications to the plan (or the plan as previously modified) if the competent authority considers it
inadequate; and
(c) shall give effect to a plan acceptable to the competent authority.
(4) For the purposes of this Act -
(a) the margin of solvency of an authorised company is the excess of the value of its assets, over the amount of its liabilities,
that value and amount being determined in accordance with any applicable valuation regulations;
(b) the Malta margin of solvency is the margin of solvency of an authorised company computed by reference to the assets and liabilities
of the business carried on by that company in Malta;
(c) the EEA margin of solvency is the margin of solvency of an authorised company computed by reference to
Insurance agents and managers.
Margins of solvency. Amended by: XIII. 2004.113; XII. 2006.86; XX. 2007.128.
the assets and liabilities of the business carried on by that company in all Member States and EEA States.
(5) In the case of an authorised company which carries on both long term business and general business, subarticles (1) and (2)
shall have effect as if -
(a) the requirements to maintain a margin of solvency, and
(b) where the company carries on both kinds of business in or from Malta, the requirement to maintain a Malta margin of solvency,
were requirements to maintain separate margins in respect of the two kinds of business (and accordingly as if the reference
in subarticle (4)(a) to assets and liabilities were a reference to assets and liabilities relating to the kind of business in question).
(6) In applying subarticle (4), the amount of the company’s li ab il it i e s sh al l b e t a ken to b e increased by the
amount of any reserve maintained under article 17(6).
Failure to maintain the minimum margin of
solvency.
Amended by:
XII. 2006.87.
(a) the margin of solvency of an authorised company to which article 14(1) applies, or
(b) the margin of solvency or Malta margin of solvency of an authorised company to which subarticle (2) of that article applies,
falls below such amount as may be prescribed by or determined in accordance with regulations made for the purposes of that article,
the company shall notify the competent authority and make good, to the satisfaction of the authority, any such deficiency without
delay, and in no case later than fifteen days from the day of such notification.
(2) For so long as the margin of solvency or the Malta margin of solvency of a company is less than that required to be maintained
as aforesaid-
(a) the company shall not assume any new risk of any kind whatever;
(b) the Competent Authority may -
(i) in the case of a company whose head office is in Malta, restrict or prohibit the disposal of the company’s assets;
(ii) in the case of a company whose head office is in a country outside Malta, restrict or prohibit the disposal of the company’s
assets in Malta,
and, in each case, take any other measure it deems necessary to safeguard the interests of the policyholders and creditors.
(3) Where a company is required by virtue of article 14(5) to m a in tain separ a te m a rg ins of solv ency in respect of l ong
ter m business and general business, subarticle (1) shall have effect as if any reference to the margin of solvency or the Malta
margin of
solvency of the company were a reference to the margin in respect of either of the two kinds of business.
(a) in the case of a company whose head office is in Malta, the margin of solvency required to be maintained
by the company under article 14(1) thereunder;
(b) in the case of a company whose head office is in a country outside Malta, the Malta margin of solvency required to be maintained
by the company under article 14(2).
(2) The amount of the guarantee fund required to be maintained by this arti cle shall be no t less th an an amount (the "min
imum g u arantee fu nd") as may be pr escrib ed by or determi n ed i n accordance with regulations made for the purposes of
this article.
(3) In the case of a company which carries on both long term business and general business, subarticle (1) shall have effect as
if the requirements to maintain a guarantee fund were requirements to maintain separate guarantee funds in respect of the two kinds
of business (and accordingly as if the references in that subarticle to assets, m argin of solvency and Malt a marg in of solvency
were r e ferences to assets, marg in of s o lvency and Malta marg in of solvency relating to the kind of business in question).
(4) The assets required to be maintained in Malta by or under t h i s Act shal l no t be tran sferr e d , wi th dr awn or i n
any way encumbered without the permission of the competent authority given in writing or until the company has ceased to carry on
the business it was authorised to carry on and proves to the satisfaction of the authority that it has no further liability. Such
assets shall not be attachable by any court.
Guarantee fund to be maintained by authorised companies. Amended by:
XVII. 2002.246; XIII. 2004.114;
XII. 2006.88.
(2) A company authorised as aforesaid shall at all times hold unencumbered assets equal to the value of its technical provisions
and after making adequate provision for all its other liabilities.
(3) The assets covering the technical provisions shall take account of the business and the classes or part classes of business
carried on by a company in such a way as to secure the safety, yield and m a rket abilit y of its investments, which the company
shall ensure are diversified and adequately spread in accordance with regulations made for the purposes of article 63.
(4) The technical provisions must at all times be covered by
Technical provisions. General business: equalisation reserve.
Amended by: XVII. 2002.247;
XII. 2006.89.
equivalent and matching assets provided that, with the approval of the competent authority given in writing, a company may hold non-
matching assets to covering a sum not exceeding an amount as may be prescribed by or determined in accordance with regulations made
for the purposes of article 63.
(5) For the purposes of this article, the expression "matching assets" means the rep r esent a tio n o f u nder w r iti
ng liab i l iti es expressed in a particular currency by assets expressed or realisable in the same currency.
(6) Without prejudice to the foregoing subarticles (1) and subject to subarticle (7), every com pany authorised to carry
on general business of a prescribed d escript ion shall m a intain, in accordance with regulations made for the purposes of this
article, a reserve, hereinafter referred to as equalisation reserve, in respect of its general business of that description.
(7) Subarticle (6) shall not apply to such company authorised as a f ores aid as may be pres cr ibed for the purposes of thi s
subarticle.
(8) Regulations made for the purposes of this article may, with respect to an equalisation reserve, make provision -
(a) as to the circumstances in which, and the times at which, amounts are to be placed to, or taken from, an equalisation
reserve;
(b) as to the determination of the amounts to be so placed or taken; and
(c) as to such other matters incidental to the maintenance of an equalisation reserve as the Minister may, after consultation with
the competent authority, consider expedient.
Custody of assets required to be maintained in Malta.
(2) Any requirement by or under this Act that assets of 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 of the competent authority
subject to such regulations as may be prescribed for such purpose under this Act.
(3) Any provision by or under this Act requiring a company to maintain in Malta assets of any kind or amount may be satisfied by
the c ompa ny if the company produ ces a sec urity in a form and manner to the satisfaction of the competent authority subject to
such regulations as may be prescribed for such purpose under this Act.
ACCOUNTS, ACTUARIAL INVESTIGATIONS AND FINANCIAL STATEMENTS
(2) No company as aforesaid shall alter its financial year unless and until the competent authority has given its approval in writing
on an application made to it in that behalf.
(3) Every company whose head office is in a country outside Malta ap pl yin g f o r au th ori s at ion u nder ar ticle 7 t o carry
o n business of insurance in or from Malta, shall notify in writing the competent authority of its financial year; and where an authorised
com pany as afo resaid alte rs its f inancial year i t shall forthwith notify in writing the competent authority of such change.
(4) For the purposes of this Act, financial year -
(a) in relation to an authorised company whose head office is in Malta, means an accounting period as is construed in accordance
with articles 164 to 166 of the Companies Act;
(b) in relation to an authorised company whose head office is in a country outside Malta, means an accounting
period as is construed in accordance with the provisions of the laws of the country where the head office of the company is situated
governing the accounting period of such companies.
Financial year of authorised companies.
Cap. 386.
(a) forward to the competent authority;
(b) publish in abridged form in at least two local daily newspapers of which one is published in the Maltese language and the
other in the English language. This requirement shall not apply in the case of a company which carries on business restricted to
risks situated outside Malta or commitments where Malta is not the country of commitment;
(c) exhibit in a conspicuous position in each of its offices, agencies and branches in Malta and keep so exhibited throughout the
following twelve months,
Drawing up and publication of audited financial statement. Amended by: XVII. 2002.248; XII. 2006.90;
XX. 2007.129.
a copy of its audited financial statements drawn up -
(i) in the case of a company whose head office is in Malta, in accordance with regulations made for the purposes of this article;
and
(ii) in the case of a company whose head office is in a country outside Malta, in accordance with the provisions of the laws of
the country where the head office of the company is situated governing the financial statements of such companies.
(1A) In each of the cases referred to in paragraphs (i) and (ii) in sub a r ticl e (1 ) t h e co mpany sh al l pro v i d e a co py
o f i t s au di ted financial statements to any person applying for such copy:
Provided that the company may charge such reasonable fees not exceeding the administrative costs incurred in producing such copy.
(2) The form and content of the statements required to be pu bli s hed u n d e r sub a r ticle (1)( b ) shall be suc h as shall be prescribed by the regulations.
(3) In the case of a company whose head office is in Malta, subarticle (1)(c) shall apply as respects the company’s offices, age n cies an d branche s i n a co untry outsid e Ma lta in the sa me manner and
to the same extent as it applies to its offices, agencies and branches in Malta.
Appointment, duties and termination of appointment of auditors. Amended by: XII. 2006.91.
(2) If an authorised company fails to appoint an auditor as required by subarticle (1), or at any time fails to fill any
vacancy in the office of auditor, the competent authority shall have the power to appoin t an audi tor for that com p any and
sh all fi x the remuneration to be paid by that company to such auditor.
(3) The auditor ’s report shall include a statement as to whether the various requirements of this Act and of any regulations
made thereunder, and of any insurance rule in respect of the company have been complied with and observed and any provisions made
for that purpose.
(4) Every auditor of an authorised company shall have the right to demand such information or explanation as he deems necessary
in the performance of his duties from any officer or employee of, or any person under an appointment from, that company.
(5) An auditor shall immediately give notice in writing to the competent authority if -
(a) he resigns;
(b) he does not seek to be re-appointed; or
(c) he decides to qualify the audit report,
and, in the case of a resignation, the auditor shall specify the reasons for so doing.
(6) An authorised company shall give notice in writing to the competent authority immediately it receives notice of a resolution
intended to be put before the company’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.
(7) Where, for any reason whatever, the appointment of an auditor comes to an end, the authorised company shall, not later
than fourteen days from the termination of such appointment, give notice in writing to the competent authority stating reasons for
such termination.
(8) The competent authority may require an authorised company to change its appointed auditor where, in the competent
auth orit y’s op inio n, such audit o r is consid ered u n fit for t h is appointment, at any time during his term of office.
(9) Before requiring an authorised company to change its appointed auditor in the circumstances mentioned in subarticle
(8), the competent authority shall notify in writing its intention to the company and the auditor concerned stating reasons for requiring
such change and giving the auditor the opportunity to submit in writing within fourteen days from the date of serving of such notice
reason wh y its appo intment with the co m p any should not be terminated.
(10) For the purposes of this Act, an approved auditor shall be a person who is qualified to be an auditor in accordance with the
Comp anies Act , an d ho lds th e auth oris ation of the competent authority issued to him in accordance with regulations made for the purpose of
this article.
(11) Notwithstanding anything contained in the foregoing subarticles, the competent authority may, in the case of a company
wh ose head o ffice is in a country outside Malta authorised as aforesaid, approve such altern ative arrangemen t s as i t thinks
r e ason ab le and wh ich do not materi al ly detract f r om the m a i n objects of this article, and where su ch arrangements have
been car ri ed ou t, th e pr ov isi on s o f th is article shall not a pply to the extent that they are replaced by such arrangements.
(12) Subject to the provisions of subarticle (10), in so far as the provisions of this article are inconsistent with the provisions
of the Companies Act, the provisions of this article shall prevail, and the provisions of the said Act shall, to the extent of the inconsistency, not
apply to authorised companies as aforesaid.
Cap. 386.
Cap. 386.
(a) within thirty days of beginning to carry on such business, appoint an approved actuary as actuary to the company;
(b) whenever the appointment comes to an end, within
Appointment of actuary by company with long term business. Amended by:
III. 2009.25.
appointment.
(2) A company making an appointment under subarticle (1) sh all, wit h i n f o u r t een day s , inf o r m t h e c o m p
ete n t aut hor it y in writing stating that fact, the date of such appointment and the name and qualifications of the person appointed;
and if an appointment under that subarticle comes to an end, the company shall, within fourteen days, inform the authority in writing
stating that fact, the name of the person concerned and the reasons for such termination.
(3) If, on the expiry of any period specified in subarticle (1), the company fails to make the required appointment, the company
sh al l no t effect an d car r y ou t any new lo ng ter m co ntracts of insurance until the appointment is made.
(4) Notwithstanding the provisions of subarticle (2), the competent authority may, within fourteen days of receiving
a notice of termination of an appointment of an approved actuary, request in writ ing the ap prov ed actuary con c erned to giv e
in writin g th e reasons for such termination; and the actuary shall, within fourteen days, give reasons in writing.
(5) For the purposes of this Act, an approved actuary is a person who -
(a) is a fellow of an institute of actuaries, or a fellow of a faculty of actuaries, or holds actuarial qualifications of similar
standing of an institute of repute recognised for such purposes by the competent authority and holds appropriate practical experience
as an actuary; and
(b) holds the Authority’s authorisation to act as actuary to a company authorised to carry on long term business.
Periodic actuarial investigation of company with long term business. Amended by:
XVII. 2002.249; XII. 2006.92.
(a) shall, at the close of its financial year, cause an investigation to be made into its financial condition in respect
of that business by the person who for the time being is its actuary under article 22(1); and
(b) when such an investigation has been made, or when at any other time an investigation into the financial condition of the
company in respect of its long term business has been made with a view to the distribution of profits, or the results of which
are made public, shall cause an abstract of the actuary’s report of the investigation to be made and such abstract
to be available to the policyholders of the company for inspection at the offices of the company.
(2) An investigation to which subarticle (1)(b) relates shall include -
(a) a valuation of the liabilities of the company attributable to its long term business; and
(b) a determination of any excess over those liabilities of
the assets representing the fund or funds maintained by the company in respect of that business and, where any rights of any long
term business policyholders to participate in profits relate to particular parts of such a fund, a determination of any
excess of assets over liabilities in respect of each of those parts.
(3) For the purposes of any investigation to which this article applies, the value of any assets and the amount of any liabilities
shall be determined in accordance with any applicable valuation regulations.
(4) The form and content of any abstract under this article shall be such as may be determined by an insurance rule made for the
purposes of this article.
(5) Where an investigation is made, the actuary’s report of the investigation shall be forwarded by the company concerned to
the competent authority -
(a) with regard to an investigation made at the close of the company’s financial year, together with the audited financial
statements of the company required to be forwarded under article 20;
(b) with regard to an investigation made at any other time, not later than thirty days from the close of the investigation.
(6) Notwithstanding the provisions of subarticle (1), the competent authority may in writing, at any time, direct a
company authorised as aforesaid to cause to be forwarded to it a valuation of the company’s liabilities outstanding at the date
specified in the di rection on accoun t of its long term business, together with a statement prepared by the actuary of the company
concerned, in the form and content as the competent authority may by the insurance rule determine.
(7) Subarticle (1)(b), subarticles (2) and (4), and subarticle (5)(b) shall not apply to a company if its business is restricted to reinsurance.
(8) Notwithstanding anything contained in any of the foregoing su barticles, in the case of a co mpany whose head office is in
a country outside Malta authorised to carry on long term business, the competent authority may approve such alternative arrangements
as it thinks reasonable and which do not materially detract from the main objects of this article, and where such arrangements have
been carried out, the provisions of this article shall not apply to the extent that they are replaced by such arrangements.
Obligations of auditors and actuaries to the competent authority. Amended by: XVII. 2002.250.
authority through the company’s management, or if circumstances so warrant, directly to the competent authority.
(2) For the purposes of subarticle (1), any matter which relates to and may have a serious adverse effect includes any matter which:
(a) is likely to lead to a serious qualification, or refusal of, the auditor ’s report on the accounts of the company; or
(b) gravely impairs the company's ability to continue as a going concern; or
(c) may be prescribed by the Minister.
(3) An auditor or actuary, as the case may be, of an authorised company shall li kewi se have a duty to repo rt to the competent
authority any facts and decisions which relate to or have a serious ad verse effect up on th e i n sured, t h e pol icy hol der o
r a ny oth e r in terested person, relating to t h e com p any, or of the branch in Malta of a company whose head office is outside
Malta, of which he becomes aware in his capac ity as auditor of or actuary to a company having close links, within the meaning of
article 8.
Automatic revocation of an authorisation.
POWERS OF INTERVENTION
(a) does not commence to carry on business pursuant to the authorisation within twelve months of its issue, or within such other
period as may be specified in the authorisation; or
(b) is declared bankrupt or goes into liquidation or makes a composition with its creditors or is otherwise dissolved;
or
(c) has ceased to operate as a result of a merger with another company carrying on business of insurance or for any other
reason whatsoever; or
(d) is a company whose head office is in a country outside Malta, and the overseas regulatory authority in the country of
registration, incorporation or constitution withdraw the authorisation from the company.
Power of the competent authority to suspend or revoke an authorisation. Amended by:
XVII. 2002.251; XII. 2006.93.
(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 company 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 made thereunder or any insurance rule;
or
(b) the authorised company ceases to carry on the business for which the authorisation was issued; or
(c) the authorised company suspends payment or is about to suspend payment; or
(d) it considers that the authorised company does not fulfil or comply with the requirements of, or has contravened,
any of the provisions of this Act and any regulations made thereunder, or any insurance rule, or has failed to satisfy or comply
with any condition to which it or the authorisation held by it is subject by virtue of or under this Act; or
(e) it considers that any officer who effectively controls the business the company is authorised to carry on is no longer a fit
and proper person to ensure its sound and prudent management; or
(f) it receives a written request so to do from the authorised company; or
(g) the authorised company no longer possesses the required own funds; or
(h) the authorised company is likely to become unable to meet its obligations or can no longer be relied upon to fulfil or satisfy
its obligations towards insureds, policyholders, creditors or other interested persons; or
(i) close links within the meaning of article 8, exist between the authorised company and another person, and the competent
authority is prevented from exercising its supervisory functions effectively either by reason of those close links or
by reason of any law, regulation or administrative provision of a country outside Malta governing that other person,
or by reason of difficulty in their enforcement.
(2) Every notice given under subarticle (1) shall state that the company concerned may, within such reasonable period after the
service thereof as may be stated in the notice (being a period of not less than forty-eight hours and not longer than fifteen 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.
(3) The competent authority shall notify in writing its final decision to the company concerned.
(4) An authorisation issued to a company whose head office is in a country outside Malta may only be revoked after consultation
Notification of suspension or revocation of an authorisation.
wi th th e overseas regulato r y aut hori t y of the cou n try of registration, incorporation or constitution, unless the competent
authority decides that the matte r is ur gent or that there are circumstances which make such prior consultation inappropriate.
(5) In the case of a suspension or a revocation of an aut horisation of a com p any whose h e ad office i s
in Malta, the competent authority shall inform the overseas regulatory authority of any state in which the company or its subsidiaries
are carrying on the business of insurance.
Power of the competent authority to protect the public interest. Amended by:
XVII. 2002.252; XIII. 2004.115;
XII. 2006.94.
(a) require the company forthwith to take such steps as the competent authority may consider necessary to rectify or remedy the matter;
(b) appoint a person to advise the company in the proper conduct of its business;
(c) appoint a person to take charge of the assets of the company, or any portion of them, for the purposes of safeguarding the interests
of insureds, policyholders, creditors and shareholders of the company;
(d) appoint a person to assume control of the business of the company either to carry on that business or to carry out such other
function or functions in respect of such business, or part thereof, as the competent authority may direct;
(e) issue an order for the dissolution and winding up of the company or, in the case of a company whose head office is in
a country outside Malta, for the winding up of its business in Malta;
(f) appoint a competent person to act as liquidator for the purpose of winding up the affairs of the company;
(g) fix the remuneration to be paid by the company to any person appointed under this article;
(h) require the company to submit a financial recovery plan as may be determined by an insurance rule made for the purposes
of this article if it considers that the interest of insureds, policyholders, creditors or other interested persons are likely
to be prejudiced owing to a deterioration in the financial position of the company;
(i) do such other act or require the doing of such other thing as it may deem appropriate in the circumstances,
and having proceeded in any one or more of the manners aforesaid, the competent authority may further proceed in any one or more of
such manners, whether in addition thereto or in substitution therefor.
(2) Where a person is appointed by the competent authority - (a) under subarticle (1)(b), it shall be the duty of the
company 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 subarticle (1)(c), the company shall deliver to such person all the assets of which he is placed in charge, and all the powers, functions
and duties of the company in respect of those assets, whether exercisable by the company in general meeting, or
by the directors, or by any other person, including the legal and judicial representation of the company, shall be exercisable
by and vest in the person appointed under the said paragraph to the exclusion of any other person;
(c) under subarticle (1)(d), the company shall submit its business to the control of such person and shall provide him with such facilities as he
may require the company 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 of the company, whether exercisable by the company in general meeting, or by the directors,
or by any other person, including the legal and judicial representation of the company in all matters, shall be exercisable by
and vest in him to the exclusion of any other person;
(d) under subarticle (1)(f), such person shall be the liquidator of the company for all purposes of law to the exclusion of any other person.
(3) In the case of a company whose head office is in a country outside Malta, the branches and offices in Malta of that company
shall, if the competent authority so directs and to the extent it so directs, be deemed to constitute a separate company.
(4) The competent authority may, where it feels is in the best interest of the public so to do, make or issue public statements
or notices giving warnings or information about any of the following:
(a) the suspension, revocation or restriction of an authorisation;
(b) any action taken in terms of this article;
(c) the carrying out of business of insurance in an unsatisfactory manner and the persons carrying out such business;
(d) any other practice or matter which may be detrimental to the interest of insureds, policyholders, creditors or other interested
persons;
(e) the commission of an offence against this Act;
(f) the imposition by the competent authority of an administrative penalty.
(5) The competent authority may require the company
concerned to pay all the expenses of, and inciden t al to, the publication or issue of 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.
Power of the competent
authority to require
information.
Amended by:
XVII. 2002.253.
Cap. 9.
SUPERVISION OF AUTHORISED COMPANIES
(a) furnish to it, at such time and place and in such form as it may specify, such information and documentation as it may require
with respect to the business such company is authorised to carry on; or with respect to any person with whom the company
has close links within the meaning of article 8;
(b) furnish to it any information or documentation aforesaid verified in such manner as it may specify;
(c) attend before it, or before a person appointed by it, at such time and place as it may specify, to answer questions
and provide information and documentation with respect to any such business as aforesaid.
(2) The competent authority may take copies of any documents furnished or provided under this article or extracts from them.
(3) Where an authorised company required to provide information or documentation under this article does not have the
r el ev ant info rmatio n or documentatio n, i t shal l disclose to the competent authority wh ere, to the best of it s kn ow led
g e, th at information or documentation is, and the competent authority may require any person, whe ther indicat ed as aforesaid
or not, who appears to it to be in possession of that information or documen- tation, to provide it.
(4) A statement made and documentation provided in pursuance of 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.
(5) The provisions of this article shall not apply to information or documentation whic h is privileged in accordance with the
provisions of article 642 of the Criminal Code.
(6) The power to require the production of documentation under the provisions of this article shall be without prejudice
to any lien o r char g e claimed b y any p e rson in rel a t i on to such documentation.
(7) Where the competent authority has appointed a person under subart icle (1)( c ), su ch p e rson shall, for th e pu rposes of ca rryi ng o u t h i s fu nct i o n s un der h i s ap poi nt m e nt , h a ve all t
h e
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 of the competent authority.
30. (1) Without prejudice to the provisions of the Companies Act relating t o the investigation of com p anies, the comp etent authority may, whenever it deems it necessary or expedient, app o
int one or more inspect o rs to ex amin e t h e af f a irs o f an authorised company and to report thereon to it.
(2) An inspector appointed under subarticle (1) -
(a) shall have and may exercise all the powers conferred on the competent authority by article 29, and any requirement made
by him shall be deemed to be and have the same force and effect as a requirement of the competent authority;
(b) may, and if so directed by the competent authority shall, make interim reports and on the conclusion of his examination
shall make a final report to the said Authority.
(3) The competent authority may forward to the company concerned a copy of any report made by an inspector in respect of
its affairs.
(4) Where the affairs of an authorised company are under examination, it shall be the duty of all officers and agents
of the company to produce to an inspector all books and documents of or relating to the company and otherwise to give to an inspector
all a ssis t ance in connection with the exa m ination whic h the y a r e re asonably able to gi ve ; and if an of ficer or a n agent
of the company 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 of the com p any, an inspector shall refer the m a tter
to the competent authority and the competent authority shall thereupon enquire into the case and take appropriate action as it deems
necessary.
(5) An inspector shall also be given access to any accounts, retu rn s or ot her in fo rm atio n relat ing to an aut horised com
pany whose affairs are under examination which are in the possession or under the control of the competent authority.
(6) The competent authority shall have the power to order that all expenses of, and incidental to, an examination pursuant to this
article or such part thereof as it may deem appropriate, shall be paid by th e com p an y concerned; an d an y sum so du e shal
l b e recoverable by the competent authority in the same manner as an administrative penalty imposed under this Act.
(7) In this article, any reference to officers or to agents shall include a reference to past as well as present officers or agents
and the expression “agents”, in relation to an authorised company, shall include an insurance agent, insurance manager or tied
insurance i n termediary, regi st ered or enrol l ed under the Insurance I n termedi a ries Act , ac ting for the comp any, the bankers, the auditors and, in the case of a company authorised to carry on long
Power of the competent authority to examine the affairs of authorised companies. Amended by:
XII. 2006.95.
Cap. 386.
Cap. 487.
term business, the actuary of the company, a person acting as an intermediary for the company and a person as may be prescribed by regulations made for the purposes of article 18.
Right of entry to obtain information and documents. Cap. 386.
31. (1) Without prejudice to the provisions of the Companies Act, relati ng to the entry and search of prem ises, any officer, empl oyee or ag ent of the competent authori t y, on producing evidence
of 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 of obtaining there the inform ation or docum ent s required by that notice,
or otherwise for the purpose of the examination, and of exercising any of the powers conferred by the said articles.
(2) Where any officer, employee or agent of the competent authority has reasonable cause to believe that if such notice
as is referred to in subarticle (1) were served it would not be complied w i t h o r th at an y do cum e nt s to w h ich i t c oul
d rel a te wou l d be rem o ve d, ta m p ered wi th or dest roy e d , s u ch perso n m a y, o n producing evidence of his authority,
enter any premises referred to in subarticle (1) for the purpose of obtaining there any information o r d o cum e nts sp ecifi ed
i n t h e au thorit y, bei ng inform ati on or documents that could have been required under such notice as is referred to in subarticle
(1).
(3) For the purposes of any action taken under the provisions of this article, the competent authority may request the assistance
of the Commissioner of Police, who may for such purpose exercise such powers as are vested in him for the prevention of offences
and the enforcement of law and order:
Provided that where an entry as is mentioned in this article involves premises that are occupied for the purpose of habitation, such
entry shall be carried out in the presence of an officer of the Police of a rank not below that of inspector and shall moreover not
take place between nine in the evening and five in the morning.
Power to issue directives. Added by:
XII. 2006.96.
(2) The power to give directives under this article shall include the power to vary, alter, add to or withdraw any directive, as
well as the power to issue new or further directives.
(3) Where the competent authority is satisfied that the circumstances so warrant, it may at any time make public
any directive it has given under any of the provisions of this article.
Business statements. Amended by: XII. 2006.97.
busi n ess m a d e o u t in th e f o r m , m a nne r and con t en t a s th e competent authority may by an insurance rule made for
the purpose of this article determine; and the date by which such statement shall be forwarded shall also be established by that
rule.
(2) The statement required to be furnished under this article shall be verified in the manner required by the insurance rule.
(3) The competent authority may at any time direct an authorised company to forward to it such statement at such
interval and for such period as may be specified in the rule.
TRANSFER OF BUSINESS OF INSURANCE
(a) where the transferor is a company whose head office is in Malta, the performance by it of the obligations proposed to
be transferred constitutes the carrying on of business of insurance in or from Malta or in or from a country outside Malta; or
(b) where the transferor is a company whose head office is in a country outside Malta, the performance by it of the obligations proposed
to be transferred constitutes business of insurance in or from Malta,
the transferor shall apply to the competent authority for its approval of the scheme.
(2) The competent authority shall not determine an application made under subarticle (1) unless it is satisfied that -
(a) a notice approved by it for the purpose has been published -
(i) in at least two local daily newspapers of which one is published in the Maltese language and the other in the English language;
and the text of the notice shall be in Maltese in the Maltese daily and in English in the English daily;
(ii) where the transferor is a company which carries on business from Malta or in or from a country outside Malta and, as
regards any policy included in the proposed transfer which evidences a contract of insurance, the risk is a
risk situated outside Malta, in two daily newspapers in the country where the risk is situated;
(b) except in so far as the competent authority has otherwise directed, a copy of the notice has been sent by the transferor
to every policyholder affected by the
Transfer of general business.
Amended by:
XX. 2007.130.
scheme and every other person who claims an interest in a policy included in the proposed transfer and has given notice of his claim
to the transferor;
(c) copies of a statement setting out particulars of the transfer and approved for the purpose by the competent
authority have been available for inspection -
(i) at each of the branches, agencies and offices of the transferor in Malta;
(ii) where the transferor is a company which carries on business from Malta or in or from a country outside Malta and, as
regards any policy included in the proposed transfer which evidences a contract of insurance, the risk is
a risk situated outside Malta, at one or more places in the country where the risk is situated,
for a period of not less than thirty days beginning with a date to be determined by the competent authority.
(3) The notice referred to in subarticle (2) shall include a statement that written representations concerning the transfer
may be sent to the competent authority within a period to be specified by the competent authority; and the competent authority shall
not d e t e rm ine t h e appl icatio n un til after consid ering any representations made to it before the specified day.
(4) The competent authority shall not approve a transfer on an application made under subarticle (1) unless it is satisfied that
-
(a) | (i) | the transferee is, or immediately after the approval will be, authorised under article 7 to carry on general business of the class or classes or part classes to be transferred under the scheme; |
(ii) | the transferee is, or immediately after the approval will be, authorised under article 6 or article 23 of First Council Directive of 24 July 1973 on the co-ordination of laws, Regulations, and administrative provisions relating to the taking up and pursuit of direct insurance other than life assurance (73/239/EEC) to carry on general business of the class or classes or part classes to be transferred under the scheme in a Member State or EEA State; or | |
(iii) | if the transferee does not fall within sub- paragraphs (i) and (ii), the transferee has the authorisation required to enable the business, or part which is to be transferred, to be carried on in the place to which it is to be transferred, or will have it before the scheme takes effect; and | |
(b) | (i) | the transferee possesses, after taking the proposed transfer into account, the margin or margins of solvency required to be maintained |
(ii) | under this Act; the transferee possesses, after taking the | |
proposed transfer into account, the margin or margins of solvency required to be maintained under Articles 16a, 25 or 26 of the First Council Directive of 24 July 1973 on the co-ordination of laws, Regulations, and administrative provisions relating to the taking up and pursuit of direct insurance other than life assurance (73/239/ EEC); or | ||
(iii) | if the transferee does not fall within sub- paragraphs (i) and (ii), the transferee possesses, or will possess before the scheme takes effect, the margin or margins of solvency required under the law applicable in the place to which the business is being transferred; and | |
(c) | (i) | if the transferee is a company authorised under this Act, the transferee’s financial resources are, consequential to the transfer, adequate to fulfil the other obligations required of it by, or under, this Act; or |
(ii) | if the transferee is a company whose head office is in a country outside Malta, the transferee’s financial resources are, consequential to the transfer, adequate to fulfil the other obligations required of it by, or under, the law applicable in the place to which the business is being transferred; and |
(d) if the transferor is a company whose head office is in
Malta, and the establishment from which the policies
are to be transferred is situated in a Member State or
EEA State -
(i) the overseas regulatory authority in that Member State or EEA State has been consulted about the proposed transfer; and
(ii) the overseas regulatory authority has either responded or the period of three months beginning with the
consultation has elapsed;
(e) if the transferor is a company which carries on business from Malta or in or from a country outside Malta and, as
regards any policy included in the proposed transfer which evidences a contract of insurance, the risk is a risk
situated outside Malta -
(i) the overseas regulatory authority in the country where the risk is situated has been notified of the proposed transfer; and
(ii) either the overseas regulatory authority has consented to the transfer or the overseas regulatory authority
has not refused its consent to the transfer within the period of three months beginning with the date of the notification.
Effect of approval under article 33.
(5) On determining an application made under subarticle (1), the competent authority shall -
(a) publish a notice of its decision in the Gazette and in such other manner as it may think fit; and
(b) send a copy of that notice to the transferor, the transferee and every person who made representations in accordance
with the notice referred to in subarticle (2),
and if it refuses the application it shall inform the transferor and the transferee in writing of the reasons for its refusal.
(a) to transfer to the transferee all the transferor ’s rights and obligations under the policies included in the transfer
scheme; and
(b) if the scheme so provides, to secure the continuation by or against the transferee of any legal proceedings by or against the
transferor which relate to those rights or obligations,
notwithstanding the absence of any agreements or consents which would otherwise be necessary for it to be effectual in law for those
purposes.
(2) Except in so far as the competent authority may otherwise direct, a policyholder whose policy is included in such a scheme
shall not be bound by the scheme unless he has been given written notice of its carrying out by the transferee.
Transfer of long term business. Amended by: XX. 2007.131.
(a) where the transferor company is a company whose head office is in Malta, the business proposed to be transferred is business
carried on in or from Malta or in or from a country outside Malta;
(b) where the transferor company is a company whose head office is in a country outside Malta, the business proposed to be
transferred is business carried on in or from Malta,
the transferor company or the transferee company shall, by application filed before the Financial Services Tribunal,
request approval of the scheme. Approval by the Tribunal shall be in accordance with the provisions of this article.
(2) The Tribunal shall not determine an application filed before it under subarticle (1) unless -
(a) the application is accompanied by a report on the
terms of the scheme by an independent actuary; and
(b) the Tribunal is satisfied that the requirements of subarticle (3) have been complied with.
(3) The requirements referred to in subarticle (2)(b) are -
(a) a notice stating that the application has been made and giving the addresses of the branches, agencies and offices at which,
and the period for which, copies of the documents mentioned in paragraph (d) will be available as required by that paragraph has been published -
(i) in at least two local daily newspapers of which one is published in the Maltese language and the other in the English language;
and the text of the notice shall be in Maltese in the Maltese daily and in English in the English daily;
(ii) where the transferor company is a company which carries on business from Malta or in or from a country outside Malta
and, as regards any policy included in the proposed transfer which evidences a contract of insurance, a country outside Malta
is the country of the commitment, in two daily newspapers in that country;
(b) except in so far as the Tribunal has otherwise directed, a statement -
(i) setting out the terms of the scheme, and
(ii) containing a summary of the report mentioned in subarticle (2)(a) sufficient to indicate the opinion of the actuary on the likely effects of the scheme on the long term business policyholders
of the companies concerned,
has been sent to each of those policyholders and every other person who claims an interest in a policy included in the proposed
transfer and has given written notice of his claim to the transferor company;
(c) a copy of the application, of the report mentioned in subarticle (2)(a) and of any statement sent out under paragraph (b) of this subarticle has been served on the competent authority and that a period of not less than thirty days has elapsed since
the date of service; and
(d) copies of the application and of the report mentioned in subarticle (2)(a) have been open to inspection -
(i) at each of the branches, agencies and offices in
Malta of the companies concerned;
(ii) where the transferor company is -
(aa) a company whose head office is in Malta which carries on business from Malta or in or from a country outside Malta, or
(bb) a company whose head office is in a country outside Malta which carries on business
from Malta,
and, as regards any policy included in the proposed transfer which evidences a contract of insurance, a country outside
Malta is the country of the commitment, at such place in that country as the Tribunal has directed; for
a period of not less than thirty days beginning with a date to be determined by the Tribunal; and that copies of the report
have been made available for purchase from those offices and places during that period upon payment of such fee as may be fixed
by the Tribunal.
(4) On any application filed under subarticle (1) - (a) the competent authority; and
(b) any policyholder who alleges that he would be
adversely affected by the carrying out of the scheme,
shall be entitled to make written representations.
(5) Subject to subarticle (6), the Tribunal shall not approve a transfer on an application filed before it under subarticle (1)
unless it is satisfied that -
(a) | (i) | the transferee company is, or immediately after the approval will be, authorised under article 7 to carry on long term business of the class or classes to be transferred under the scheme; |
(ii) | the transferee company is, or immediately after the approval will be, authorised under article 4 or article 51 of Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance, to carry on long term business of the class or classes to be transferred under the scheme in a Member State or an EEA State; or | |
(iii) | if the transferee does not fall within sub- paragraphs (i) and (ii), the transferee has the authorisation required to enable the business, or part which is to be transferred, to be carried on in the place to which it is to be transferred or will have it before the scheme takes effect; and | |
(b) the transferee company produces evidence that - | ||
(i) | (aa) | after taking the transfer into account, it possesses the margin or margins of solvency required to be maintained under this Act; |
(bb) | after taking the transfer into account, it possesses the margin or margins of solvency required to be maintained under article 28, 55 or 56 of Directive 2002/83/ EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance; or |
(cc) if the transferee does not fall within indents (aa) and (bb), the transferee possesses, or will possess before the scheme takes effect, the margin or margins of solvency
required under the law applicable in the place to which the business is being transferred;
(ii) (aa) if the transferee company is authorised under this Act, its financial resources are, consequential to the transfer, adequate
to fulfil the other obligations required of it by, or under, this Act; or
(bb) if the transferee is a company whose head office is in a country outside Malta, the transferee’s financial resources
are, consequential to the transfer, adequate to fulfil the other obligations required of it by, or under, the law applicable
in the place to which the business is being transferred;
(c) if the transferor is a company whose head office is in Malta, and the establishment from which the policies are to be transferred
is situated in a Member State or EEA State -
(i) the overseas regulatory authority in that Member State or EEA State has been consulted about the proposed transfer; and
(ii) the overseas regulatory authority has either responded or the period of three months beginning with the
consultation has elapsed.
(6) Where the transferor company is a company which carries on business from Malta or in or from a country outside Malta and, as
re gards any policy included in the proposed transfer which evidences a contract of insurance, a country outside Malta is the coun
try of the commitment, the Tr ibunal shall no t approve the transfer unless the competent authority certifies -
(a) that the overseas regulatory authority in that country has been notified; and
(b) either that the authority has consented to the scheme or that the authority has not refused its consent to the scheme within
the period of three months beginning with the date of the notification.
(7) Where a scheme is approved by the Tribunal under this article the transferee company shall, within ten days from the
date on which the approval is made or such longer period as the competent authority may allow, deposit two office copies of the approval
with the competent authority.
Provisions supplementary to article 35.
Exemption under this Part. Amended by: XVII. 2002.254. Deleted by:
XII. 2009.98. Added by:
XX. 2007.132.
e v ide n cing the conse n t of the po licyholder and of ev ery ot h e r person who claims an interest in a policy included in the proposed transfer and notwithstanding any opposition by the policyholder and every other person who claims an interest in a policy included in the proposed transfer. The Tribunal may make provision for such i n c i d e nt al, co nseq ue nt ial a n d su pp lem e n t a r y m a t t e r s as are necessary to secure that the scheme shall be fully and effectively carried out; and, where such be the case, for the continuation by or against the transferee company of any legal proceedings pending by or against the transferor company which relate to the scheme.
(2) Where a company authorised under this Act carrying on business restricted to reinsurance ("the transferor") proposes to transfer all or part of its business, the competent authority shall not approve a transfer unless it is satisfied that:
(a) | (i) | the transferee is, or immediately after the approval will be, authorised under article 7 to carry on business of reinsurance; |
(ii) | the transferee is, or immediately after the approval will be, authorised under article 4 of Directive 2005/68/EC of the European |
Parliament and of the Council of 16 November
2005 on reinsurance and amending Council Directives 73/239/EEC, 92/49/EEC and Directives 98/78/EEC and 2002/83/EC, to carry
on in a Member State or an EEA State, business of reinsurance to be transferred under the scheme; or
subparagraphs (i) and (ii), the transferee satisfies
under, the law applicable in the place to which the business is being transferred;
(c) (i) if the transferee is a company authorised under this Act, the transferee’s financial resources are, consequential
to the transfer, adequate to fulfil the other obligations required of it by or under this Act;
(ii) if the transferee is a company whose head office is in a country outside Malta, the transferee’s financial resources
are, consequential to the transfer, adequate to fulfil (if any) the other obligations required of it by, or under, the
law applicable in the place to which the business is being transferred.
ACQUISITION AND DISPOSAL OF SHARES, WITHDRAWAL, DISSOLUTION AND WINDING UP
(a) acquire, directly or indirectly, a qualifying share- holding in an authorised company;
(b) increase, directly or indirectly, an existing shareholding which is not a qualifying shareholding so as to
cause it to become a qualifying shareholding in an authorised company; or
(c) further increase, directly or indirectly, such qualifying shareholding in an authorised company as a result of which the proportion
of the voting rights or of the capital held would reach or exceed twenty per centum, thirty per centum or fifty per centum
or so that the authorised company would become its subsidiary,
(hereinafter referred to as the "proposed acquisition"), shall notify the competent authority in writing of any such decision,
indicating the size of the intended shareholding and providing any relevant information as and in the manner that the competent authority
may by an insurance rule require, incl ud in g t he fo rm in which such notification shall be made and the criteria adopted by
the competent authority in determining whether such person is a fit and proper person.
(2) Notwithstanding anything contained in any other law, any person who has taken a decision either to -
(a) dispose, directly or indirectly, of a qualifying shareholding in an authorised company;
(b) reduce, directly or indirectly, a qualifying shareholding so as to cause it to cease to be a qualifying
shareholding; or
Participation in an authorised company. Amended by:
XVII. 2002.255; XIII. 2004.116;
XII. 2006.99; XX. 2007.133;
III. 2009.26. Substituted by: XVII. 2009.31.
Cap. 345.
(c) reduce, directly or indirectly, a qualifying shareholding so that the proportion of the voting rights or
of the capital held would fall below twenty per centum, thirty per centum or fifty per centum or so that the authorised
company would cease to be its subsidiary,
shall notify the competent authority in writing of any such decision indicating the size of the intended shareholding and providing
any relevant information as and in the ma nner that the c o mpetent authority may by an insurance rule require.
(3) Subarticles (1) and (2) shall apply irrespective of whether or not any of the relevant shares are shares listed on any regulated
market within the meaning of the Financial Markets Act or on an equivalent market in a non-Member State or non-EEA State.
(4) It shall be the duty of an authorised company and of the directors thereof, to notify the competent authority forthwith upon
becoming aware that any person decides to take any of the actions set out in subarticle (1) or (2).
(5) If any person or any authorised company takes or decides to take any action set out in subarticle (1) or (2) without notifying
the competent authority or obtaining its approval in terms of article
38A, then, without prejudice to any other penalty which may be im posed under thi s Act, the competent auth ority shall have the
power to make an order:
(a) restraining such person or authorised company from taking, or continuing with, such action;
(b) declaring such action to be void and of no effect;
(c) requiring such person or authorised company to take such steps as may be necessary to restore the position existing immediately
before the action was taken;
(d) restraining such person or authorised company from exercising any rights which such action would, if lawful, have conferred
upon them, including the right to receive any payment or to exercise any voting rights attaching to the shares acquired;
(e) restraining such person or authorised company from taking any similar action or any other action within the categories set out
in subarticles (1) and (2).
(6) Without prejudice to any other provision of this Act, where the influence exercised by any person acquiring or proposing to
acquire a qualifying shareholding is, or is likely to, operate against the sound and prudent management of an authorised company,
the competent authority may exercise any of its powers under this Act to put an end to such s i tuati on, inclu d in g t h e po wer
t o i s su e directives as it may deem reasonable in the circumstances.
(7) In the case of a company whose head office is in a country outside Malta authorised under this Act to carry on in or from
Malta the business of insurance, the provisions of this article shall apply to the extent only of requiring such company to give
to the
occurrence, as the case may be, the information therein referred to.
(8) The competent authority, may, by means of an insurance rule issued under this Act, indicate the circumstances when persons
are to be regarded as "acting in concert".
(2) The competent authority shall have a maximum of sixty working days as from the date of the written acknowledgement of r
e ceipt of th e not ifi c ati on requi red u nder art i cle 38 (1) and al l documents required by the competent authority to be attached
to such notification (hereinaft er re ferred to in t h is Act as the "assessment period") to carry out an assessment on
the basis of such information as may be determined by an insurance rule issued for this purpose.
(3) The competent authority shall inform the proposed acquirer of the date of the expiry of the assessment period at the time
of acknowledging receipt.
(4) The competent authority may, during the assessment period, if necessary and no later than on the fiftieth working day of such
period, requ est any furt her info rm ation th at is necessary to complete the assessment. Such a request shall be made in writing
and shall specify the additional information needed.
(5) During the period between the date of request for additional informa t ion by the competent au th orit y and the recei p t
of a response thereto by the proposed acquirer, the assessment period s h all be interrupted. The inte rruption period shall not
exceed twenty working days. Any furthe r requests by the competent authority for completion or clarification of the information shall
be at its discretion but shall not resu lt in an interruption of such period.
(6) The competent authority may extend the interruption period refer r ed to in su bart icle (5) up to thi r ty wo rki ng d a ys
if th e proposed acquirer is:
(a) situated or regulated in a non-Member State or non- EEA state; or
(b) a person not subject to supervision under:
(i) Council Directive 85/611/EEC of 20 December
1985 on the co-ordination of laws, regulations and administrative provisions relating to undertakings for collective
investment in
transferable securities (UCITS);
(ii) Council Directive 92/49/EEC of 18 June 1992 on the co-ordination of laws, regulations and administrative provisions relating to direct insurance
other than life assurance and
Assessment procedure. Added by: XVII. 2009.32.
EEC (third non-life insurance Directive);
(iii) Directive 2002/83/EC of the European
Parliament and of the Council of 5 November
2002 concerning life assurance;
(iv) Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments amending Council
Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC;
(v) Directive 2005/68/EC of the European Parlia- ment and Council of the 16 November 2005 on reinsurance and amending Council Directives
73/239/EEC, 92/49/EEC as well as Directives
98/78/EC and 2002/83/EC; or
(vi) Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business
of credit institutions (recast).
(7) The competent authority shall, upon completion of the assessment referred to in subarticle (2) and not later than the
date of the expiry of the assessment period, issue a notice:
(a) granting unconditional approval to the proposed acquisition;
(b) granting approval to the proposed acquisition subject to such conditions as the competent authority may deem appropriate;
or
(c) refusing the proposed acquisition.
(8) In making the assessment referred to in subarticle (2), the competent authority shall neither impose any prior conditions in
respect of th e level of sh ar eh ol di ng th at m u st be acqu i r e d n o r examine the proposed acquisition in terms of the economic
needs of the market.
(9) The competent authority may refuse the proposed acquisition only if there are reasonable grounds for doing
so on the basi s of the criteria set out in the insurance rul e referred to in art i cl e 38(1) or if the inform at ion provided
by the prop osed acquirer is incomplete.
(10) If the competent authority decides to refuse the proposed acquisition, it shall, within two working days, and not exceeding
t he assessm en t p erio d, inform th e proposed acquirer i n w rit ing specifying the reasons for such decision. The competent authority
may, whether at the request of such proposed acquirer or not, issue a public statement indicating such reasons.
(11) If the competent authority does not refuse the proposed acquisition in writing within the assessment period, such proposed
acquisition shall be deemed to be approved.
(12) Without prejudice to any other penalty which may be im posed under this Act, wh ere a quali fying shareholding in an
authorised company is acquired notwithstanding the refusal of the competent authority, the exercise of the corresponding voting rights
shall be suspended and any of the votes cast in contravention of this article shall be null and void.
(13) The competent authority may fix a maximum period for co ncludin g the p r oposed acqui si tion an d extend it wh ere appropriate.
(14) Notwithstanding the provisions of subarticles (1) to (6), wh ere two or more proposals to acquire or increase qualifying
shareholdings in the same authorised company have been notified to the competent auth ori t y, t h e latt er shall treat th e prop
osed acquirers in a non-discriminatory manner.
(a) a credit institution, assurance undertaking, insurance undertaking, reinsurance undertaking, investment firm or UCITS management
company authorised in another Member State or EEA State or in a sector other than that in which the acquisition is proposed;
(b) the parent undertaking of a credit institution, assurance undertaking, insurance undertaking, reinsurance undertaking,
investment firm or UCITS management company authorised in another Member State or EEA State or in a sector other than that
in which the acquisition is proposed; or
(c) a person controlling a credit institution, assurance undertaking, insurance undertaking, reinsurance undertaking,
investment firm or UCITS management company authorised in another Member State or EEA State or in a sector other than that
in which the acquisition is proposed.
(2) The competent authority shall, without undue delay, p r ovi de any i n formati on which is essenti a l or r e l
e vant for the assessment referred to in article 38A(2) to the overseas regulatory authority requesting such information. Upon request,
the competent authority shall communicate to the overseas regulatory authority all relevant information and shall communicate on
its own initiative all essential information. A decision by the competent authority in terms of ar ticle 38A shall indi cate any
views or reserv ati ons expressed by the overseas regulatory authority responsible for the proposed acquirer.
Co-operation with overseas regulatory authorities in the case of acquisitions. Added by:
XXVII. 2009.33.
reconstructions, divisions and changes in share capital or voting rights.
Added by: XXVII. 2009.34.
and without prejudice to article 38(1) and (2), the consent of the competent authority given in writing shall be required before
an authorised company may lawfully:
(a) merge with any other company, whether authorised under this Act or not;
(b) undergo any reconstruction or division; or
(c) increase or reduce its nominal or issued share capital or effect any material change in voting rights.
(2) It shall be the duty of all directors and qualifying shareholders of an authorised company to notif y the
competent au th ori t y fort hw ith in w r iti ng up on becomi ng aw ar e th at such company intends to take any of the actions set
out in subarticle (1).
(3) Within three months of receipt of such notification or receipt of su ch information as the competent au thority may
lawfully require, whichever is the later, the competent authority shall issue a notice -
(a) granting unconditional consent to the taking of the action;
(b) granting consent to the taking of the action subject to such conditions as the competent authority may deem appropriate; or
(c) refusing consent to the taking of the action,
and if it refuses to grant consent it shall inform the person or the authorised company co ncerne d i n writ in g of th e reaso n
fo r it s refusal.
(4) If any person or any authorised company takes or decides to tak e any act i on set out i n subarticl e (1) witho u t obt ain
i ng th e consent of the competent authority, then, without prejudice to any other penalty which may be imposed under this Act, the
competent authority shall have the power to make an order:
(a) restraining such person or authorised company from taking or continuing with such action;
(b) declaring such action to be void and of no effect;
(c) requiring such person or authorised company to take such steps as may be necessary to restore the position existing immediately
before the action was taken;
(d) restraining such person or authorised company from exercising any rights which such action would, if lawful, have conferred
upon them, including the right to receive any payment or to exercise any voting rights attaching to the shares acquired;
(e) restraining such person or authorised company from taking any similar action or any other action within the categories set out
in subarticle(1).
(2) Where an authorised company gives notice to the competent authority under subarticle (1), the competent authority
-
(a) shall require the company to -
(i) give publicity to the matter, amongst its policyholders and in the press in the form and manner as may be determined
by an insurance rule made for the purpose of this article;
(ii) discharge all its liabilities to its policyholders and creditors in a manner acceptable to the competent authority;
(iii) appoint a person which shall service or, as the case may be, run-off such business; and
(b) may require the company to -
(i) ascertain that its technical provisions are covered by equivalent and matching assets;
(ii) ascertain that such assets are of the categories determined by any applicable insurance rule.
(3) The competent authority shall, not later than thirty days before the proposed date on which a company as aforesaid intends
to cease to carry on the business it is authorised to carry on, issue a permit to the company concerned -
(a) authorising it to cease to carry on such business and to service or run-off that business, as from a specified date;
(b) specifying the conditions under which such service or run-off shall be carried out; and
(c) authorising a person to carry out such service or run- off.
Companies ceasing to carry on business.
Amended by: XVII. 2002.256; XII. 2006.100.
(a) in the case of long term business, service or cause the person named in the permit to service on its behalf;
(b) in the case of general business run-off or cause the person named in the permit to run-off on its behalf,
contracts of insurance effected and carried out by it before the specified date.
Companies carrying out servicing or run-off of business of insurance.
winding up of authorised companies Amended by: XVII. 2002.257; XIII. 2004.117; XX. 2007.134.
42 an d su bject to the followin g provisions of this arti cle, any company authorised to carry on the business of insurance shall
-
(a) in the case of a company whose head office is in Malta, dissolve and consequentially wind up under and in accordance
with regulations made under this article; and
(b) in the case of a company whose head office is in a country outside Malta, dissolve and wind up under and in accordance with the
provisions of the laws of the country where the head office of such company is situated governing the dissolution and winding
up of such companies.
(2) Where it appears to the competent authority that an authorised company is, for any reason whatever, likely to dissolve
and wind up, or has given notice of dissolving and winding up, or is being dissolved and wound up, the competent authority shall
-
(a) in the case of a company whose head office is in Malta, prohibit the free disposal of the assets of the company whether
such assets are situated in Malta or in country outside Malta; and
(b) in the case of a company whose head office is in a country outside Malta, prohibit the free disposal of the assets of the company
situated in Malta or in any other country if such assets relate to the company’s business in Malta,
if such prohibition has not been imposed on the company by virtue of or under any other provision of this Act.
(3) Notwithstanding the provisions of any other law, the assets of a company which are prohibited under subarticle (2) or by virtue
of or under any other provision of this Act to be freely disposed of shall be available only for meeting the liabilities of the company
attributable to its business of insurance:
Provided that debts and other liabilities arising out of contracts of insurance attributable to its business of insurance
shall rank before any other claim against such assets.
(4) Where the value of the assets mentioned in subarticle (3) exceeds the amount of the liabilities mentioned in that subarticle
the restriction imposed by that subarticle shall not apply to so much of those assets as represents the excess.
(5) In so far as the provisions of this article are inconsistent with the provisions of any other law, the provisions of this article
shall prevail, and the provisions of any other law shall, to the extent of the inconsistency, not apply to such companies.
(6) The Minister may, after consultation with the competent au th orit y, m ak e regu lat io ns i n resp ect of t he wi nd
ing -u p or re- organisation of companies whose head office is in Malta, including their branches, if any, and of branches of companies
whose head office is outside of Malta, and different provisions may be made for
Malta’s international commitments in this regard. Such regulations may provide for the implementation of detailed re-organisation
measures and procedures, incl uding the following m atters: the pub licat ion an d sub mi ssion of i nfo rm ati on in such lang uage
or languages and in such newspapers or other publications as may be pr escr ib ed, th e su bm issi on o f in fo r mat io n to c red
it or s, an d th e manner and procedure thereof, the notification to creditors and the pro cedure for th e subm issio n o f cl aim
s or represen tati ons, measures for the protection of the rights of creditors and other third parties, including set-off arrangements;
consultation between the competent authority and any other regulatory, administrative or judicial authorities in Malta and outside
Malta with competence over the winding-up or re-organisation of such companies or of branches t h ereof; th e publ ication of decisions
relating to such winding-up or re-organisation procedures; the establishment of rules governing the applicability of the proper or
applicable law and other issues of conflict of laws.
(2) Without prejudice to the provisions contained in article 41, in the event of a company as aforesaid being dissolved and wound up -
Dissolution and winding up of authorised companies with long term business.
(a) the assets representing the technical provisions maintained by the company in respect of its long term business shall
be available only for meeting the liabilities of the company attributable to that business;
(b) the other assets of the company shall be available only for meeting the liabilities of the company attributable to its other
business.
(3) Where the value of the assets mentioned in either subarticle (2)(a) or (2)(b) exceeds the amount of the liabilities mentioned in either paragraph the restriction imposed by that subarticle shall not apply to
so much of those assets as represents the excess.
CONDUCT OF BUSINESS OF INSURANCE
the competent authority of any material changes in the documentation provided or required to be provided by or under this Act
and any regulations made thereunder, or any insurance rule, as
soon as the holder becomes aware of such changes.
(2) Without prejudice to article 38, a company whose head office is in Malta authorised under this Act shall -
(a) before making any addition or alteration to the memorandum or articles of association or other
Changes in documentation or information. Amended by: XVII. 2002.258; XII. 2006.101; XVII. 2009.35.
to the competent authority particulars of the proposed addition or alteration for its prior consent; and no such addition or alteration
shall be made or shall be registered, or shall take effect, whether it is registered or not, unless and until the competent
authority has signified its consent in writing; and
(b) at least once a year, inform the competent authority of the names of the persons holding a qualifying shareholding
in the company and the percentage of such holding; and the competent authority may, by an insurance rule made for the purposes
of this article, determine the form, manner and content of the information to be forwarded to it and the date
by which such information shall be forwarded shall also be established by that rule.
(3) Without prejudice to the foregoing provisions of this article, an authorised company shall notify the competent authority
on a continuous basis, with any change or circumstances which may give rise to the existence of close links within the meaning of
article 8.
Statutory notice by authorised companies in relation to long term policy. Amended by:
XIII. 2006. 102
(a) has served on the other party to the contract by means as may be prescribed a statutory notice in relation to that contract;
or
(b) does so at the time when the contract is entered into.
(2) Regulations under this article may be made with respect to any matter related to a statutory notice; and the regulations may
ex emp t from an y r e q u ire m e n t c ont rac t s as may th er ei n b e prescribed.
(3) For the purposes of this article a statutory notice is a notice which -
(a) contains such matters (and no others) and is in such form as may be prescribed and complies with such requirements as may
be prescribed for securing that the notice is easily intelligible; and
(b) has annexed to it a form of notice of cancellation of a description as may be prescribed for serving by means as may be prescribed
a notice of cancellation on the authorised company.
Linked long term policies.
(a) are entered into by a company whose head office is in
business; and
(b) are contracts under which the benefits payable to the policyholder are wholly or partly to be determined by reference to the
value of, or the income from, property of any description (whether or not specified in the contract) or by reference to
fluctuations in, or in an index of, the value of property of any description (whether or not so specified).
46. No contract of insurance shall be held void or voidable by an insurer by reason only that, at the time the contract is entered into,
there is a breach of any provision of this Act or of the Insurance Intermediaries Act, (in this article referred to as "the Act") and of any regulations made under this Act or under the Act or of any insurance
rule issued in virtue of this Act or any insurance intermediaries rule issued in virtue of the Act.
(2) In the absence of any such insurance rule, the contract shall be expressed in the English language.
(3) The provisions of this article shall not apply to a company whose business in or from Malta is restricted to reinsurance.
Contracts of insurance not voidable by insurer notwithstanding a breach of this Act or of the Insurance Intermediaries Act. Substituted by:
XII. 2006.103.
Cap. 487.
Contracts to be expressed in a specified language. Amended by:
XVII. 2002.259; XII. 2006.104.
Provided that, in the case of a company whose head office is in Malta, the provisions of this subarticle shall also apply with respect
to -
(a) an advertisement issued or caused to be issued; and
(b) a promotional activity as aforesaid carried out or caused to be carried out,
from Malta or in or from a country outside Malta.
(2) The competent authority may by an insurance rule made for t h e pur poses of t h is arti cle d e t e rmi n e the form and content
of insurance advertisements and make different provision in relation to insurance advertisements of different classes or part classes
or descriptions; and the manner in which any promotional activity as aforesaid shall be carried out or caused to be carried out.
Insurance advertisements. Amended by: XVII. 2002.259; XII. 2006.105.
(3) The provisions of subarticle (2) shall not apply to a company if its business is restricted to reinsurance.
(4) Where a company issues or causes to be issued an ad ve rt is e m en t o r c a rri es out o r causes to be c a
rried out any promotional activity which is in breach of or does not comply with any of the provisions of subarticle (1) or (2),
the competent authority may issue an order directing the company -
(a) to withdraw, wholly or partly, the advertisement or promotional activity; or
(b) to amend any particular of the advertisement or promotional activity; or
(c) to do such other thing as it deems appropriate in the circumstances.
(5) If a company refuses or fails to comply with any order issued by the competent authority under subarticle (4) or refuses
or fails to comply with such order within the time specified therein, without prejudice to any penalty which the company may incur
under this Act, the competent authority shall have the power to enforce, at the expense of the company concerned, the order issued
by it under that subarticle.
Provisions relating to Lloyd’s.
Added by:
XII. 2006.106.
(a) "Lloyd’s" means the society and corporation incorporated by Lloyd’s Act, 1871, of the United
Kingdom, and regulated by or under Lloyd’s Acts,
1871 to 1982, of the United Kingdom or any other law from time to time amending or re-enacting the same;
(b) "syndicate" means a member or group of members of Lloyd’s underwriting business of insurance at Lloyd’s through
the agency of a managing agent to which a particular syndicate number is assigned by or under the authority of the Council of Lloyd’s.
(2) Lloyd’s shall at all times have a representative in Malta who shall be resident in Malta and who shall be the representative
in Malta of Lloyd’s and of each of its members. The representative shall be designated by a letter addressed to the competent authority
by the chairman of Lloyd’s.
(3) The representative shall for the purposes of this Act be authorised to act generally as judicial representative of,
and accept service of any document on behalf of, Lloyd’s and of each of its members and to file any judicial acts in the registry
of any court or similar auth ority in Malta on behalf of Lloyd’s or any of its members. The general representative shall not be
personally liable for the debts and obligations of Lloyd’s or any of its members.
(4) It shall be sufficient in any judicial act (other than an application for the issue of any precautionary or executive
warrant) filed by or against members of Lloyd’s in connection with a policy underwritten by them to file th e act in th e name
of the Lloy d’s representative in Malta as re presentative of those members; provided the act contains a statem ent that it is
being filed in connection with a policy of insurance underwritten by members of Lloyd’s and giving particulars of the number reference
and date of the poli c y in respect of which th e act i s filed, the identi fying number of each of the syndicates subscribing thereto
and, where known, the nam es of the mem bers of Lloyd’s com prising those syndi cates. This subarticle shall apply notwit h standing
any provision to the contrary contained in the Code of Organization and Civil Procedure.
(5) The Lloyd’s representative shall within forty-five days after the filing by him of the judicial act, or of its service on
him, as the case may be, file a note in the records of the judicial act filed as aforesaid containing a list of the names of the
members comprising the syndicates subscribing to the policy and any such note shall be deemed to be an integral part of the judgment
or decree emanating from the court subsequent to the judicial act and such judgment or decree shall be binding on the members whose
names are listed in the note in the same manner as it would so have bound them if they has been named as parties to the said judicial
act:
Provided that, the Lloyd’s representatives shall not be bound to file any such note following the filing of any judicial
act where particulars of the nam e s of the members of Lloyd’s comprising those syndicates are already contained in the act
or where any such note has already been filed in the records of the case.
Cap. 12.
(a) enrolled under the Insurance Intermediaries Act; or
(b) registered with a supervisory authority of a European insurance undertaking in a Member State or an EEA State.
PROTECTION AND COMPENSATION FUND
(a) for the payment of any claims in respect of risks and of commitments as may be prescribed against a company authorised to carry
on business of insurance in Malta, remaining unpaid by reason of the insolvency of such company, subject to such limitations, restrictions
and exclusions as may be prescribed; and
(b) for the payment of compensation to victims of road traffic accidents as may be prescribed subject to such
"Appointment of insurance intermediaries. Added by:
XII. 2006.107.
Cap. 487.
Establishment of the Protection and Compensation Fund.
Amended by: XVII. 2002.260;
XII. 2006.108.
limitations and restrictions as may be prescribed.
Contributions to the Fund. Amended by: XII. 2006.109.
(2) All companies authorised under this Act to carry on business of insurance in Malta shall contribute to the Fund in such amounts and to such limitations as shall be prescribed and different amounts and limitations may be prescribed with respect to different kinds of business of insurance or different classes or part classes thereof, or different kinds of authorised companies, or in view of other different circumstances.
Management of the
Fund.
Provided that such regulations shall ensure that payments made into the Fund by companies authorised to carry on long term business
shall be utilised for compensation with respect to long term business and shall be t r eat e d separat e ly and uti lised exclusively
for compensation with respect to long term business, and payments made into the Fund by companies authorised to carry on general
business shall also be treated separately and shall be utilised exclusively for compensa ti on wit h respect to g e neral business:
Provided further that no payment shall be made from the Fund to any person who is a shareholder in the insolvent company and holds
twenty per centum or more of the issued shares of such company.
Prescription in respect of claims for payment out of the Fund.
(a) as respects a claim under article 49(a), within two years from the date the name of the company is struck off the register or such company is otherwise
definitely wound up;
(b) as respects a claim under paragraph (b) of that article, within two years from the date of occurrence of the accident relating to that claim.
Exemptions from income tax. Substituted by: XVII. 2002.261.
Power to issue regulations under this Part of the Act. Amended by:
XVII. 2002.262. Substituted by:
XII. 2006.110.
GENERAL PROVISIONS
(a) the power to impose, revoke or vary conditions on the grant of an authorisation pursuant to the provisions of article 7(6);
(b) the power to revoke or suspend an authorisation under article 26;
(c) the power to take any action under article 28, in lieu of or in addition to any suspension or revocation of an authorisation;
(d) the power to require information and documentation under article 29;
(e) the power to appoint inspectors under article 30;
(f) the power of entry to obtain information and documentation under article 31; and
(g) the power to communicate to the overseas regulatory authority information in its possession, whether such information is the
result of any of the above powers or otherwise.
(2) The competent authority shall exercise powers by virtue of this article:
(a) where the assistance is requested by the overseas regulatory authority for the purposes of the exercise of one or more
of its regulatory functions; or
(b) where so required within the terms of Malta’s international commitments; or
(c) where so required within the terms of undertakings assumed in bilateral or multilateral agreements for the exchange
of information and other forms of collaboration with overseas regulatory authorities including a request
under a memorandum of understanding concluded with the competent authority.
(3) There shall be meetings between an authorised company, its ap prov ed audito rs, an d, i n the case of a compan y authorised
to carry on l ong t e r m bu sin e ss, i t s ap pro v ed actu ary an d t h e comp et en t aut hori t y on a bil a t e ral or a multi
lateral b a sis as circumstances may warrant. Such meetings may be called by any of the parties, and shall in each case be chaired
by the competent authority.
Co-operation in supervisory duties and sharing of information. Substituted by: XVII. 2002.263.
(a) an auditor or an actuary of a company; or
(b) a person appointed to make a report under article
Communication by auditors, etc., with the competent authority.
30(1),
may be subject, shall be regarded as contravened by reason of his communicating in good faith to the competent authority, whether
or not in response to a request made by it, any information or opinion on a matter to which this article applies and which is relevant
to any function of the competent authority under this Act.
(2) In relation to an auditor or an actuary of an authorised company, this article applies to any matter falling within
article 24.
(3) In relation to a person appointed to make a report under article 30(1), this article applies to any matter of which he becomes
aware in his capacity as the person making the report which relates to the business or affairs of the company in relation to which
his report is made.
(4) If it appears to the competent authority that any accountants or class of accountants who are persons to whom subarticle (1)
applies are not subject to satisf acto ry ru les m ade o r g uid elin es issued by a professional body specifying circumstances in
which ma tters are to be communicated to the competent authority a s mentioned in that subarticle, the competent authority may, after
consultation with such bodies as appear to the competent authority to represent the interests of accountants and authorised companies,
m a ke rules for the purposes of this ar ticle, applying to those accountants and specifying such circumstances; and it shall be
the duty of an accountant to whom the rules apply to communicate a matter to the competent authority in the circumstances specified
by the rules.
The Financial Services Tribunal. Amended by:
XVII. 2002.264.
Cap. 330.
Cap. 330.
57. (1) For the purpose of this Act, the term "Financial Services Tribunal" means the tribunal referred to in article
21 of the Malta Financial Services Authority Act, and the term "Tribunal" shall be construed accordingly:
Provided that for the purpose of proceedings arising under this Act the members appointed under article 21(4) of the Malta Financial Services Authority Act, shall be substituted by persons to be appoi nted by th e Mi nist er unde r t h is Act and who, in hi s opinion, po ssess the necessary
expe rtise and experience in the business of insurance; and the provisions of article 21(5) to (7) of the said Act shall apply to
the persons appointed pursuant to this proviso in the same manner and to the same extent as they apply to the members mentioned in
article 21(2) of the said Act.
(2) The Financial Services Tribunal shall, in addition to the fun c t i on s and po wers assign ed to it u nder art i cle 5 8
, h a v e th e function and power to decide applications for transfer of long term business filed before it under this Act.
(3) Upon determining an application for transfer of long term business, the Tribunal shall have the power to order the payment
of costs and expenses by any party to the application.
Cap. 330. (4) The provisions of article 21 of the Malta Financial Services Authority Act and of any regulations made thereunder shall, except in so far as any of them is incompatible with the provisions of this
article or of article 35 or 58, apply to applications for transfer of long term business and a ppeals made to th e Financial Services
Tribunal under this Act:
Provided that regulations made under subarticle (13) of the said article 21 may distinguish between procedures made for the purposes
of the provisions of this Act and procedures made for the pu rp o s es o f t h e pr ov i s i o n s of t h e Malta Financial Services
Authority Act.
(5) The Minister may, for the purposes of this article, subject to article 35, m a ke regulations governing the p r o cedure for
determining an application for transfer of long term business filed under that article, provided that in the absence of such regulations
the Tribunal shall regulate its own procedure.
Cap. 330.
(a) to refuse to issue an authorisation under articles 7 or
21;
(b) to impose any condition in an authorisation issued or held under articles 7 or 21;
(c) to suspend or revoke an authorisation under article 26, or under any regulation made under this Act;
(d) to refuse an application for transfer of general business under article 33;
(e) to issue any notice or make any order under articles
38, 38A and 38C;
(f) to impose an administrative penalty in respect of infringements as may be prescribed under article 67,
may appeal against the decision to the Financial Services Tribunal which shall have exclusive competence to hear appeals on
the matters listed in this subarticle.
(2) An appeal under this article shall lie only on any of the following grounds -
(a) that the competent authority has wrongly applied any of the provisions of this Act; or
(b) that the decision of the competent authority constitutes an abuse of discretion or is manifestly unfair, provided that the discretion
of the competent authority may not, so long as it has been exercised properly, be queried by the Tribunal.
(3) An appeal made under this article shall not suspend the operation of any decision from which the appeal is made:
Provided that, a decision to revoke an authorisation shall not become operat i ve u n til the expiration of the perio d wi thin which
an appeal may be made under this article and, if an appeal is made within such period, the decision shall become operative on the
date of the decision of the Tribunal dismissing the appeal or the date on which the appeal is abandoned.
Appeals. Amended by: XIII. 2004.118; XVII. 2009.36; X. 2011.77.
Confidentiality. Amended by: XVII. 2002.265; XII. 2006.111; XX. 2007.135; X. 2011.78.
(a) for the purpose of ensuring compliance with any of the provisions of this or of any other Act; or
(b) where the policyholder ’s risk is large within the terms of the large risks regulations to be prescribed under article 64
and it believes that such a risk can be a threat to that company or to the insurance sector in general.
(2) Information obtained by the competent authority or by its officers, employees or agents, as well as by inspectors, auditors
and experts engaged by the competent authority for the purposes of, or pursuant to, any of the provisions of this Act, or of any
regulations made thereunder, or of any insurance rule, or in the discharge of any functions under any of the said provisions, shall
be treated as confidential and protected by the duty of professional secrecy, and shall not be disclosed to any other person, except
in the following cases:
Cap. 345.
(a) where the information is disclosed with a view to the institution of, or otherwise for the purposes of, criminal
proceedings or of any proceedings by the competent authority before any court under this Act;
(b) where the information is disclosed with a view to enabling or assisting the competent authority in the performance
or discharge of any of its functions under this Act;
(c) where the information has been made available to the public by virtue of being disclosed in any circumstances
in which, or for any purpose for which, disclosure is not precluded by this article;
(d) where a summary or collection of information is prepared or supplied in such a way as not to enable the identity of any
person to whom the information relates to be ascertained;
(e) where the information is disclosed to an auditor where such disclosure would assist the auditor in the exercise of his functions
under articles 21 and 24;
(f) where the information is disclosed to an actuary where such disclosure would assist the actuary in the exercise of his functions
under article 23;
(g) where the information is provided to the Central Bank of Malta or to the Listing Authority under the Financial Markets Act in the exercise of their respective functions in terms of law;
(h) where the information is provided to such other local or overseas regulatory, judicial or enforcement authorities
where such disclosure is required or
requested for the pursuance of serious regulatory concerns or the detection, prevention or prosecution of criminal offences;
(i) where the information is disclosed in civil or commercial proceedings in relation to the bankruptcy or compulsory
winding up of an authorised company provided such information does not concern third parties involved in attempts to rescue
such company, and to such overseas bodies responsible for the liquidation and bankruptcy of a person holding
an authorisation or an equivalent licence from an overseas regulatory authority.
(3) Subject to the provisions of article 55, information obtained from an overseas regulatory authority may only be disclosed
to another person, to another overseas regulatory authority or to any other third party with the prior approval of the authority
which had provided the information.
(4) No person, including past and present officers or agents of an authorised company, shall disclose any information relating
to the affairs of a company or of a policyholder of a company which he has acquired in the performance of his duties or the exercise
of his functions under this Act except -
(a) when authorised to do so under any of the provisions of this Act;
(b) for the purpose of the performance of his duties or the exercise of his functions;
(c) when lawfully required to do so by any court or under a provision of any law.
(5) In this article, any reference to officers or agents has the same meaning as is assigned to it in article 30(7).
(6) Where an officer or an employee of an authorised company has reason to believe that a transaction or a proposed transaction
could involve money laundering or the funding of terrorism, he shall act in compliance with the reporting and other obligations set
out in the regulat ions made under art icle 12 of t h e Preve n ti on of Mo ney Laundering Act and any procedures and guidance issued thereunder, and such disclosure shall not constitute a breach of confidentiality.
Cap. 373.
60. (1) Notwithstanding the provisions of the Professional Secrecy Act, article 257 of the Criminal Code shall not affect or prevent the exchange of information about policies, policyholders or potential policyholders -
(a) amongst companies authorised to carry on the business of insurance ("insurers");
(b) amongst companies or persons registered or enrolled under the Insurance Intermediaries Act ("intermediar- ies");
(c) between insurers and intermediaries;
(d) between insurers, or intermediaries, or insurers and
Communication of confidential information. Amended by:
XX. 2007.136.
Cap. 377.
Cap. 9.
Cap. 487.
intermediaries, and the Commissioner of Police,
provided that such exchange is compatible with or reasonably required for the purpose of preventing, detecting or suppressing
insurance fraud.
(2) For the purposes of this article, "insurers" includes the insurance agents and insurance managers of the
insurers.
Service of notices, etc.
Amended by: XII. 2006.112;
XX. 2007.137.
Continuance of companies carrying on business of insurance,
insurance manager or insurance
broker. Amended by: XVII. 2002.266;
XIII. 2004.119; XII. 2006.113.
Cap. 386.
(a) it has been delivered to him; or
(b) it has been left at the address furnished by him to the competent authority, or at his last known address; or
(c) it has been sent to him by post or by telefax at any of the aforesaid addresses; or
(d) in the case of a commercial partnership registered in Malta, it has been delivered, sent by post or by telefax, or left at
the registered office, or the last known registered office, of that commercial partnership; or
(e) in the case of any other body of persons, whether corporate or unincorporate, it has been given or served in any of the
manners aforesaid to or on an officer, or a clerk of that body or to or on the person designated by that body under article 11(1)(d)(i) or article 48A(2), as the case may be;
and the expression "officer", in relation to a body of persons shall i nclude an insurance agent, an insuran ce manager,
or a person , other than an insurance agent or an insurance manager, authorised to act for that body of persons in the same manner
and to the same extent as an insurance agent.
(a) a body corporate, registered, incorporated or constituted in a country outside Malta, which is similar in nature
to a company as known under the laws of Malta and which would, if it were such a company, qualify to be authorised under this Act
as a company carrying on business of insurance, to be continued as a company carrying on business of insurance under the Companies Act and under this Act; and
(b) a company carrying on business of insurance authorised under this Act to be continued as a body corporate registered,
incorporated or constituted under the laws of a country outside Malta, in either case by complying with the regulations;
Cap. 386. and the Companies Act shall, in respect of such bodies corporate or companies carrying on business of insurance, have effect accordingly.
(2) Regulations under this article may provide that continuance as aforesaid may only take place if -
(a) it is within the power of such body or company so to continue;
(b) the continuance is, in either case, approved in such manner as may be prescribed,
and the regulations may further provide that the continuance of a company carrying on business of insurance as a body corporate
under a foreign jurisdiction shall not take place unless -
(i) such continuance (or similar process, including conversion) is permitted by the law of such foreign jurisdiction
and is in accordance with such provisions thereof as may bring about such continuance (or similar process); and
(ii) such continuance (or similar process) will operate the continuation of the corporate existence of the
company as, or its conversion into, a body corporate which will continue to retain or will succeed to all assets, rights
and liabilities of the company.
(3) (a) The provisions of the foregoing subarticles shall also apply, mutatis mutandis to companies enrolled to act as insurance managers and companies enrolled to carry on the business of insurance broking under the
Insurance Intermediaries Act, and accordingly references in this article to "authorised" and to "business of insurance" shall be deemed to
include references to "enrolled" and "activ it ies o f com p an ies en ro ll ed as insu ran c e managers and bu
sin e ss of insurance bro k ing", respectively.
(b) In this subarticle reference to the "company" shall include reference to a "partnership en commandite"
or to a similar or equivalent body corporate the capital of which is divided into shares.
(4) The provisions of this article and of any regulations made thereunder shall prevail over anything to the contrary contained
in the Companies Act, or regulations made thereunder, with respect to continuance of companies.
Cap. 487.
Cap. 386.
(2) Without prejudice to the generality of subarticle (1), regulations under this article may provide that, for any specified
purpose, assets or liabilities of any specified class or description shall be left out of account or shall be taken into account
only to a specified extent.
(3) Regulations under this article may make different provision
Valuation regulations.
in relation to different cases or circumstances.
Minister’s power to make regulations. Amended by: XVII. 2002.267; XIII. 2004.120; XII. 2006.114; XX. 2007.138; L.N. 426 of 2007; X. 2011.79.
(a) any matter relating to or connected with the business of insurance or contracts of insurance;
(b) the requirements, duties or conditions to be observed by any company authorised under this Act for the sound and prudent
management of its activities;
(c) provide for and regulate the payment by any person, body or cell created by a cell company, as the case may be, of any fees, duties
and such other charges payable to the competent authority in respect of any matter provided for, by or under this Act or any
regulations made under this article;
(d) the categories of assets required to be maintained under this Act;
(e) the determination and regulation of large risks;
(f) any matter relating to or connected with any provision contained in the Schedules;
(g) any matter that may or is to be prescribed under any provision of this Act;
(h) any matter incidental to or connected with any of the above;
(i) the penalties or other punishments to which persons contravening or failing to comply with any provision of any regulation
made as aforesaid shall become liable, being penalties not exceeding one hundred and fifty thousand euro (€150,000), in
respect of any offence and in respect of a continuing offence of a further penalty and not exceeding two hundred and thirty euro
(€230) for each day during which the offence continues.
(2) Except where any regulation made under this Act provides for a lesser penalty, any person acting in contravention of or failing
to comply with or otherwise observe any such regulation shall be liable to a penalty of not less than two hundred and thirty euro
(€230) and not exceeding one hundred and fifty thousand euro (€150,000), in respect of each offence and in the case of a continuing
offence to a further penalty not exceeding two hundred and thirty euro (€230) for each day during which the offence continues.
(3) The Minister may, after consultation with the competent authority, make regulations for the transposition of Directive
2002/
87/EC of the Eur opean Parliament and of the Council of 16
Decembe r 2002 on th e supplementary supe rvision of credit
i nstitu tion s, in su rance u ndert aking s and i nvestm en ts fi rm s in a
f i nanci a l con g lo morate, as may be ap pli c ab le to i n suran c e undertakings.
(4) The Minister may, after consultation with the competent authority, make regulations providing for the determination and
regulation of any m a tter which re lates to finite reinsurance activities, including mandatory conditions for inclusion in all finite
reinsurance contracts, and prescribing the accounting, prudential an d statisti cal inf o rm ation requi remen t s pro v idin g fo
r t h e establishment of technical provisions, the margin of solvency and the m i nimum guarantee fund requi rements that a reinsurance
u n d ert a ki ng s h al l main tai n in r e spect o f fi ni te rein su rance activities.
(5) The Minister may, after consultation with the competent autho r ity, make regulations providi ng for the establishment
of special purpose vehicles within the meaning of Directive 2005/68/ EC of the European Parliament and of the Council of 16 November
2005 on reinsurance and amending Council Directives 73/239/EEC,
92/49 /EEC, as well as Directives 98/78/EC and 2002/83/EC,
including the conditions under which the activities of such vehicles shall be carried on.
(6) The Minister may, after consulting the competent authority, make regulations exempting any person or any class or classes or
part classes of business of insu ran c e, fr om al l or an y of t h e prov isions o f t h is Act or of an y reg u lati ons m a de
thereunder, su bject t o such con d it io ns or requi rem e nt s in clud ing th e requirement of ot her forms of aut horisati on
and no tificatio n procedures as may be prescribed.
(7) The Minister may, after consultation with the competent authority, make regulations to better implement the provisions
of th is A c t, including t h e transp osit ion of any requ irement or provision as may arise under a Directive, Regulation or Decision
of the European Union or any other similar measure relevant for the purposes of this Act.
(8) Regulations may be made under this article with regards to any matter related to a transfer of business of insurance; and the
regulations may make such exemptions, conditions, modifications as may be specified therein in respect of different circumstances
or purposes.
(9) Regulations made under this article may make such ex em ptio ns, cond itions or mo difi cati ons as m a y be
specifi ed therein in respect of different cases, circumstances or purposes and may give the competent authority such power of adaptation
of the regulations as may be specified therein.
(10) The exercise of any of the powers assigned under this article shall be subject to any obligations or restrictions arising
from Malta’s international commitments.
(11) Regulations made under this Act and any amendment or revocation of such regulations, may be published in the English language
only.
Exemption under Duty on Documents and Transfers Act. Amended by:
XX. 2007.139.
Cap. 364.
Exclusion of liability. Amended by: XII. 2006.115.
Offences and penalties. Amended by: XII. 2006.116; XX. 2007.140;
L.N. 426 of 2007; X. 2011.80.
65. No duty shall be chargeable under the Duty on Documents and Transfers Act, or under any enactment replacing that law, on any contract of insurance relating to a risk situated outside Malta.
(2) Any person -
(a) who, for the purpose of obtaining the issue of an authorisation under this Act or any regulations made thereunder, furnishes
information or makes a statement or a declaration which he knows to be inaccurate, false or misleading in any material particular,
or recklessly furnishes information or makes a statement or a declaration which is inaccurate, false or misleading in any
material particular; or
(b) who is knowingly a party to, or procures or aids and abets, any contravention of any provision of this Act or any regulations
made thereunder or any insurance rule; or
(c) who intentionally obstructs a person exercising rights conferred by this Act or any regulations made thereunder;
or
(d) who contravenes or fails to comply with any condition, limitation, requirement, directive or order made or given under any
of the provisions of this Act or of any regulations made thereunder or any insurance rule; or
(e) who being a director, a controller, an officer or an employee of a company -
(i) fails to take all reasonable steps to secure compliance by the company with any of the provisions of this Act
or of any regulations made thereunder, or any authorisation or permit issued thereunder, or any insurance rule; or
(ii) fails to take reasonable steps to ensure the correctness of the statements made or other information given under
any of the provisions aforesaid; or
(iii) removes, destroys, conceals or fraudulently alters any book, document or other paper with
intent to avoid detection of the commission of an offence under any of the provisions aforesaid,
shall be guilty of an offence.
(3) For the purposes of subarticle (2)(e), the expression "o ff i cer", i n relat i o n to a co mpa n y, shall include an insurance agent, an insurance manager,
or a person, other than an insurance agent or an insurance manager, authorised to act for the company in the same manner and to the
same extent as an insurance agent.
(4) The Minister shall make regulations under this article pre s cri b in g pe na lt i e s fo r of fe nc es ag ai n s t
th i s A c t , a n d su ch regulations may -
(a) prescribe penalties which are enforceable by prosecution in the courts of Malta;
(b) prescribe different penalties for contraventions of different provisions of this Act;
(c) prescribe penalties calculated in accordance with the duration of the commission of the offence,
unless such penalties are otherwise imposed under article 64.
(5) The penalties prescribed by the regulations made under subarticle (4) -
(a) in the case of imprisonment, shall not provide for a sentence of imprisonment greater than two years;
(b) in the case of a fine imposed after a prosecution in the courts of Malta, shall not provide for a fine (multa) of less than two hundred and thirty euro (€230) or greater than one hundred and sixteen thousand euro (€116,000).
(6) The Minister may by the regulations made under this article provide for administrative penalties in respect of infringements,
as may be prescribed, which may be imposed and recovered by the com p etent authority without recourse to a court hearing; administrative
penalties shall be due to the competent authority as a civil debt:
Provided that an administrative penalty may not be greater than a financial penalty of one hundred and fifty thousand euro (€150,000)
in respect of each infringement or failure to comply, as the case may be, and, where such infringement or failure to comply continues,
a further penalty not exceeding one hundred and sixteen euro (€116) for each day during which the infringement or failure to comply
continues:
Provided further that a penalty imposed under this article, whether in the form of a fixed amount, a daily penalty, or both, may,
in no case, exceed one hundred and fifty thousand euro (€150,000).
Proceedings for an offence under this Act.
Amended by: XII. 2006.117.
(2) The provisions of this Act and any regulations made thereunder shall not affect any criminal proceedings that may be competent under any other law.
Savings. Amended by: XII. 2006.118; XIX. 2010.50; X. 2011.81.
Cap. 487.
Cap. 249.
69. (1) Subject to subarticle (4), every licence issued or other action whatever taken or commenced under the Insurance Business Act* (in this article referred to as "the Act") shall continue in force
and to be valid as if such licence were issued or other action were taken or commenced under this Act.
(2) Every company licensed under the Act to carry on business of insurance either as principal or as agent shall, not later than
the appo inted date, conform w ith th e provision s o f thi s A c t or otherwise cease to carry on the business it was licensed
to carry on, an d shal l un ti l t he ap poi nt ed dat e or u nti l it co nform s w it h t he provisions of this Ac t, whichever
is the earlier, continue to be governed by the provisions of t h e Act. For the purpose of t h is article "appointed date"
means a day being six months after the date of the coming into force of this Act.
(3) Where a company ceases to carry on business of insurance either as principal or as agent on grounds that such company did not,
on the appointed date, conform with the provisions of this Act, th at co mp an y shal l be deemed to h a ve gi ven no ti ce t o th
e competent authority under article 39 on the appointed date to cease to carr y o n the b u sin e ss it was li cen s ed to car r
y on, on th e app o inted d a te, an d to hav e been issued with a p e rmit by th e co mp etent aut hor ity un der th at ar ticl
e on th e app oin ted date to cease to carry on such business on the appointed date and to service that business as from that da
te. The competent authority may impose such conditions with regard to the servicing of that business as it may deem proper.
(4) Every licence issued or renewed or other action whatever taken o r commenced und er the A c t in so far as it appl ies to
insurance brokers and insurance salesmen, shall continue in force and to be valid as if such licence were a certificate of enrolment
issued or as if such other action were action taken or commenced under the Insurance Intermediaries Act.
(5) For the purposes of this article "licence" includes an authority, permit, approval and appointment.
(6) Without prejudice to the provisions of article 12 of the I n terpretation A c t, all regulations, orders and other instruments which were kept in force by the Act and all regulations, orders and o t her instrum
e nts m a de un der the A ct , and an y agreement and arrangement which were made in virtue of the Act, any regulation, order or
ot her instrument shall, if and as in force im mediately before the commencement of this article, be deemed to have been made under
or in virtue of this Act and shall continue in force and m a y be am ended, altered , repeal ed or otherwise dealt w ith accordingly.
(7) All references in any enactment and in any instrument or
*Repealed by this Act.
other document to the Act, or any provision thereof, shall, in so far as applicable, be read and construed as a reference to this
Act or to the corresponding provision thereof.
(8) Any reference in any licence, notice, decision or other act made or taken by the competent authority, to an insurance directive
issued by the competent authority, and any reference in any law or regulation to an insura nce direc t ive s h a l l be deemed to
be a reference to an insurance rule.
(9) The assets and the liabilities of the Security Fund established by the Act shall upon the coming into force
of this Act be transferred to the Protection and Compensation Fund established by article 49 without the need of any formality other
than this Act.
Amended by: XVII. 2002.268; XIII. 2004.121.
Deleted by XII. 2006.119.
Amended by: XII. 2006.120.
(Article 5)
1. In this Schedule, "insurance rule" means the insurance rule made under and for the purposes of article 5.
2. Classes of Long Term Business
Number | Class | Description |
I II III IV | Life and annuity Marriage and birth Linked long term Permanent health | E f f e c t i n g a n d carrying out contracts of insurance on hum an life or contracts to pay annu it ies o n hu man l i fe, bu t ex clud in g (in ea ch ca se) c ontracts within class III of this Schedule. E f f ecting and carrying out contracts of insurance to provide a sum on marriage or on the birth of a child, being contracts expressed to be in effect for a period as may be specified by the insurance rule. E f f e c t i n g a n d c a r r y i n g o u t c o n t r a c t s o f insurance on hum an life or contracts to pay annuities on human life where the benefits are wholly or partly to be determined by reference to the value of, or the income from, property of any description (whether or not specified in the contracts) or by reference to fluctuations in, or in an index of, the value of property of any description (whether or not so specified). E f f e c t i n g and carrying out contracts of insurance providing specified benefits against ris k s of persons be coming incapa c itated in consequence of sustaining injury as a result of an accident or of an accident of a specified class or of si ck ness or inf i rmi t y, b e ing contracts that - |
Number | Class | Description |
V VI VII VIII IX | Tontines Capital redemption P ension fund management Co llect ive insurance Social insurance | (a) are expressed to be in effect for a period as may be specified by the insurance rule, or until the normal retirement age for the persons concerned, or without limit of time, and (b) either are not expressed to be terminable by the insurer, or are expressed to be so terminable only in special circumstances mentioned in the contract. Effecting and carrying out tontines. Effecting and carrying out capital redemption contracts. Effecting and carrying out - (a) contracts to manage the investments of pension funds, or (b) contracts or the kind mentioned in paragraph (a) above that are combined with contracts of insurance covering either conservation of capital or payment of a minimum interest. Effecting and carrying out contracts of a kind as may be specified by the insurance rule. Effecting and carrying out contracts of a kind as may be specified by the insurance rule. |
(Articles 5 and 7)
Number Class
1 Accident (including industrial injury and occupational diseases) (a) fixed pecuniary benefits;
(b) benefits in the nature of indemnity;
(c) combinations of the two; (d) injury to passengers.
2 Sickness
(a) fixed pecuniary benefits;
(b) benefits in the nature of indemnity; (c) combination of the two.
3 Land vehicles (other than railway rolling stock) All damage to or loss of:
(a) land motor vehicles;
(b) land vehicles other than motor vehicles.
4 Railway rolling stock
All damage to or loss of railway rolling stock.
5 Aircraft
All damage to or loss of aircraft.
6 Ships (sea, lake and river and canal vessels) All damage to or loss of:
(a) river and canal vessels; (b) lake vessels;
(c) sea vessels.
7 G oods in transit (including m erchandise, baggage, and all other goods)
All damage to or loss of goods in transit, or baggage, irrespective of the form of transport.
8 Fire and natural forces
All damage to or loss of property (other than property included in classes 3, 4, 5, 6 and 7) due to:
(a) fire;
(b) explosion
(c) storm;
Number Class
(d) natural forces other than storm; (e) nuclear energy;
(f) land subsidence.
9 Other damage to property
All damage to or loss of property (other than property included in classes 3, 4, 5, 6 and 7) due to hail or frost, and any event such
as theft, other than those falling within class 8.
10 Motor vehicle liability
All liability arising out of the use of motor vehicles operating on the land (including carrier ’s liability).
11 Aircraft liability
All liability arising out of the use of aircraft (including carrier ’s liability).
12 Liability for ships (sea, lake and river and canal vessels)
All liability arising out of the use of ships, vessels or boats on the sea, lakes, rivers or canals (including carrier ’s liability).
13 General liability
All liability other than those falling within classes 10, 11 and 12.
14 Credit
(a) insolvency (general); (b) export credit;
(c) instalment credit; (d) mortgages;
(e) agricultural credit.
15 Suretyship
(a) suretyship (direct); (b) suretyship (indirect).
16 Miscellaneous financial loss
(a) employment risks;
(b) insufficiency of income (general); (c) bad weather;
(d) loss of benefits;
(e) continuing general expenses; (f) unforeseen trading expenses; (g) loss of market value;
(h) loss of rent or revenue;
Number | Class |
17 18 | (i) indirect trading losses other than those specified above; (j) other financial loss (non-trading); (k) other financial loss (not specified in (j) above). Legal expenses Legal expenses (including costs of litigation). Assistance (a) assistance for persons who get into difficulties while travelling, while away from home or while away from their permanent residence; (b) assistance in other circumstances. |
Number | Description | Composition |
1 2 3 4 5 6 7 8 | Accident and Health Motor Marine and Transport Aviation F i r e and oth e r Damag e to Property Liability Credit and Suretyship General | Classes 1 and 2 Classes 1 (d), 3, 7 and 10 Classes 1 (d), 4, 6, 7 and 12 Classes 1 (d), 5, 7 and 11 Classes 8 and 9 Classes 10, 11, 12 and 13 Classes 14 and 15 All classes |
Amended by: XVII. 2002.269; XIII. 2004.122.
Deleted by: XII. 2006.121.
(Article 13)
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