With Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (recast), (the “Solvency II”) set to come into force in 2016, the local insurance regulator, the Malta Financial Services Authority, is leading the process for the transposition of Solvency II into Maltese law.
Further to the consultation document issued on 22 December 2014 highlighting the main changes to be carried out to the Insurance Business Act (Cap.403), on 18 September 2015 the MFSA issued a consultation document on the regulations to be issued under the Insurance Business Act. The object of the consultation document is to ensure that the subsidiary legislation issued under the Insurance Business Act is in conformity with the requirements and terminology of Solvency II.
It is being proposed that the following existing insurance regulations be amended:
- Insurance Business (Companies Carrying on Business of Affiliated Insurance) Regulations, 2003;
- Companies Act (Incorporated Cell Companies Carrying on Business of Insurance) Regulations, 2010;
- Insurance Business (Linked Long Term Contracts) Regulations, 2001;
- Insurance Business (Approved Auditor) Regulations, 2001;
- Insurance Business (Continuance of Companies Carrying on Business of Insurance) Regulations, 2003;
- Companies Act (Cell Companies Carrying on Business of Insurance) Regulations, 2010;
- Protection and Compensation Fund Regulations, 2004;
- Insurance Business (Penalties for Offences and Infringements) Regulations, 2000;
- Insurance Business (Long term Business Contract Statutory Notice) Regulations, 2001; and
- Insurance Business (Reorganisation and Winding Up of Insurance Undertakings) Regulations, 2004.
It is also proposed that the following new legal notices be issued:
- European Passport Rights for Insurance and Reinsurance Undertakings Regulations, 2015;
- Insurance Business (Commission Delegated Regulation on Solvency II) Regulations, 2015;
- Insurance Business (Exemptions) Regulations, 2015;
- Insurance Business (Maintenance of Assets) Regulations, 2015;
- Insurance Business (General Provisions of Supervision) Regulations, 2015; and
- Insurance Business (Solvency II Transitional Provisions) Regulations, 2015
The following notices are to be revoked:
- Insurance Business (Criteria of Sound and Prudent Management), 1999; and
- The Insurance Business (Companies Accounts) Regulations, 2001
Interested parties are to submit any comments in writing by not later than the 19 October 2015. The consultation document may be accessed at http://www.mfsa.com.mt/pages/announcement.aspx?id=7122
Camilleri Preziosi has taken note of the proposed amendments and the underlying reasoning set out by the MFSA, and is in the process of drawing up its recommendations. If interested in discussing Camilleri Preziosi’s proposals, kindly contact Malcolm Falzon on email@example.com.