INSURANCE BUSINESS          [CAP. 403.   1
CHAPTER 403
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 , X of 2011, XX of
2013  ,XXXIII of 2015  ,XXVI of 2018  and V of 2020 .
ARRANGEMENT OF ACT
Articles
Part I. Preliminary 1 - 2Part II. Supervision of Business of Insurance 3 - 4Part III. Authorisation for carrying on Business of Insurance  5 - 13
Part IV . Conditions for carrying on Business of Insurance 14 - 18 I
Title I:  Financial Requirements 14 - 18GTitle II: Governance 18H - 18I
Part V . Accounts, Actuarial Investigations and Financial
     Statements 19 - 24
Part VI. Powers of Intervention 25 - 28Part VII. Supervision of Authorised Insurance and Reinsurance
     Underakings29 - 32
Part VIIA. Group Supervision 32A - 32E
Part VIII. Transfer of Business of Insurance 33 - 37Part IX. Acquis ition and Disposal of Shares, Withdrawal,
     Dissolution and Winding up 38 - 42
Part X. Obligations on Undertakings 43 - 48CPart XI. Protection and Compensation Fund 49 - 54Part XII. General Provisions 55 - 69
SCHEDULES
First Schedule Provisions relating to Lloyd’sSecond Schedule Classes of long term business
Third Schedule Classes and groups of classes of general business
Fourth Schedule Provisions relating to insurance agents and mana gers
 2     CAP. 403. ]                    INSURANCE BUSINESS 
PART I  
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;XXXIII. 2015.4;XXVI.2018.61;V .2020.41.2.(1) In this Act, unless the context otherwise requires - 
"advertisement", in relation to the business of insurance, means any
form or medium of marketing activity or communication dissemina ted
to the public by means of all types of media, other than a pros pectus,
which promotes the purchase or procurement of a service or prod uct
and which is addressed by an authorised insurance undertaking t o a
client or potential client;
"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);
"authorisation", in relation to business of insurance, or to a
matter connected therewith or ancillary thereto, means anauthorisation or a deemed authorisation under this Act, and"authorised" shall be construed accordingly;
"authorised insurance undertaking" means an undertaking, which
has received authorisation pursuant to article 7 to carry on di rect
general business and, or long term business, and includes anundertaking authorised to carry on direct and reinsurance busin ess;
"authorised reinsurance undertaking" means an undertaking
which has received authorisation pursuant to article 7 to carry  on
business restricted to reinsurance;
"body corporate" means any entity having a legal personality
distinct from that of its members and also includes a foreigncorporation;
"branch" means premises of an authorised insurance and
reinsurance undertaking, other than 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 bu siness
or class or classes or part classes of general business asrespectively 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 customsbonds or similar contracts of guarantee, beingcontracts effected by way of business (and notmerely incidentally to some other businesscarried on by the person effecting them) inreturn for the payment of one or more premiums;
(ii) capital redemption contracts based on actuarial
                 INSURANCE BUSINESS          [CAP. 403.   3
calculation whereby, in return for single or
periodic payments agreed in advance,commitments of specified duration and amountare undertaken;
(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 carryingon business of banking" includes "a person notcarrying on investment services";
(b) any business carried on in connection with or ancillary
to business of insurance;
(c) unless otherwise specified, business of reinsurance;
"captive insurance undertaking" means an authorised insurance
undertaking, owned either by a financial undertaking, other tha n an
insurance or reinsurance undertaking or a group of insurance orreinsurance undertakings within the meaning of article 2, or by  a
non-financial undertaking, the purpose of which is to provideinsurance cover exclusively for the risks of the undertaking orundertakings to which it belongs or of an undertaking orundertakings of the group of which it is a member;
"captive reinsurance undertaking" means an authorised
reinsurance undertaking, owned either by a financial undertakin g,
other than an insurance or reinsurance undertaking or a group o f
insurance or reinsurance undertakings within the meaning of art icle
2, or by a non-financial undertaking, the purpose of which is t o
provide reinsurance cover exclusively for the risks of theundertaking or undertakings to which it belongs or of anundertaking or undertakings of the group of which it is a membe r;
Cap. 386."cell" has the same meaning as is assigned to it by the
Companies Act;
Cap. 386."cell company" has the same meaning as is assigned to it by the
Companies Act;
"close links" means a situation in which two or more natural or
legal persons are linked by control or participation, or a situ ation in
which two or more natural or legal persons are permanently link ed
to one and the same person by a control relationship;
"commitment" means a commitment represented by any one or
more of the kinds of classes of long term business contained in  the
Second Schedule;
Cap. 330."competent authority" means the Malta Financial Services
Authority established by the Malta Financial Services Authority Act;
"conditions" includes obligations and restrictions;"Conduct of Business Rules" means Rules relating to conduct of
business issued by the competent authority under various articl es of
this Act and under any regulations made thereunder;
"contract of insurance" and "contract", in relation to business  of
insurance, mean an agreement in which an insurer agrees, for a
 4     CAP. 403. ]                    INSURANCE BUSINESS 
consideration, to pay to or for the account of the insured a su m of
money or other consideration, whether by way of indemnity again st
loss, damage or liability or otherwise, on the happening of aspecified event with respect to which there is an element ofuncertainty as to when or whether it will take place;
"control" means the relationship between a parent undertaking
and a subsidiary undertaking, as set out in Article 22 of Direc tive
2013/34/EU of the European Parliament and of the Council of 26June 2013 on the annual financial statements, consolidatedfinancial statements and related reports of certain types ofundertakings, amending Directive 2006/43/EC of the EuropeanParliament and of the Council and repealing Council Directives 78/
660/EEC and 83/349/EEC, or a similar relationship between anynatural or legal person and an undertaking;
"controller", in relation to a body corporate, is a person who,
alone or together with others, exercises the power to determine  the
financial and operating policies of the body corporate;
"country of the commitment" means any country 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;
"country outside Malta" means and includes any country,
territory or place outside Malta;
"director", in relation to an undertaking, includes an individu al
occupying the position of a director of the undertaking, bywhatever name he may be called, empowered to carry outsubstantially the same functions in relation to the direction o f the
undertaking as those carried out by a director and, in respect of a
third country insurance undertaking or a third country reinsura nce
undertaking, includes a member of a local board, and the persondesignated as the representative of that undertaking for the pu rpose
of article 11(1)( b)(i);
"document" or "documentation" includes information recorded in
any form and, in relation to information recorded otherwise tha n in
legible form, references to its production include references t o
producing a copy of the information in legible form;
"EEA State" means a State which is a contracting party to the
agreement on the European Economic Area signed at Oporto on 2May, 1992 as amended by the Protocol signed at Brussels on the17th March, 1993 and as amended from time to time;
"EIOPA" means the European Insurance and Occupational
Pensions Authority established in terms of article 1 of Regulat ion
(EU) No 1094/2010;
"establishment" means the head office, or any branches of an
authorised insurance undertaking or an authorised reinsuranceundertaking;
"European insurance undertaking" means an undertaking having
its head office in a Member State or an EEA State, other thanMalta, pursuing the activity of direct insurance within the mea ning
                 INSURANCE BUSINESS          [CAP. 403.   5
of Article 2 of the Solvency II Directive, which has received
authorisation in accordance with Article 14 of the Solvency IIDirective;
"European regulatory authority" means the supervisory authority
or supervisory authorities as de fined in Article 13 of the Solv ency
II Directive, designated by a Member State or EEA State, otherthan Malta, empowered by law or regulation to supervise insuran ce
or reinsurance undertakings;
"European reinsurance undertaking" means an undertaking
having its head office in a Member State or an EEA State, otherthan Malta, pursuing business restricted to reinsurance within the
meaning of Article 2 of the Solvency II Directive which hasreceived authorisation in accordance with Article 14 of theSolvency II Directive;
"European right" means the entitle-ment of an authorised
insurance undertaking, authorised reinsurance undertaking,European insurance undertaking or a European reinsuranceundertaking to establish a branch, or provide services, in a Me mber
State or an EEA State, other than that in which it has its headoffice -
(a) in accordance with the Treaty of Rome as applied in a
Member State or an EEA State;
(b) subject to the requirements of the Solvency II
Directive and subject to any regulations made underthis Act, or Insurance Rules issued by the competentauthority pursuant to this Act, implementing suchrequirements;
"European Systemic Risk Board" means the European Systemic
Risk Board established by Regulation (EU) No 1092/2010 of theEuropean Parliament and of the Council of 24 November 2010 onEuropean Union macro-prudential oversight of the financial syst em
and establishing a European Systemic Risk Board;
"financial undertaking" means any of the following entities:
(a) a credit institution, a financial institution or an
ancillary banking services undertaking within themeaning of sub-paragraphs (1), (17) and (22) ofparagraph (1) of Article 3 of Directive 2013/36/EUrespectively;
(b) an insurance undertaking, or a reinsurance undertaking
or an insurance holding company within the meaningof Article 212(1)(f) of the Solvency II Directive;
(c) an investment firm or a financial institution within the
meaning of point 1 of Article 4(1) of Directive 2014/65/EU; or
(d) a mixed financial holding company within the meaning
of Article 2(15) of Directive 2002/87/EC;
"financial year" shall be construed in accordance with article
19(4);
"functions" includes responsibilities, powers and duties;
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"general business" has the meaning assigned to it by article 5( 1);
"group" means a group of undertakings that:
(a) consists of a participating undertaking, its subsidiaries
and the entities in which the participating undertakingor its subsidiaries hold a participation, as well asundertakings linked to each other by a relationship asset out in Article 22  of Directive 2013/34/EU of the
European Parliament and of the Council of 26 June2013 on the annual financial statements, consolidatedfinancial statements and related reports of certaintypes of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council andrepealing Council Directives 78/660/EEC and 83/349/EEC; or
(b) is based on the establishment, contractually or
otherwise, of strong and sustainable financialrelationships among those undertakings, and that mayinclude mutual or mutual-type associations, providedthat:
(i) one of those undertakings effectively exercises,
through centralised coordination, a dominantinfluence over the decisions, including financialdecisions, of the other undertakings that are partof the group; and
(ii) the establishment and dissolution of such
relationships for the purposes of Title III of theSolvency II Directive are subject to priorapproval by the group supervisor,
where the undertaking exercising the centralised coordination s hall
be considered as the parent undertaking, and the other undertak ings
shall be considered as subsidiaries;
"guarantee fund" means the body referred to in Article 10(1) of
Directive 2009/103/EC of the European Parliament and of theCouncil of 16 September 2009 relating to insurance against civi l
liability in respect of the use of motor vehicles, and theenforcement of the obligation to insure against such liability;
Cap. 386."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);
Cap. 487."insurance agent" means a person enrolled as such under the
Insurance Distribution Act;
"Insurance Distribution Directive" means Directive (EU) 2016/97  of
the European Parliament and of the Council of 20 January 2016 o n
insurance distribution (recast), as amended from time to time, and
includes any delegated acts and any technical standards that ha ve been
or may be issued thereunder;
Cap. 487."insurance manager" means a person enrolled as such under the
Insurance Distribution Act;
                 INSURANCE BUSINESS          [CAP. 403.   7
"Insurance Rules" means rules in respect of the business of
insurance issued by the competent authority under various artic les
of this Act and under any regulations made thereunder;
"insured" means the party to whom, or on whose account, or to
whose beneficiaries, a sum of money or other consideration ispayable under a contract of insurance on the happening of aspecified event;
"insurer" means the party to a contract of insurance who agrees
to pay a sum of money or other consideration on the happening o f a
specified event;
"Lloyd’s" means the society and corporation incorporated by
Lloyd’s Act, 1871, of the United Kingdom;
"long term business" has the meaning assigned to it by article
5(1);
"Malta’s international commitments" means Malta’s
commitments, responsibilities and obligations arising out ofmembership of the European Union and membership of, oraffiliation to, or relationship with, any international, global  or
regional organisations or grouping of countries or out of any t reaty,
convention or other international agreement, however called,whether bilateral or multilateral, including Memoranda ofUnderstanding, to which Malta is a party;
"Member State" means a Member State of the European
Communities;
"Minister" means theMinister responsible for the regulation of
Financial Services;
Cap. 373."money laundering" has the same meaning as is assigned to it by
the Prevention of Money Laundering Act;
Cap. 104."motor vehicle" has the same meaning as assigned to it by artic le
2 of the Motor Vehicle Insurance (Third Party Risks) Ordinance;
"officer", in relation to an undertaking, includes a director,
manager or company secretary or any person effectively acting i n
such capacity whether formally appointed or not;
"outsourcing" means an arrangement of any form between an
authorised insurance or reinsurance undertaking and a serviceprovider, whether a supervised entity or not, by which that ser vice
provider performs a process, a service or an activity, whetherdirectly or by sub-outsourcing, which would otherwise beperformed by the authorised insurance or reinsurance undertakin g
itself, and "outsource" shall be construed accordingly;
Cap. 330."overseas regulatory authority" means an authority in a country
or territory outside Malta, that is not a Member State or EEA S tate,
which exercises any regulatory or supervisory function in relat ion
to financial services corresponding to a function of the compet ent
authority as defined in the Malta Financial Services Authority Act;
"own funds" shall be construed in accordance with Insurance
Rules made by the competent authority for the purposes of this Act;
"participation" means the ownership, direct or by way of contro l,
 8     CAP. 403. ]                    INSURANCE BUSINESS 
of 20% or more of the voting rights or capital of an undertakin g;
"participating undertaking" means an undertaking which is eithe r
a parent undertaking or other undertaking which holds aparticipation, or an undertaking linked with another undertakin g by
a relationship as set out in Article 22 of Directive 2013/34/EU  of
the European Parliament and of the Council of 26 June 2013 on t he
annual financial statements, consolidated financial statements and
related reports of certain types of undertakings, amending Dire ctive
2006/43/EC of the European Parliament and of the Council andrepealing Council Directives 78/660/EEC and 83/349/EEC;
"policy", in relation to business of insurance, means and inclu des
a policy or a similar document, by whatever name it may be call ed,
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 i nsurer;
"premium" means the consideration paid or payable 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
an undertaking which represents ten per centum  or more of the
share capital or of the voting rights, taking into account the voting
rights as set out in Articles 9 and 10 of Directive 2004/109/EC  of
the European Parliament and of t he Council of 15 December 2004
on the harmonisation of transparency requirements in relation t o
information about issuers whose securities are admitted to trad ing
on a regulated market, and amending Directive 2001/34/EC, as we ll
as the conditions regarding aggregation thereof laid down in Ar ticle
12(4) and (5) of that Directive, or which makes it possible toexercise a significant influence over the management of theundertaking in which that holding subsists, and "qualifyingshareholder" shall be construed accordingly:
Provided that, in determining whether the criteria for a
qualifying shareholding are fulfilled, the competent authority shall
not take into account voting rights or shares which investmentfirms or credit institutions may hold as a result of providing the
underwriting of financial instruments and, or placing of financ ial
instruments on a firm commitment basis in terms of point (6) ofSection A of Annex 1 to Directive 2014/65/EU of the EuropeanParliament and of the Council of 15 May 2014 on markets in fina ncial
instruments and amending Directive 2002/92/EC and Directive 201 1/
61/EU (recast), provided that those rights are, on the one hand , not
exercised or otherwise used to intervene in the management of t he
issuer and, on the other, disposed of within one year of acquis ition;
Cap. 386. "reconstruction" has the same meaning as in the Companies Act;
"regulated market" means either of the following:
Cap. 345.(a) in the case of a market situated in Malta, a market
authorised in terms of the Financial Markets Act;
(b) in the case of a market situated in a Member State or an
                 INSURANCE BUSINESS          [CAP. 403.   9
EEA State, other than Malta, a regulated market as
defined in point (21) of Article 4(1) of Directive 2014/65/EU of the European Parliament and of the Council of 15May 2014 on markets in financial instruments andamending Directive 2002/92/EC and Directive 2011/61/EU (recast), as amended from time to time; or
(c) in the case of a market situated in a non-Member State
or non-EEA State, a financial market which fulfils thefollowing conditions:
(i) it is recognised by the competent authority and
fulfils requirements comparable to those laid
down Directive 2014/65/EU; and
(ii) the financial instruments dealt in on that market
are of a quality comparable to that of theinstruments dealt in on the regulated market ormarkets in Malta;
"Regulation (EU) No 1094/2010" refers to Regulation (EU) No
1094/2010 of the European Parliament and of the Council of 24November 2010 establishing a European Supervisory Authority(European Insurance and Occupational Pensions Authority),amending Decision No 716/2009/EC and repealing CommissionDecision 2009/79/EC;
"reinsurance" means one of the following:
 (a) the activity consisting in accepting risks ceded by an
insurance undertaking or third-country insuranceundertaking, or by another reinsurance undertaking orthird-country reinsurance undertaking; or 
(b) the provision of cover by a reinsurance undertaking to
an institution that falls within the scope of Directive(EU) 2016/2341 of the European Parliament and of the
Council;
"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 asthe 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 inMalta:
Provided that, where a motor vehicle is dispatched
from a Member State or an EEA State into Malta, therisk is deemed to be situated in Malta, immediatelyupon acceptance of delivery by the purchaser for aperiod of thirty days, even though the vehicle has notbeen formally registered in Malta;
(c) in the case where the insurance relates to travel or
holiday risks, whatever the class concerned, any riskrelated to travel or holiday if the policy covering therisk is of a duration of four months or less and the
 10    CAP. 403. ]                    INSURANCE BUSINESS 
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 foregoingparagraph ( 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 theestablishment, to which the contract relates, is situatedin Malta;
"risk situated outside Malta" means a risk which is not a risk
situated in Malta;
Cap. 386."subsidiary" has the same meaning as is assigned to the term
"subsidiary undertaking" by the Companies Act;
"Solvency II Directive" means Directive 2009/138/EC of the
European Parliament and of the Council of 25 November 2009 onthe taking-up and pursuit of the business of Insurance andReinsurance (Solvency II) (recast), as amended from time to tim e,
and includes any delegated acts and any technical standards tha t
have been or may be issued thereunder;
"technical provisions" shall be construed in accordance with
article 18E;
"third country insurance undertaking" means an undertaking,
other than a European insurance undertaking, which would requir e
authorisation as an authorised insurance undertaking pursuant t o
article 7 as if its head office were situated in Malta;
"third country reinsurance undertaking" means an undertaking,
other than a European reinsurance undertaking, which wouldrequire authorisation as an authorised reinsurance undertaking in
accordance with article 7 as if its head office were situated i n
Malta;
"undertaking" refers to an undertaking whose head office is in
Malta or in a country outside Malta;
Cap. 386."undertaking whose head office is in Malta" means a limited
liability company formed and registered in Malta in accordancewith the Companies Act;
Cap. 252."working days" shall not include Saturdays and the days referre d
to in the National Holidays and Other Public Holidays Act.
Scope. (2) The objective of this Act is, in part, to transpose and
implement the provisions of:
(a) the Solvency II Directive;
(b) the Omnibus II Directive: Directive 2014/51/EU of the
European Parliament and of the Council of 16 April2014 amending Directives 2003/71/EC and 2009/138/EC and Regulations (EC) No 1060/2009, (EU) No1094/2010 and (EU) No 1095/2010 in respect of thepowers of the European Supervisory Authority(European Insurance and Occupational Pensions
Authority) and the European Supervisory Authority
(European Securities and Markets Authority);
                 INSURANCE BUSINESS          [CAP. 403.   1 1
(c) Directive 2009/103/EC of the European Parliament
and of the Council of 16 September 2009, relating toinsurance against civil liability in respect of the use ofmotor vehicles, and the enforcement of the obligationto insure against such liability, as amended from timeto time; and
(d) any other European Union Directives and Regulations
that may be issued and amended from time to timerelating to the regulation of and the prudentialrequirements applicable to insurance and reinsuranceundertakings,
and consequently this Act and any regulations and Insurance Rul es
issued thereunder shall be interpreted and applied accordingly.
(3) In this Act and in any regulations made thereunder, if there
is any conflict between the English and the Maltese texts, theEnglish text shall prevail.
PART II 
SUPERVISION OF BUSINESS OF INSURANCE
Competent 
authority.
Amended by:
XVII. 2002.237.Substituted by:XII. 2006.77;X. 2011.75.
Amended by:
XXXIII. 2015.5;XXVI.2018.62.3. It shall be the duty of the competent authority to carry out th e
functions assigned to it by or under this Act and any regulatio ns,
Insurance Rules or Conduct of Business Rules made thereunder an d to
ensure that insurance and reinsurance undertakings carrying on the
business of insurance in or from Malta comply with the provisio ns of
this Act and of any regulations made thereunder, with any Insur ance
Rules and Conduct of Business Rules made and directives issued by
the competent authority in virtue of this Act and of any regula tions
made thereunder and with the conditions specified in their resp ective
authorisation.
Powers and duties 
of the competent authority.
Amended by:
XVII. 2002.238;XII. 2006.78;X. 2011.76;XX. 2013.97.Substituted by:XXXIII. 2015.6.
Amended by:
XXVI.2018.63.4.(1) When carrying out its functions under this Act, the
competent authority shall, in particular, have regard to:
(a) the protection of insured persons, policy holders,
beneficiaries 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) Without prejudice to the generality of the foregoing, the
competent authority shall, in the exercise of its duties, take into
account the convergence in respect of supervisory tools andsupervisory practices in the application of this Act, and of th e
regulations and Insurance Rules made thereunder, pursuant to th e
Solvency II Directive.
(3) For the purpose of sub-article (2):
(a) the competent authority shall participate in the
activities of EIOPA;
(b) the competent authority shall comply with the
guidelines and recommendations issued by EIOPA inaccordance with Article 16 of Regulation (EU) No
 12    CAP. 403. ]                    INSURANCE BUSINESS 
1094/2010 and, if not, shall state the reasons for not
doing so; and
(c) national mandates conferred on the competent
authority shall not inhibit the performance of its duties
under this Act or as a member of EIOPA.
(4) The competent authority may make Insurance Rules and
Conduct of Business Rules as may be required for carrying into effect
any of the provisions of this Act and of any regulations madethereunder. The competent authority may amend or revoke suchInsurance Rules and, Conduct of Business Rules, and any amendme nt
or revocation thereof, shall be officially communicated to the persons
concerned.
(5) The competent authority may make, amend or revoke,
Insurance Rules and Conduct of Business Rules, as may be requir ed
for the purpose of implementing any guidelines, recommendationsissued by EIOPA under Article 16 of Regulation (EU) No 1094/201 0,
for the implementation of the Solvency II Directive.
(6) Insurance Rules shall be binding on authorised insurance and
reinsurance undertakings and others as may be specified therein .
Conduct of Business Rules shall be binding on authorised insura nce
undertakings and others as may be specified therein.
PART III 
AUTHORISATION FOR CARRYING ON BUSINESS 
OF INSURANCE
Classification of 
business of insurance and ancillary risks.
Amended by:
XVII. 2002.239;XII. 2006.79;XXXIII. 2015.7, 77.5.(1) Subject to the provisions of subarticle (2), for the
purposes of this Act, business of insurance is divided into lon g term
business and general business; and -
"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) An authorised insurance undertaking which has obtained an
authorisation for a principal risk belonging to one class or gr oup of
classes as specified in the Third Schedule may also insure risk s
included in another class in the said Schedule without the need  to
obtain authorisation in respect of such risks provided that the  risks
fulfil all the following conditions:
(a) they are connected with the principal risk;
(b) they concern the object which is covered against the
principal risk; and
(c) they are covered by the contract insuring the principal
risk. 
 (3) Notwithstanding the provisions of sub-article (2), the risk s
included in classes 14, 15 and 17 in Part I of the Third Schedu le
shall not be regarded as risks ancillary to other classes:
Provided that, legal expenses insurance as set out in class
17 may be regarded as a risk ancillary to class 18, where the
                 INSURANCE BUSINESS          [CAP. 403.   1 3
conditions laid down in sub-article (2) and either of the follo wing
conditions are fulfilled:
(a) the main risk relates solely to the assistance provided
for persons who fall into difficulties while travelling,while away from the home or their habitual residence;or
(b) the insurance concerns disputes or risks arising out of,
or in connection with, the use of sea-going vessels.
(4) For the purposes of this article, a contract of insurance is  to
be treated as falling within the Second Schedule, notwithstandi ng
the fact that it contains related and subsidiary provisions wit hin
general business class 1 or 2 of Part I of the Third Schedule t o the
Act, if its principal object is that of a contract falling with in the
Second Schedule to the Act and if such contract is effected orcarried out by an undertaking authorised under article 7 to car ry on
long term business class 1.
(5) The competent authority may, by an Insurance Rules made
for the purposes of this article, provide that general businesscontracts of insurance of a kind specified in the Insurance Rul es,
contain such conditions or include such requirements orarrangements as may be determined by such Insurance Rules.
Restriction on 
carrying on business of insurance.
Amended by:
XVII. 2002.240; XII. 2006.80;XXXIII. 2015.8.6.(1) No person shall carry on, nor hold itself out as carrying
on, in or from Malta business of insurance unless authorised by  the
competent authority.
(2) Sub-article (1) shall not apply to a European insurance
undertaking and a European reinsurance undertaking establishing  a
branch or providing services in Malta in exercise of a Europeanright.
(3) 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 notconstituting business of insurance for any or all of thepurposes of this Act;
(b) prescribing the persons who may carry out such
services and activities and the persons to or for whomsuch 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 theprovisions of this subarticle.
(4) In the event of a doubt as to whether an activity constitute s
business of insurance, or whether business of insurance is or i s not
being carried on in or from Malta, the matter shall be conclusi vely
determined by the competent authority.
 14    CAP. 403. ]                    INSURANCE BUSINESS 
Authorisation by 
competent authority for carrying on business of insurance.
Amended by:
XVII. 2002.241;XXXIII. 2015.9.7.(1) The competent authority may authorise an undertaking
to carry on under this Act - 
(a) in the case of an undertaking whose head office is in
Malta, in or from Malta or in or from a country outsideMalta;
(b) in the case of a third country insurance undertaking or
a third country reinsurance undertaking, in or fromMalta,
such of the classes of business of insurance specified in the S econd
or Third Schedule, or such parts of those classes, as may bespecified in the authorisation.
(2) An authorisation under this article may be restricted to
business of reinsurance; and an undertaking may not carry onbusiness of reinsurance by virtue of an authorisation under thi s
article unless the authorisation expressly extends to such busi ness.
(3) An authorisation issued under this article shall entitle an
undertaking whose head office is in Malta to carry on business of
insurance in a Member State or EEA State, in exercise of aEuropean right, subject to a notification to the competent auth ority
as determined in accordance with regulations made under article64.
(4) Without prejudice to article 5, an authorisation under this
article shall also be required if an undertaking, which holds a n
authorisation to carry on busine ss of insurance or reinsurance in a
class or classes of insurance, intends to extend its business t o a
class or to classes of business other than those classes for wh ich it
is already authorised.
(5) The competent authority shall have the power to require
any undertaking to provide such information as it may deemnecessary for the purpose of determining an application forauthorisation.
(6) An authorisation under this article shall only be issued if
the competent authority is satisfied, on the basis of the infor mation
required to be submitted under this Act and any informationreceived by it, that the authorisation ought to be granted.
(7) An authorisation issued under this article may identify
classes or part classes of general business by referring to theappropriate groups specified in Part II of the Third Schedule.
(8) Subject to the provisions of this Act, the competent
authority may subject an authorisation issued or held under thi s
article to such conditions as it may from time to time deem fit  to
impose.
(9) Subject to sub-article (10), the competent authority shall
determine an application for authorisation under this article w ithin
six months of receiving a properly completed application formtogether with the requisite documentation required to be submit ted
under this Act; and if it refuses to issue the authorisation it  shall
inform the applicant in writing of the reasons for the refusal.
(10) Where the authorisation sought is one restricted to
                 INSURANCE BUSINESS          [CAP. 403.   1 5
reinsurance, the period prescribed by sub-article (9) shall be of
three months.
(11)  The competent authority shall not consider the economic
needs of the market as a criterion when examining an applicatio n
for an authorisation.
(12) On the issue to an undertaking of an authorisation under
this article, any previous authorisation of that undertaking un der
this article shall lapse.
(13) The competent authority shall notify EIOPA of every
authorisation issued in terms of this article.
Authorisation 
requirements.
Amended by:
XVII. 2002.242;XII. 2006.81;L.N. 426 of 2007.Substituted by:XXXIII. 2015.10.8.(1) The competent authority shall not issue an
authorisation under article 7 unless it is satisfied that -
(a) an application for authorisation is made in writing by
an undertaking in such form and manner as thecompetent authority may from time to time determine;
(b) (i) in the case of an undertaking which intends to
carry on business not restricted to reinsurance,the undertaking’s objects are limited to businessof insurance and operations arising directlytherefrom, to the exclusion of all othercommercial business;
(ii) in the case of an undertaking which intends to
carry on business restricted to reinsurance, theundertaking’s objects are limited to the businessof reinsurance and related operations; this mayinclude a holding company function andactivities with respect to financial sectoractivities within the meaning of Article 2(8) ofDirective 2002/87/EC of the EuropeanParliament and of the Council of 16 December2002 on the supplementary supervision of creditinstitutions, insurance undertakings andinvestment firms in a financial conglomerate andamending Council Directives 73/239/EEC, 79/267/EEC, 92/49/EEC, 92/96/EEC, 93/6/EEC and93/22/EEC, and Directives 98/78/EC and 2000/12/EC of the European Parliament and of theCouncil, as amended from time to time;
(c) the undertaking has disclosed to the satisfaction of the
competent authority such information as the competentauthority has requested of it in relation to persons who
will, upon the authorisation of the undertaking, haveany proprietary, financial or other interest in, or inconnection with, that undertaking;
(d) the undertaking has disclosed the identities of the
shareholders, direct or indirect, whether natural orlegal persons who will have qualifying holdings in thatundertaking and the amounts of those holdings;
(e) all qualifying shareholders, directors, controllers and
 16    CAP. 403. ]                    INSURANCE BUSINESS 
all persons who will effectively direct or manage the
business of insurance are fit and proper persons toensure the sound and prudent management of theundertaking;
(f) the undertaking has submitted to the satisfaction of the
competent authority a scheme of operations whichshall include the particulars or proof as may bedetermined by Insurance Rules made for the purposeof this article;
(g) the undertaking holds eligible basic own funds to
cover the absolute floor of the Minimum CapitalRequirement in accordance with article 17;
(h) the undertaking shows evidence that it will be in a
position to hold eligible own funds to cover theSolvency Capital Requirement, in accordance witharticle 15, going forward;
(i) the undertaking shows evidence that it will be in a
position to hold eligible basic own funds to cover theMinimum Capital Requirement, in accordance witharticle 17, going forward;
(j) the undertaking shows evidence that it will be in a
position to comply with the system of governanceprovided for in article 18I.
(2) Without prejudice to article 5, an undertaking seeking
authorisation to extend its business of insurance to other clas ses or
to extend an authorisation covering only some of the riskspertaining to one class shall be required to:
(a) submit a scheme of operations referred to in sub-
article (1)( f);
(b) submit proof that it possesses eligible own funds to
cover the Solvency Capital Requirement and MinimumCapital Requirement in accordance with articles 15and 17 respectively.
(3) The competent authority shall not issue an authorisation
under article 7, where close links exist between an undertakingapplying for authorisation and any other natural or legal perso ns:
(a) if it considers that such close links prevent it from
effectively exercising its supervisory functions; and
(b) if it considers that the laws, regulations or
administrative provisions of a third country governingany one or more natural or legal persons with whomthe undertaking has close links or difficulties involvedin the enforcement of those measures, prevent it fromeffectively exercising its supervisory functions.
(4) For the purpose of ensuring compliance with the provisions
of sub-article (3)( a), the competent authority shall require
authorised insurance and reinsurance undertakings to provide itwith the information necessary for it to monitor compliance wit h
the conditions referred to in sub-article (3)( a) on a continuous
                 INSURANCE BUSINESS          [CAP. 403.   1 7
basis.
Combination of 
long term business and general business.
Amended by:
XVII. 2002.243;XII. 2006.82;XXXIII. 2015.11, 77.9.(1) Subject to sub-articles (2) and (3), the competent
authority shall not, under article 7, authorise an undertaking with
its head office in Malta to carry on both long term business an d
general business.
(2) Without prejudice to the provisions of sub-article (1) -
(a) an insurance undertaking authorised to carry on long
term business may be granted an authorisation to carryon general business for the risks listed in classes 1 and
2 of Part I of the Third Schedule; or
(b) an insurance undertaking authorised solely to carry on
general business of insurance for the risks listed inclasses 1 and 2 of Part I of the Third Schedule may begranted authorisation to carry on long term business;
or
(c) an insurance undertaking authorised solely to carry on
general business of insurance may be grantedauthorisation to carry on long term business restrictedto reinsurance.
(3) Without prejudice to the provisions of sub-article (4), the
provisions of this article shall not apply to an undertaking wh ich
holds an authorisation to carry on both long term business andgeneral business under this Act as in force immediately before the
coming into force of this Act.
(4) An undertaking authorised as aforesaid shall, in respect of
long term business and general business, be managed separately in
a manner as may be determined by Insurance Rules made for thepurpose of this article.
(5) An authorised insurance undertaking carrying on long term
business and seeking authorisation to extend its business to th e
risks listed in classes 1 or 2 of Part I of the Third Schedule shall
submit proof to the satisfaction of the competent authority tha t it:
(a) possesses the eligible basic own funds to cover the
absolute floor of the Minimum Capital Requirementfor undertakings authorised to carry on long termbusiness and the absolute floor of the MinimumCapital Requirement for undertakings authorised tocarry on general business, in accordance with article17; and
(b) undertakes to cover the minimum financial obligations
as determined in accordance with Insurance Rules,going forward. 
(6) An authorised insurance undertaking carrying on general
business for the risks listed in classes 1 or 2 of Part 1 of th e Third
Schedule and seeking authorisation to extend its business to lo ng
term business shall submit proof to the competent authority tha t it:
(a) possesses the eligible basic own funds to cover the
absolute floor of the Minimum Capital Requirement
 18    CAP. 403. ]                    INSURANCE BUSINESS 
for undertakings authorised to carry on long term
business and the absolute floor of the MinimumCapital Requirement for undertakings authorised tocarry on general business, in accordance with article17;
(b) undertakes to cover the minimum financial obligations
as determined in accordance with Insurance Rules,going forward.
(7) For the avoidance of doubt, an undertaking whose business
is restricted to reinsurance, may be granted an authorisation t o
carry on both general and long term business in all classes ofbusiness.
Applicants with 
head office in Malta.
Amended by:
XVII. 2002.244;XIII. 2004.111;XII. 2006.83;XXXIII. 2015.12.10. (1) The competent authority shall not issue an
authorisation under article 7 to an undertaking whose head offi ce is
in Malta, nor shall the competent authority permit such underta king
to hold the authorisation issued thereunder, unless it is satis fied that
the undertaking has fulfilled or complied with the requirements  of
article 8 and, where appropriate, of article 9.
(2) An undertaking 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 undertaking authorised as aforesaid shall carry on, nor holditself out as carrying on business of insurance in or from a co untry
outside Malta or open a branch, agency or office or set up oracquire any subsidiary in any country outside Malta.
Applicants with 
head office outside Malta.
Amended by:
XVII. 2002.245;XII. 2006.84;XX. 2007.127.Substituted by:XXXIII. 2015.13.
Amended by:
XXVI.2018.64.11. (1) The competent authority shall not issue an
authorisation under article 7 to a third country insuranceundertaking or third country reinsurance undertaking, nor shall  the
competent authority permit such undertaking to hold theauthorisation issued thereunder, unless the undertaking -
(a) is permitted in the country where its head office is
situated to carry on the business of insurance whichforms the object of the application;
(b) has in Malta at all times:
(i) a general representative fulfilling the
requirements of article 12; and
(ii) a branch;
(c) undertakes to set up at the place of management of the
branch, accounts specific to the business of insurancewhich it carries on in Malta, and to maintain there allthe records relating to the business carried on;
                 INSURANCE BUSINESS          [CAP. 403.   1 9
(d) undertakes to cover the Solvency Capital Requirement
and the Minimum Capital Requirement in accordancewith the requirements referred to in articles 15 and 17;
(e) submits a scheme of operations in accordance with
article 8(1)( f); and
(f) fulfils the governance requirements referred to in
article 18I.
(2) In relation to a branch of a third country insurance
undertaking or third country reinsurance undertaking, the busin ess
of insurance shall be carried on under the management of a pers on
fulfilling the following requirements of this sub-article:
(a) the person must be an individual resident in Malta or
an insurance manager who has been designated by theundertaking for the purpose of this article;
(b) the person must not be the approved auditor, or a
partner or an employee of the approved auditor, of theundertaking;
(c) the person possesses the qualifications and fulfils or
complies with the requirements determined byInsurance Rules made for the purpose of this article;and
(d) the person is fit and proper to ensure its sound and
prudent management.
(3) A third country insurance or reinsurance undertaking shall
be required to:
(a) establish adequate technical provisions to cover the
insurance and reinsurance obligations arising from thebusiness carried out by the branch in Malta, calculatedin accordance with Insurance Rules; and
(b) value assets and liabilities and determine own funds in
accordance with Insurance Rules.
(4) A third country insurance and reinsurance undertaking shall
be required to maintain in Malta at all times an amount of elig ible
own funds consisting of the items determined in accordance withInsurance Rules and deposit a specified proportion of such ownfunds as may be prescribed under article 18G.
(5) ( a) Branches of third country insurance undertakings shall
not simultaneously pursue long term business andgeneral business in Malta.
(b) For the avoidance of doubt, a branch of a third country
reinsurance undertaking may be granted anauthorisation to carry on both general and long termbusiness, in all classes of business, restricted toreinsurance.
(6) For the purposes of this article, "branch" means a
permanent presence in Malta of a third country insuranceundertaking or third country reinsurance undertaking, which hasreceived authorisation in Malta to carry on business of insuran ce in
 20    CAP. 403. ]                    INSURANCE BUSINESS 
Malta.
(7) The provisions of this article shall be without prejudice to
any agreements concluded by the European Community with one ormore third countries in terms of Article 171 of the Solvency IIDirective.
General 
representatives.
Amended by:
XIII. 2004.112;XXXIII. 2015.14.12. (1) The requirements referred to in article 11(1)( b)(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 undertaking’srepresentative 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 theundertaking;
(c) the representative must not be the approved auditor, or
a partner or an employee of the approved auditor, ofthe undertaking;
(d) if the representative is not an individual, it must be a
company whose head office is in Malta and must itselfhave an individual representative resident in Maltawho is authorised to act generally, and to acceptservice of any document, on behalf of the company, inits 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 d ebts
and obligations of the undertaking referred to in article 11.
Insurance agents 
and managers.13. Deleted by XII. 2006 .85.
Substituted by:
XXXIII. 2015.15.PART IV 
CONDITIONS FOR CARRYING ON BUSINESS 
OF INSURANCE
Title I: Financial Requirements
Own funds of 
authorised insurance and reinsurance undertakings..
Amended by:
XIII. 2004.113;XII. 2006.86;XX. 2007.128.Substituted by:XXXIII. 2015.15.14. (1) The own funds of an authorised insurance and
reinsurance undertaking shall comprise the sum of basic own fun ds
and ancillary own funds.
(2) The amounts of ancillary own fund items to be taken into
account when determining own funds shall be subject to the prio r
written approval of the competent authority.
(3) The competent authority shall issue Insurance Rules to
determine the items making up the basic own funds and ancillaryown funds, determine what constitutes surplus funds, provide fo r
the classification of own funds into tiers and the eligibility of the
own funds, and any other matter relating thereto.
                 INSURANCE BUSINESS          [CAP. 403.   2 1
Solvency Capital 
Requirement.
Amended by:
XII. 2006.87.Substituted by:XXXIII. 2015.15.15. (1) An authorised insurance and reinsurance undertaking
shall hold eligible own funds covering the Solvency CapitalRequirement.
(2) The Solvency Capital Requirement shall be calculated
either in accordance with the standard formula as set out inInsurance Rules or using a full or partial internal model asapproved by the competent authority. The process for the approv al
of the use of an internal model shall be set out in Insurance R ules.
(3) Where it is inappropriate for an authorised insurance or
reinsurance undertaking to calculate the Solvency CapitalRequirement in accordance with the standard formula, as set out  in
the Insurance Rules since the risk profile of the undertakingconcerned deviates significantly from the assumptions underlyin g
the standard formula calculation, the competent authority may, by
means of a decision stating the reasons, require the undertakin g
concerned to use an internal model to calculate the SolvencyCapital Requirement, or the relevant risk modules thereof.
Non-Compliance 
with the Solvency Capital Requirement.
Amended by:
XVII. 2002.246;XIII. 2004.114;XII. 2006.88.Substituted by:XXXIII. 2015.15.16. (1) An authorised insurance or reinsurance undertaking
which fails to comply with article 15 shall immediately inform the
competent authority as soon as it observes that the SolvencyCapital Requirement is no longer complied with, or where there is a
risk of non-compliance in the following three months.
(2) Within two months from the observation of non-compliance
with the Solvency Capital Requirement, the authorised insurance  or
reinsurance undertaking shall submit a realistic recovery plan in
accordance with Insurance Rules issued under article 18A forapproval by the competent authority.
(3) The competent authority shall require the undertaking
concerned to take the necessary measures to achieve, within sixmonths from the observation of non-compliance with the SolvencyCapital Requirement, the re-establishment of the level of eligi ble
own funds covering the Solvency Capital Requirement or thereduction of the risk profile of the undertaking to ensurecompliance with the Solvency Capital Requirement.
(4) The competent authority may, if appropriate, extend that
period by three months.
(5) The competent authority may issue Insurance Rules to
determine the circumstances within which the period set out in sub-
article (4) may be extended and the requirements to be compliedwith by the authorised insurance and reinsurance undertakings i n
such circumstances.
(6) In exceptional circumstances, where the competent
authority is of the opinion that the financial situation of theauthorised insurance or reinsurance undertaking concerned willdeteriorate further, it may also restrict or prohibit the free disposal
of the assets of that undertaking.
(7) Where the competent authority decides to restrict or
prohibit the free disposal of the assets of that undertaking, i t shall
inform the European regulatory authorities of the host Member
 22    CAP. 403. ]                    INSURANCE BUSINESS 
States or the overseas regulatory authorities of any measures i t has
taken. The competent authority may request those authoritiesconcerned to take the same measures, and shall designate the as sets
to be covered by such measures.
Minimum Capital  
Requirement.
Amended by:
XVII. 2002.247;XII. 2006.89.Substituted by:XXXIII. 2015.15.17. (1) An authorised insurance and reinsurance undertaking
shall hold eligible basic own funds to cover the Minimum Capita l
Requirement.
(2) The Minimum Capital Requirement shall be calculated in
accordance with Insurance Rules made for the purpose of thisarticle, and shall be not less than the amounts (the absolute f loor)
as determined by the said Insurance Rules.
Non-Compliance 
with Minimum Capital  Requirement.Substituted by:XXXIII. 2015.15.18. (1) An authorised insurance or reinsurance undertaking
which fails to comply with article 17 shall immediately inform the
competent authority where it observes that the Minimum CapitalRequirement is no longer complied with or where there is a risk  of
non-compliance in the following three months.
(2) Within one month from the observation of non-compliance
with the Minimum Capital Requirement, the undertaking concernedshall submit, for approval by the competent authority, a short- term
realistic finance scheme, in accordance with Insurance Rules is sued
under article 18A, to restore, within three months of thatobservation, the eligible basic own funds, at least to the leve l of the
Minimum Capital Requirement or to reduce its risk profile toensure compliance with the Minimum Capital Requirement.
(3) The competent authority may also restrict or prohibit the
free disposal of the assets of the undertaking concerned.
(4) Where the competent authority decides to restrict or
prohibit the free disposal of assets of the undertaking concern ed, it
shall inform the European regulatory authorities of the hostMember State or the overseas regulatory authorities, of anymeasures it has taken. The competent authority may request thos e
authorities concerned to take the same measures, and shalldesignate the assets to be covered by such measures.
Recovery plan and 
finance scheme.
Added by:
XXXIII. 2015.15.18A.  The particulars to be provided in the recovery plan and the
finance scheme required to be submitted pursuant to articles 16  and
18 shall be determined by Insurance Rules.
Identification and 
notification procedures.
Added by:
XXXIII. 2015.15.18B.  An authorised insurance or reinsurance undertaking shall
have procedures in place, including the use of early warningindicators, to identify deteriorating financial conditions and shall
immediately notify the competent authority when suchdeterioration occurs.
Powers of the 
competent authority in deteriorating financial conditions.
Added by:
XXXIII. 2015.15.18C.  (1) Notwithstanding the provisions of articles 16 and 18
and without prejudice to any of the measures that may be taken by
the competent authority pursuant  to article 28, where the solve ncy
position of the authorised insurance or reinsurance undertakingcontinues to deteriorate, the competent authority shall have th e
power to take all measures necessary to safeguard the interests  of
                 INSURANCE BUSINESS          [CAP. 403.   2 3
policyholders, in the case of contracts of insurance, or the
obligations arising out of contracts of reinsurance.
(2) In considering the measures to be taken, the competent
authority shall take into account the level and duration of thedeterioration of the solvency position of the undertakingconcerned.
Valuation of assets 
and liabilities.
Added by:
XXXIII. 2015.15.18D.  Authorised insurance and reinsurance undertakings shall
value their assets and liabilities in accordance with Insurance  Rules
made for the purposes of this Act.
Technical 
provisions.18E.  (1) Authorised insurance and reinsurance undertakings
shall establish and maintain technical provisions with respect to all
of their insurance and reinsurance obligations towardspolicyholders and insureds of insurance or reinsurance contract s.
(2) The value and calculation of technical provisions shall be
determined in accordance with Insurance Rules made for thepurposes of this article.
(3) Without prejudice to anything contained in any other
provisions under the Act, the competent authority may, whenever  it
deems it necessary, require the authorised insurance or reinsur ance
undertaking concerned to demonstrate the appropriateness of thelevel of the undertaking’s technical provisions, as well as, th e
applicability and relevance of the methods applied, and theadequacy of the underlying statistical data used.
(4) To the extent that the calculation of technical provisions o f
an authorised insurance or reinsurance undertaking does notcomply with the Insurance Rules made for the purposes of thisarticle, the competent authority may require the insurance orreinsurance undertaking concerned to increase the amount oftechnical provisions so that they correspond to the level deter mined
by such Insurance Rules.
(5) Where an authorised insurance or reinsurance undertaking
fails to comply with the provisions of this article, the compet ent
authority may prohibit the free disposal of its assets after ha ving
communicated its intentions to the European regulatory authorit y
of the host Member State or the overseas regulatory authority. The
competent authority shall designate the assets to be covered by
such measures.
Report on solvency 
and financial condition.
Added by:
XXXIII. 2015.15.18F.  (1) Without prejudice to the information which is to be
submitted to the competent authority pursuant to article 32, anauthorised insurance and reinsurance undertaking shall disclosepublicly, on an annual basis, a report on the undertaking’s sol vency
and financial condition. The report shall contain the informati on
determined by Insurance Rules made for the purposes of thisarticle.
(2) The competent authority shall, upon a written request by an
authorised insurance or reinsurance undertaking, permit anundertaking not to disclose information where:
(a) by disclosing such information, the competitors of the
 24    CAP. 403. ]                    INSURANCE BUSINESS 
undertaking concerned would gain significant undue
advantage;
(b) there are obligations to policyholders or other
counterparty relationships binding the undertakingconcerned to secrecy or confidentiality.
(3) Where non-disclosure of information is permitted by the
competent authority, the authorised insurance or reinsuranceundertaking concerned shall make a statement to this effect in its
report on solvency and financial condition and shall state thereasons.
(4) The competent authority shall permit an authorised
insurance or reinsurance undertaking to make use of or refer topublic disclosures made under other legal or regulatoryrequirements, to the extent that those disclosures are equivale nt to
the information required to be submitted under sub-article (1) in
both their nature and scope.
(5) Where the reason for any permitted non-disclosure obtained
pursuant to sub-article (2) ceases to exist, the undertakingconcerned shall inform the competent authority without unduedelay and such undertaking shall comply with the obligationsarising under sub-article (1).
(6) In the event of any major development affecting
significantly the relevance of the information disclosed inaccordance with this article, an authorised insurance or reinsu rance
undertaking shall disclose appropriate information on the natur e
and effects of that major development. The circumstancesconsidered as major developments and the disclosures to be madeby the undertaking in such circumstances shall be determined byInsurance Rules.
(7) An authorised insurance and reinsurance undertaking may
disclose, on a voluntary basis, any information or explanationrelated to their solvency and financial condition which is notalready required to be disclosed in accordance with this articl e.
Custody of assets 
required to be maintained in Malta.
Added by:
XXXIII. 2015.15.
Amended by:
XXVI.2018.65.18G.  (1) The competent authority may, with respect to assets
which an undertaking is required by or under this Act to mainta in in
Malta, impose an additional requirement that the whole or aspecified proportion of such assets shall be deposited with and  held
in custody for the undertaking’s account by a person as may beprescribed by regulations made for the purposes of this articleunless that requirement is otherwise imposed by any otherprovision of this Act; and the competent authority shall at all  times
have the right to demand from such person any information it ma y
require to ensure that the provisions of this article are beingcomplied with.
(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 insuch form and manner to the satisfaction of the competent autho rity
subject to such regulations as may be prescribed for such purpo se
under this Act.
                 INSURANCE BUSINESS          [CAP. 403.   2 5
(3) Any provision by or under this Act requiring an
undertaking to maintain in Malta assets of any kind or amount m ay
be satisfied by the undertaking if the undertaking produces asecurity in a form and manner to the satisfaction of the compet ent
authority subject to such regulations as may be prescribed for such
purpose under this Act.
(4) The assets required to be maintained in Malta by or under
this Act shall not be transferred, withdrawn or in any wayencumbered without the permission of the competent authoritygiven in writing or until the undertaking has ceased to carry o n 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.
Substituted by:
XXVI.2018.66.Title II: Governance
Responsibility of the Board of Directors.
Added by:
XXXIII. 2015.15.
Amended by:
XXVI.2018.67.18H. The Board of Directors of an authorised insurance or
reinsurance undertaking shall be ultimately responsible for thecompliance by the undertaking concerned with the Act, regulatio ns,
Insurance Rules and where applicable, Conduct of Business Rulesissued thereunder, including any other obligations pursuant to the
Solvency II Directive.
System of 
governance.
Added by:
XXXIII. 2015.15.18I. (1) Authorised insurance and reinsurance undertakings
shall be required to have in place an effective system of gover nance
which provides for sound and prudent management of the businessof the undertaking. The system of governance requirements shall  be
laid down in Insurance Rules.
(2) An authorised insurance and reinsurance undertaking shall:
(a) ensure that all persons who effectively run the
undertaking or have other key functions, at all times,satisfy the fit and proper criteria;
(b) have in place an effective risk management system,
including a risk management function;
(c) as part of its risk management system, conduct its own
risk and solvency assessment;
(d) have in place an effective internal control system,
which shall include a compliance function;
(e) provide for an effective internal audit function;
(f) provide for an effective actuarial function; and
(g) if it outsources any of its functions or any insurance or
reinsurance activities, remain fully responsible fordischarging all of its obligations under this Act.
(3) The systems and functions referred to in sub-article (2)
shall be determined by Insurance Rules.
(4) The system of governance shall be proportionate to the
nature, scale and complexity of the operations of the authorise d
insurance or reinsurance undertaking.
PART V 
 26    CAP. 403. ]                    INSURANCE BUSINESS 
ACCOUNTS, ACTUARIAL INVESTIGATIONS AND 
FINANCIAL STATEMENTS
Financial year of 
authorised undertakings.
Amended by:
XXXIII. 2015.16.19. (1) Every undertaking whose head office is in Malta
applying for authorisation under article 7 of this Act to carry  on
business of insurance in or from Malta shall notify in writing the
competent authority of its financial year; and, failing such no tice,
the undertaking’s financial year shall terminate on the thirty- first
day of December of each year.
(2) No undertaking 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 third country insurance or reinsurance undertaking
applying for authorisation under article 7 to carry on business  of
insurance in or from Malta, shall notify in writing the compete nt
authority of its financial year; and where an authorised undert aking
as aforesaid alters its financial year it shall forthwith notif y in
writing the competent authority of such change.
(4) For the purposes of this Act, financial year -
Cap. 386.(a) in relation to an authorised undertaking whose head
office is in Malta, means an accounting period as isconstrued in accordance with articles 164 to 166 of the
Companies Act;
(b) in relation to a third country insurance or reinsurance
undertaking, means an accounting period as isconstrued in accordance with the provisions of thelaws of the country where the head office of theundertaking is situated governing the accountingperiod of such undertakings.
Drawing up and 
publication of audited financial statement.
Amended by:
XVII. 2002.248;XII. 2006.90;XX. 2007.129;XXXIII. 2015.17.20. (1) Subject to the following sub-articles, every
undertaking authorised under this Act shall, within the periodstipulated by regulations made or Insurance Rules issued underarticle 32 or at any other time as may be authorised in writing  by
the competent authority -
(a) forward to the competent authority; and
(b) exhibit in a conspicuous position in each of its offices,
agencies and branches in Malta and keep so exhibitedthroughout the following twelve months,
a copy of its audited financial statements drawn up -
(i) in the case of an undertaking whose head office
is in Malta, in accordance with Insurance Rulesmade for the purposes of this article; and
(ii) in the case of a third country insurance or
reinsurance undertaking, in accordance with theprovisions of the laws of the country where thehead office of the undertaking is situatedgoverning the financial statements of suchundertakings.
(1A) The undertaking shall provide a copy of its audited
                 INSURANCE BUSINESS          [CAP. 403.   2 7
financial statements to any person applying for such copy:
Provided that the undertaking may charge such reasonable
fees not exceeding the administrative costs incurred in produci ng
such copy.
(2) In the case of an undertaking whose head office is in Malta,
sub-article (1)( b) shall apply as respects the undertaking’s offices,
agencies and branches in a country outside Malta in the samemanner and to the same extent as it applies to its offices, age ncies
and branches in Malta.
(3) The audited financial statements shall be drawn up and
published in such manner and form as may be specified inInsurance Rules.
Appointment, 
duties and termination of appointment of auditors.
Amended by:
XII. 2006.91;XXXIII.2015.18,77XXVI.2018.68.21. (1) Every undertaking authorised under this Act shall
every year appoint an approved auditor as auditor to theundertaking whose duty shall be to report on the financialstatements of the undertaking examined by him and on financialstatements prepared by the undertaking.
(2) If an authorised undertaking fails to appoint an auditor as
required by subarticle (1), or at any time fails to fill any va cancy in
the office of auditor, the competent authority shall have the p ower
to appoint an auditor for that undertaking and shall fix theremuneration to be paid by that undertaking to such auditor.
(3) The auditor’s report shall include a statement on compliance
by the enrolled person with requirements specified by means ofInsurance Rules made for the purposes of this article, which ma y also
specify the information to be contained in such statement.
(4) Every auditor of an authorised undertaking shall have the
right to demand such information or explanation as he deemsnecessary in the performance of his duties from any officer oremployee of, or any person under an appointment from, thatundertaking.
(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 th e
reasons for so doing.
(6) An authorised undertaking shall give notice in writing to
the competent authority immediately it receives notice of aresolution intended to be put before the undertaking’s annualgeneral meeting to appoint as an auditor a person other than th e
retiring auditor or otherwise providing expressly that the reti ring
auditor shall not be reappointed.
(7) Where, for any reason whatever, the appointment of an
auditor comes to an end, the authorised undertaking shall, not later
than fourteen days from the termination of such appointment, gi ve
 28    CAP. 403. ]                    INSURANCE BUSINESS 
notice in writing to the competent authority stating reasons fo r such
termination.
(8) The competent authority may require an authorised
undertaking to change its appointed auditor where, in thecompetent authority’s opinion, such auditor is considered unfit  for
this appointment, at any time during his term of office.
(9) Before requiring an authorised undertaking to change its
appointed auditor in the circumstances mentioned in subarticle (8),
the competent authority shall notify in writing its intention t o the
undertaking and the auditor concerned stating reasons for requi ring
such change and giving the auditor the opportunity to submit inwriting within fourteen days from the date of serving of such n otice
reason why its appointment with the undertaking should not beterminated.
Cap. 386.(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
Companies Act, and holds the authorisation 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 thir d
country insurance or reinsurance undertaking authorised asaforesaid, approve such alternative arrangements as it thinksreasonable and which do not materially detract from the mainobjects of this article, and where such arrangements have beencarried out, the provisions of this article shall not apply to the
extent that they are replaced by such arrangements.
Cap. 386.(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 inconsis tency,
not apply to authorised undertakings as aforesaid.
Appointment of 
actuary by an undertaking with long term business.
Amended by:
III. 2009.25;XXXIII. 2015.19.22. (1) Every authorised insurance undertaking carrying on
long term with-profits business in terms of classes I and III a s
specified in the Second Schedule shall - 
(a) within thirty days of beginning to carry on such
business, appoint an approved actuary as actuary to theundertaking to perform the with-profits actuaryfunction in respect of the said classes of its with-profits business, (if any);
(b) whenever the appointment comes to an end, within
thirty days of such termination, make a newappointment.
(2) An undertaking making an appointment under subarticle (1)
shall, within fourteen days, inform the competent authority inwriting stating that fact, the date of such appointment and the  name
and qualifications of the person appointed; and if an appointme nt
under that subarticle comes to an end, the undertaking shall, w ithin
fourteen days, inform the authority in writing stating that fac t, the
                 INSURANCE BUSINESS          [CAP. 403.   2 9
name of the person concerned and the reasons for such terminati on.
(3) If, on the expiry of any period specified in sub-article (1) ,
the undertaking fails to make the required appointment, theundertaking shall not effect and carry out any new long termcontracts of insurance in terms of the classes specified in sub -
article (1) until the appointment is made.
(4) Notwithstanding the provisions of subarticle (2), the
competent authority may, within fourteen days of receiving a no tice
of termination of an appointment of an approved actuary, reques t in
writing the approved actuary concerned to give in writing thereasons for such termination; and the actuary shall, within fou rteen
days, give reasons in writing.
(5) For the purposes of this Act, an approved actuary is a
person who -
(a) does not hold a role or perform a function on behalf of
the undertaking which could give rise to a significantconflict of interest;
(b) is a Fellow of an Institute of Actuaries, or a Fellow of
a Faculty of Actuaries, or holds actuarial qualificationsof similar standing of an institute of repute recognisedfor such purposes by the competent authority and hasthe required skill and holds appropriate practicalexperience to perform his functions as an actuary; and
(c) holds the competent authority’s approval to act as
actuary to perform the with-profits actuary function asset out in article 23.
Periodic actuarial 
investigation of an undertaking with long term business.
Amended by:
XVII. 2002.249;XII. 2006.92;
XXXIII. 2015.20.23. (1) Every authorised insurance undertaking carrying on
long term with-profits business in terms of classes I and III a s
specified in the Second Schedule shall, at the close of its fin ancial
year, require the approved actuary to provide a report in respe ct of
the period covered by the report affecting those classes of wit h-
profits business of the undertaking.
(2) The information to be provided in the report shall be
determined by Insurance Rules issued by the competent authorityfor the purposes of this article.
(3) The actuary’s report shall be forwarded by the undertaking
concerned to the competent authority, together with the auditedfinancial statements of the undertaking required to be forwarde d
under article 20.
(4) Notwithstanding anything contained in any of the foregoing
subarticles, in the case of a third country insurance undertaki ng
authorised to carry on long term with-profits business in terms  of
classes I and III as specified in the Second Schedule, the comp etent
authority may approve such alternative arrangements as it think s
reasonable and which do not materially detract from the mainobjects of this article, and where such arrangements have beencarried out, the provisions of this article shall not apply to the
extent that they are replaced by such arrangements.
 30    CAP. 403. ]                    INSURANCE BUSINESS 
Obligations of 
auditors and actuaries to the competent authority.
Amended by:
XVII. 2002.250.Substituted by:XXXIII. 2015.21.24. (1) An auditor or an actuary of an authorised insurance or
reinsurance undertaking or of a branch in Malta of a third coun try
insurance or reinsurance undertaking shall have the duty to rep ort
immediately to the competent authority any fact or decisionconcerning that undertaking of which he becomes aware of in hiscapacity as auditor or actuary of any such authorised insurance  or
reinsurance undertaking or of any such branch which relates to any
matter which may be prescribed or is likely to bring about thefollowing:
(a) a serious qualification, or refusal, of the auditor’s
report on the accounts of the undertaking or thebranch; or
(b) a grave impairment of the undertaking’s ability to
continue as a going concern; or
(c) a material breach of the provisions of this Act,
regulations or any Insurance Rules which lay down theconditions governing authorisation or whichspecifically govern the carrying on of business ofinsurance by an authorised undertaking or branch; or
(d) non-compliance with the Solvency Capital
Requirement; or
(e) non-compliance with the Minimum Capital
Requirement.
(2) The auditor or actuary, as the case may be, shall likewise
have a duty to report to the competent authority any facts ordecisions of which he becomes aware of in the course of carryin g
out his duties which relate to or have a serious adverse effect  upon
the insured, the policyholder or any other interested person re lating
to the undertaking or the branch in Malta of a third countryinsurance or reinsurance undertaking of which he becomes awareof in his capacity as auditor or actuary to an undertaking havi ng
close links with an authorised insurance or reinsuranceundertaking.
(3) Without prejudice to any provision contained in this Act,
the competent authority may request the auditor or the actuary,  as
the case may be, to provide it with such information anddocumentation relating to any fact or decision as specified in sub-
articles (1) or (2) concerning the authorised insurance orreinsurance undertaking or branch in Malta of a third countryinsurance or reinsurance undertaking.
PART VI
POWERS OF INTERVENTION
Automatic 
revocation of an authorisation.
Amended by:
XXXIII. 2015.22. 25. An authorisation issued or held under this Act shall
automatically be revoked if the authorised insurance or reinsur ance
undertaking -
(a) is declared bankrupt or goes into liquidation or makes
a composition with its creditors or is otherwisedissolved; or
                 INSURANCE BUSINESS          [CAP. 403.   3 1
(b) has ceased to operate as a result of a merger with
another undertaking carrying on business of insuranceor for any other reason whatsoever; or
(c) is a third country insurance or reinsurance
undertaking, and the overseas regulatory authority inthe country of registration, incorporation orconstitution withdraws the authorisation from theundertaking.
Power of the 
competent authority to suspend or revoke an authorisation.
Amended by:
XVII. 2002.251;XII. 2006.93;XXXIII.2015.23,77XXVI.2018.69.26. Without prejudice to anything contained in any other
provision of this Act, the competent authority may at any timesuspend or revoke an authorisation issued or held under this Ac t if -
(a) any document or information accompanying an
application for authorisation, or any information givenin connection therewith, is false, incorrect ormisleading in any material particular, or if theauthorised insurance or reinsurance undertaking hasconcealed, or conceals from, or fails to notify to thecompetent authority any document or information orchange therein which it was its duty to reveal or tonotify under this Act and any regulations,  Insurance
Rules or Conduct of Business Rules made thereunder; or
(b) the authorised insurance or reinsurance undertaking
ceases to carry on the business for which theauthorisation was issued for more than six months; or
(c) the authorised insurance or reinsurance undertaking
suspends payment or is about to suspend payment; or
(d) it considers that the authorised insurance or
reinsurance undertaking does not fulfil or comply withthe requirements of, or has contravened, any of theprovisions of this Act and any regulations madethereunder, or any Insurance Rules or any applicable
Conduct of Business Rules, or, or has failed to satisfy or
comply with any condition to which it or theauthorisation held by it is subject by virtue of or under
this Act; or
(e) it considers 
that any of the directors, the controllers
and any other person who effectively directs the
business the undertaking is authorised to carry on is nolonger a fit and proper person to ensure its sound andprudent management; or
(f) it receives a written request so to do from the
authorised insurance or reinsurance undertaking; or
(g) the authorised insurance or reinsurance undertaking
does not commence to carry on business pursuant tothe authorisation within twelve months of its issue; or
(h) the authorised insurance or reinsurance undertaking no
longer possesses sufficient own funds as determined inarticle 14; or
(i) the authorised insurance or reinsurance undertaking
 32    CAP. 403. ]                    INSURANCE BUSINESS 
does not comply with the Minimum Capital
Requirement and the competent authority considersthat the finance scheme submitted is manifestlyinadequate or the undertaking concerned fails tocomply with the approved scheme within three monthsfrom the observation of non-compliance with theMinimum Capital Requirement;
(j) the authorised insurance or reinsurance undertaking is
likely to become unable to meet its obligations or canno longer be relied upon to fulfil or satisfy itsobligations towards insureds, policyholders, creditorsor other interested persons; or
(k) close links exist between the authorised insurance or
reinsurance undertaking and another person, and thecompetent authority is prevented from exercising itssupervisory functions effectively either by reason ofthose close links or by reason of any law, regulation oradministrative provision of a country outside Maltagoverning that other person, or by reason of difficultyin their enforcement; or
(ka) the authorised insurance undertaking fails to comply with
the conduct of business requirements in relation to thedistribution of an insurance-based investment product or inrelation to the distribution of any insurance product otherthan an insurance-based investment product, set out inConduct of Business Rules; or
(l) any of the circumstances under which the competent
authority would have been precluded from issuing anauthorisation under this Act, materialises itself orwhere under this Act it would have been entitled torefuse to issue such authorisation.
Notification of 
suspension or revocation of an authorisation.
Amended by:
XXXIII. 2015.24;
V .2020.27.27. (1) Subject to the following provisions of this article,
where the competent authority intends to suspend or revoke anauthorisation pursuant to article 26, it shall give the underta king
concerned notice in writing setting out the reasons for its int ention
to do so.
(2) Every notice given under subarticle (1) shall state that the
undertaking 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 thirty days), m ake
representations in writing to the competent authority giving re asons
why the authorisation should not be suspended or revoked and th e
competent authority shall consider any representations so madebefore arriving at a final decision.
(3) The competent authority shall notify in writing its final
decision to the undertaking concerned.
(4) An authorisation issued to a third country insurance or
reinsurance undertaking may only be revoked after consultationwith the overseas regulatory authority of the country ofregistration, incorporation or constitution, unless the compete nt
                 INSURANCE BUSINESS          [CAP. 403.   3 3
authority decides that the matter is urgent or that there are
circumstances which make such prior consultation inappropriate.
(5) In the case of a suspension or a revocation of an
authorisation of an undertaking whose head office is in Malta, the
competent authority shall:
(a) notify the European regulatory authorities accordingly
in order to enable them to take appropriate measures toprevent the insurance or reinsurance undertaking from
commencing new operations within their territories;
(b) inform accordingly the overseas regulatory authority
of any state in which the undertaking or itssubsidiaries are carrying on the business of insurance.
(6) The competent authority shall notify EIOPA of any
revocation of authorisation in terms of the Act.
Power of the 
competent authority to protect the public interest.
Amended by:
XVII. 2002.252;XIII. 2004.115;XII. 2006.94;XXXIII. 2015.25;V .2020.43.28. (1) Without prejudice to the powers conferred to the
competent authority under article 26, the competent authority, may,
where it is satisfied that sufficient serious circumstances exi st,
proceed to take any one or more of the following measures:
(a) require the undertaking forthwith to take such steps as
the competent authority may consider necessary torectify or remedy the matter;
(b) appoint a person to advise the undertaking in the
proper conduct of its business;
(c) restrict the free disposal of the assets of the authorised
insurance undertaking, to safeguard the interests of theinsured persons;
(d) appoint a person to take charge of the assets of the
undertaking, or any portion of them, for the purposesof safeguarding the interests of insureds, policyholdersand legitimate creditors of the undertaking;
(e) appoint a person to assume control of the business of
the undertaking either to carry on that business or tocarry out such other function or functions in respect of
such business, or part thereof, including to take the
necessary action for the undertaking to be dissolved andwound up, as the competent authority may direct;
(f) issue an order for the dissolution and winding up of the
undertaking or, in the case of a third country insuranceor reinsurance undertaking, for the winding up of itsbusiness in Malta;
(g) appoint a competent person to act as liquidator for the
purpose of winding up the affairs of the undertaking;
(h) fix the remuneration to be paid by the undertaking to
any person appointed under this article;
(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 aforesai d,
 34    CAP. 403. ]                    INSURANCE BUSINESS 
the competent authority may further proceed in any one or more of
such manners, whether in addition thereto or in substitutiontherefor.
(2) Where a person is appointed by the competent authority -
(a) under subarticle (1)( b), it shall be the duty of the
undertaking to act in accordance with the advice givenby such person unless and until the competentauthority, on representation made to it, directsotherwise;
(b) under sub-article (1)( d), the undertaking shall deliver
to such person all the assets of which he is placed incharge, and all the powers, functions and duties of theundertaking in respect of those assets, whetherexercisable by the undertaking in general meetings, orby the directors, or by any other person, including thelegal and judicial representation of the undertaking,shall be exercisable by and vest in the personappointed under the said paragraph to the exclusion ofany other person;
(c) under sub-article (1)( e), the undertaking shall submit
its business to the control of such person and shallprovide him with such facilities as he may require theundertaking to provide him to carry on that business orto carry out the functions assigned to him under thesaid paragraph; and all the powers, functions andduties of the undertaking, whether exercisable by theundertaking in general meeting, or by the directors, orby any other person, including for the purposes of thedissolution and winding up of the undertaking as well asthe legal and judicial representation of the undertaking inall matters, shall be exercisable by and vest in him tothe exclusion of any other person;
(d) under sub-article (1)( g) such person shall be the
liquidator of the undertaking for all purposes of law tothe exclusion of any other person:
Provided that the competent person shall not take any
decision for the purpose of the dissolution and windingup of the undertaking, unless the competent authorityissues a directive to that effect in terms of article 31A ofthe Act, and any such directive may contain suchinstructions, requirements and conditions as thecompetent authority may consider necessary, includingwith regard to the mode of winding up.
Cap. 386.(2A)  Without prejudice to the powers of the competent authorit y
in terms of sub-article (1), the competent authority may also s ubmit
an application to the court for the dissolution and winding up by the
court of an undertaking, where it appears to the competentauthority that an undertaking should be dissolved and wound up by
the court for the reason set out in article 214(2)(b)(iii) of t he
Companies Act, and where the court accedes to the application, the
relevant provisions of the Companies Act in relation to the
                 INSURANCE BUSINESS          [CAP. 403.   3 5
dissolution and winding up by the court and any other applicabl e
provisions of any other law shall apply.
(3) In the case of a third country insurance or reinsurance
undertaking, the branches and offices in Malta of that undertak ing
shall, if the competent authority so directs and to the extent it so
directs, be deemed to constitute a separate undertaking.
Cap. 330 (4) The provisions of article 16(8) of the Malta Financial
Services Authority Act shall apply mutatis mutandis  to  any
administrative or disciplinary sanction or measure, of whatevertype, including reprimands or warnings, imposed or decided by t he
competent authority under this Act, and any regulations madethereunder or any Insurance Rules.
 (5) The competent authority may require the undertaking
concerned to pay all the expenses of, and incidental to, thepublication or issue of public statements or notices pursuant t o this
article or such part thereof as it may deem appropriate; and an y sum
so due shall be recoverable by the competent authority in the s ame
manner as an administrative penalty imposed under this Act.
(6) Any measure adopted in terms of sub-article (1) shall remai n
in force notwithstanding that an undertaking ceases to hold anauthorisation licence for whatever reason, unless the competentauthority otherwise directs.
PART VII 
Substituted by:
XXIII. 2015.26.SUPERVISION OF AUTHORISED INSURANCE AND 
REINSURANCE UNDERTAKINGS
Power of the 
competent authority to require information.
Amended by:
XVII. 2002.253;XXIII. 2015.27;XXVI.2018.70.29. (1) Without prejudice to anything contained in any other
provision of this Act which requires an authorised insurance orreinsurance undertaking to furnish to the competent authority a ny
information or documentation, the competent authority may, bynotice in writing,require any such undertaking or any person wh o is
or was carrying out business of insurance, or who appears to be  or
have been carrying on business of  insurance, or who appears to be in
possession of any relevant information and, or documentation to  do
all or any of the following:
(a) to furnish to it, at such time and place and in such form
as it may specify, such information and documentationas it may require including existing telephone andexisting data traffic records, with respect to thebusiness such undertaking is authorised to carry on; orwith respect to any person with whom the undertakinghas close links;
(b) to furnish to it any information or documentation
aforesaid verified in such manner and in suchlanguage, as it may specify;
(c) to attend before it, or before a person appointed by it,
at such time and place as it may specify, to answerquestions and provide information and documentationwith respect to any such business as aforesaid.
 36    CAP. 403. ]                    INSURANCE BUSINESS 
(2) The competent authority may take copies of any documents
furnished or provided under this article or extracts from them.
(3) Where an authorised insurance or reinsurance undertaking
required to provide information or documentation under this art icle
does not have the relevant information or documentation, it sha ll
disclose to the competent authority where, to the best of itsknowledge, that information or documentation is, and thecompetent authority may require any person, including a person to
which the undertaking has outsourced any activities or function s,
whether indicated 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 inevidence against the person making the statement or providing t he
documentation as well as against any person to whom they relate .
Cap. 9.(5) The provisions of this article shall not apply to informatio n
or documentation which is privileged in accordance with theprovisions 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 or charge claimed by any person in relation to suchdocumentation.
(7) Where the competent authority has appointed a person
under subarticle (1)( c), such person shall, for the purposes of
carrying out his functions under his appointment, have all thepowers conferred on the competent authority by this article and  a
requirement made by him shall be deemed to be and have the sameforce and effect as a requirement of the competent authority.
Cap. 204(8) Without prejudice to the other provisions of this article, a n
authorised insurance or reinsurance undertaking may be requiredby the competent authority to submit to the Central Bank of Mal ta
such information as the Bank may reasonably require for thedischarge of its duties under the Central Bank of Malta Act.
Power of the 
competent authority to examine the affairs of authorised undertakings and service providers.
Amended by:
XII. 2006.95;XXXIII. 2015.28;XXVI. 2018.71.Cap. 386.30. (1) Without prejudice to the provisions of the Companies
Act relating to the investigation of undertakings, the competent
authority may, whenever it deems it necessary or expedient,appoint one or more inspectors to investigate and report on theaffairs of an authorised insurance or reinsurance undertaking a nd 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 anyrequirement made by him shall be deemed to be andhave the same force and effect as a requirement of thecompetent authority;
(b) may, and if so directed by the competent authority
shall, make interim reports and on the conclusion ofhis examination shall make a final report to the saidauthority.
                 INSURANCE BUSINESS          [CAP. 403.   3 7
(3) The competent authority may forward to the authorised
insurance or reinsurance undertaking concerned a copy of anyreport, or any part thereof, made by an inspector in respect of  its
affairs.
(4) Where the affairs of an authorised insurance or reinsurance
undertaking are under examination, it shall be the duty of allofficers and agents of the undertaking to produce to an inspect or all
books and documents of or relating to the undertaking andotherwise to give to an inspector all assistance in connection with
the examination which they are reasonably able to give; and if an
officer or an agent of the undertaking refuses to produce any b ooks
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 inspec tor
with respect to the affairs of the undertaking, an inspector sh all
refer the matter to the competent authority and the competentauthority shall thereupon enquire into the case and take approp riate
action as it deems necessary.
(5) An inspector shall also be given access to any accounts,
returns or other information relating to an authorised insuranc e or
reinsurance undertaking whose affairs are under examination whi ch
are in the possession or under the control of the competentauthority.
(6) Where the information relating to an authorised insurance
or reinsurance undertaking is in any language other than Maltes e or
English, the competent authority or any inspector appointed by it,
may require that such information be submitted in either theEnglish or Maltese language.
(7) ( a) Where an authorised insurance or reinsurance
undertaking outsources a function or activity, thecompetent authority shall have effective access to thebusiness premises of the service provider and must beable to exercise those rights of access.
(b) Where the service provider is located in a Member
State or EEA State, other than Malta, the competentauthority shall inform the appropriate authority of theMember State or EEA State of the service providerprior to conducting an on-site inspection at thepremises of the service provider. In the case of a non-supervised entity, the appropriate authority shall be theEuropean regulatory authority concerned. Thecompetent authority may delegate such on-siteinspections to the European regulatory authority of theMember State or EEA State where the service provideris located.
(8) Where the competent authority has informed the European
regulatory authority that it intends to carry out an on-site in spection
in accordance with sub-article (7), or where it carries out an on-site
inspection in accordance with the said sub-article, where thecompetent authority is unable in practice to exercise its right  to
carry out that on-site inspection, the competent authority may refer
the matter to EIOPA and request its assistance in accordance wi th
 38    CAP. 403. ]                    INSURANCE BUSINESS 
Article 19 of Regulation (EU) No 1094/2010.
(9) 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 the undertaking concerned; and any sum so due shall berecoverable by the competent authority in the same manner as anadministrative penalty imposed under this Act.
Cap. 487.(10) In this article, any reference to officers or to agents sha ll
include a reference to former as well as present officers or ag ents
and the expression "agents", in relation to an authorised insur ance
or reinsurance undertaking, shall include persons registered orenrolled under the 
Insurance Distribution Act, or registered with an
authority or body in the Member State or EEA State responsible for the
supervision of intermediaries and ancillary insurance intermedi aries
acting for the undertaking, the bankers, the auditors and, in the case
of an undertaking authorised to carry on long term business, th e
actuary of the undertaking and a person as may be prescribed byregulations made for the purposes of article 18G.
(11)  The powers available to the competent authority pursuant
to articles 29 to 31A with regard to authorised insurance andreinsurance undertakings shall also be available with regard to  the
outsourced activities of such undertakings.
(12) The provisions of sub-article (7) shall apply mutatis
mutandis  where the service provider is located in a country outside
Malta, which is not a Member State or EEA State.
Right of entry to 
obtain information and documents.
Amended by:
XXXIII. 2015.29;V .2020.44.Cap. 386.31. (1) Without prejudice to the provisions of the Companies
Act, relating to the entry and search of premises, any officer,
employee or agent of the competent authority, on producing, ifrequired, evidence of his authority, may enter premises occupie d by
a person on whom a notice has been served under article 29 orwhose affairs are being investigated under article 30, for thepurpose of obtaining there the information or documents require d
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 a s is
referred to in subarticle (1) were served it would not be compl ied
with or that any documents to which it could relate would beremoved, tampered with or destroyed, such person may, onproducing evidence of his authority, enter any premises referre d to
in subarticle (1) for the purpose of obtaining there any inform ation
or documents specified in the notice, being information or docu ments
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 assistanc e of
the Commissioner of Police, who may for such purpose exercisesuch 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
                 INSURANCE BUSINESS          [CAP. 403.   3 9
involves premises that are occupied for the purpose of habitati on,
such entry shall be carried out in the presence of an officer o f 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.
Amended by:
XXXIII. 2015.30;V .2020.45. 31A.  (1) Without prejudice to any of the powers conferred to it
under this Act, the competent authority may, whenever it deems it
necessary, give, by notice in writing, such directives as it ma y deem
appropriate in the circumstances, and any person to whom or towhich the notice is given shall obey, comply with and otherwisegive effect to any such directive within the time and in the ma nner
stated in the directive or any further directive:
Provided that the competent authority may give any such
directive even where an undertaking, for whatever reason, cease s to
hold an authorisation granted in terms of this Act:
Provided further that any directive given in terms of this
article shall, unless the competent authority otherwise directs , continue
to apply even when an undertaking, for whatever reason, ceases to
hold an authorisation granted in terms of this Act.
(2) Without prejudice to the generality of the foregoing
provisions of this article, a directive under this article may – 
 (a) require anything to be done or be omitted to be done,
or impose any prohibition, restriction or limitation, orany other requirement, including any requirementemanating from European Union legislation, andconfer powers, with respect to any transaction or other
act, or to any assets, or to any other thing whatsoever;
(b) require that any officer of an undertaking having
functions in relation to the holder of an authorisationbe prohibited, temporarily or otherwise, suspendedfrom carrying out activities licensable under the Act,or removed, or removed and replaced, by anotherperson acceptable to the competent authority.
(3) The power to give directives under this article shall includ e
the power to vary, alter, add to or withdraw any directive, as well as
the power to issue new or further directives.
(4) Where the competent authority is satisfied that the
circumstances so warrant, it may at any time make public anydirective it has given under any of the provisions of this arti cle.
Supervisory  
review process.
Added by:
XXXIII. 2015.31.31B. (1) The competent authority shall review and evaluate the
strategies, processes and reporting procedures which areestablished by authorised undertakings to comply with this Act,regulations made and Insurance Rules issued thereunder. Thisreview and evaluation shall comprise the assessment of thequalitative requirements relating to the system of governance, the
assessment of the risks which the undertakings concerned face o r
may face and the assessment of the ability of those undertaking s to
assess those risks taking into account the environment in which  the
undertakings are operating.
 40    CAP. 403. ]                    INSURANCE BUSINESS 
(2) The competent authority shall in particular review and
evaluate compliance with the following:
(a) the system of governance, including the own-risk and
solvency assessment, as set out in article 18I;
(b) the technical provisions as provided for in article 18E;
(c) the capital requirements as provided for in articles 15
and 17;
(d) the investment rules as set out in Insurance Rules
issued in terms of this Act;
(e) the quality and quantity of own funds as determined by
Insurance Rules issued pursuant to article 14; and
(f) where the authorised insurance or reinsurance
undertaking uses a full or partial internal model, on-going compliance with the requirements for full andpartial internal models set out in Insurance Rulesissued pursuant to article 15.
(3) The competent authority shall assess the adequacy of the
methods and practices of the authorised insurance or reinsuranc e
undertakings designed to identify possible events or future cha nges
in economic conditions that could have adverse effects on theoverall financial standing of the undertaking concerned.
(4)
 The competent authority shall assess the ability of the
authorised undertakings to withstand those possible events orfuture changes in economic conditions.
(5) Where the competent authority identifies any weakness or
deficiency as a consequence of the supervisory review process, it
shall request the insurance or reinsurance undertaking concerne d to
remedy such weakness or deficiency within such period and in su ch
manner as it may deem necessary or appropriate in thecircumstances.
(6) The reviews, evaluations and assessments referred to sub-
articles (1) to (4), shall be conducted regularly and the compe tent
authority shall establish the minimum frequency and the scope o f
those reviews, evaluations and assessments having regard to thenature, scale and complexity of the activities of the insurance  or
reinsurance undertaking concerned.
(7) In the case of events or future changes in economic
conditions that could have unfavourable effects on the overallfinancial standing of authorised insurance or reinsuranceundertakings, in addition to the calculation of the Solvency Ca pital
Requirement, the competent authority may require undertakings t o
carry out such tests as may be determined to assess the ability  of
the undertakings concerned to withstand such events or futurechanges in economic conditions that could have unfavourableeffects on their overall financial stability.
Power to set a 
capital add-on.
Added by:
XXXIII. 2015.31.31C. (1) Following the supervisory review process carried out
in terms of article 31B, the competent authority may, in except ional
circumstances, set a capital add-on for an authorised insurance  or
                 INSURANCE BUSINESS          [CAP. 403.   4 1
reinsurance undertaking stating the reasons for its decision. S uch
power shall be exercised in the following cases:
(a) where it concludes that the risk profile of the
authorised insurance or reinsurance undertakingdeviates significantly from the assumptions underlyingthe Solvency Capital Requirement, as calculated usingthe standard formula in accordance with article 15; and
(i) the requirement to use an internal model under
article 15(3) is inappropriate or has beenineffective; or
(ii) while a partial or full internal model is being
developed in accordance with article 15(3);
(b) where it concludes that the risk profile of the
authorised insurance or reinsurance undertakingdeviates significantly from the assumptions underlyingthe Solvency Capital Requirement, as calculated usingan internal model or partial internal model becausecertain quantifiable risks are captured insufficientlyand the adaptation of the model to better reflect thegiven risk profile has failed within an appropriatetimeframe;
(c) where it concludes that the system of governance of an
authorised insurance or reinsurance undertakingdeviates significantly from the standards laid down inarticle 18I and Insurance Rules issued thereunder, thatthose deviations prevent the undertaking from beingable to properly identify, measure, monitor, manageand report the risks that it is or could be exposed toand the application of other measures is in itselfunlikely to improve the deficiencies sufficiently withinan appropriate timeframe;
(d) the authorised insurance or reinsurance undertaking
applies the matching adjustment or the volatilityadjustment referred to in Articles 77b and 77d of theSolvency II Directive, respectively, or the transitionalmeasures referred to in Articles 308c and 308d of thesaid Directive and the competent authority concludesthat the risk profile of that undertaking deviatessignificantly from the assumptions underlying thoseadjustments and transitional measures; or
(e) in any of those circumstances as may be additionally
specified by the Solvency II Directive.
(2) In the circumstances set out:
(a) in paragraphs ( a) and ( b) of sub-article (1), the capital
add-on shall be calculated in such a way as to ensurethat the undertaking complies with Article 101(3) ofthe Solvency II Directive;
(b) in paragraph ( c) of sub-article (1), the capital add-on
shall be proportionate to the material risk arising fromthe deficiencies which gave rise to the decision of the
 42    CAP. 403. ]                    INSURANCE BUSINESS 
competent authority to set the add-on; and
(c) in paragraph ( d) of sub-article (1), the capital add-on
shall be proportionate to the material risk arising fromthe deviation referred to in that paragraph.
(3) In the cases set out in paragraphs ( b) and ( c) of sub-article
(1), the authorised insurance or reinsurance undertaking shallremedy the deficiencies that led to the imposition of the capit al
add-on without delay.
(4) The competent authority shall review the capital add-on, at
least once a year and it shall approve the removal of such capi tal
add-on when the undertaking has remedied the deficiencies whichled to its imposition.
(5) The Solvency Capital Requirement including the capital
add-on imposed shall replace the inadequate Solvency CapitalRequirement:
Provided that, the Solvency Capital Requirement shall not
include the capital add-on imposed in accordance with sub-artic le
(1)(c), for the purposes of the calculation of the risk margin
referred to in Article 77(5) of the Solvency II Directive.
Information to be 
provided  for supervisory purposes.
Amended by:
XII. 2006.97.Substituted by:XXXIII. 2015.32.
Amended by:
XXVI.2018.72.32. An authorised insurance and reinsurance undertaking shall
submit to the competent authority the information which isnecessary for the purposes of supervision, taking into account the
objectives of supervision, as may be specified by means ofregulations, Insurance Rules or Conduct of Business Rules whichshall also specify the period within which this information is to be
submitted.
Added by:
XXXIII. 2015.33.PART VIIA
GROUP SUPERVISION
Group supervision.
Added by:
XXXIII. 2015.33.32A.  The competent authority shall provide for supervision, at
the level of the group, of insurance and reinsurance undertakin gs
which are part of a group in accordance with regulations orInsurance Rules issued for the purposes of this Part.
Group supervisor.
Added by:
XXXIII. 2015.33.32B.  (1) The group supervisor of insurance and reinsurance
undertakings which are part of a group, shall be responsible fo r co-
ordination and the exercise of group supervision.
(2) For the purposes of this Part, "group supervisor" means the
supervisory authority responsible for group supervision,determined in accordance with Article 247 of the Solvency IIDirective.
(3) Where the competent authority is the group supervisor, it
shall, with regard to group supervision, carry out the followin g
functions:
(a) coordination of the gathering and dissemination of
relevant or essential information for going concern andemergency situations, including the dissemination ofinformation which is of importance for the carrying
                 INSURANCE BUSINESS          [CAP. 403.   4 3
out of the supervisory tasks of authorities responsible
for the supervision of an individual insurance orreinsurance undertaking in the group;
(b) supervisory review and assessment of the financial
situation of the group;
(c) assessment of compliance of the group with the rules
on solvency and of risk concentration and intra-grouptransactions as set out in Articles 218 to 245 of theSolvency II Directive;
(d) assessment of the system of governance of the group,
as set out in Article 246 of the Solvency II Directive,and of whether the board of directors of theparticipating undertaking fulfils the requirements offitness and properness set out in Articles 42 and 257 ofthe Solvency II Directive;
(e) planning and coordination, through regular meetings
held at least annually or through other appropriatemeans, of supervisory activities in going-concern aswell as in emergency situations, in cooperation withthe authorities responsible for the supervision of anindividual insurance or reinsurance undertaking in agroup, and taking into account the nature, scale andcomplexity of the risks inherent in the business of allundertakings that are part of the group;
(f) other tasks, measures and decisions assigned to the
competent authority, as group supervisor, by theSolvency II Directive or deriving from the applicationof that Directive, in particular leading the process forvalidation of any internal model at group level as setout in Articles 231 and 233 of Solvency II Directiveand leading the process for permitting the applicationof the regime established in Articles 237 to 240 of thesaid Directive.
(4) In order to facilitate the exercise of group supervision
tasks, set out in sub-article (3), a college of supervisors sha ll be
established. It shall be chaired by the competent authority whe re it
is the group supervisor. The membership, functioning andconsultation processes of the college of supervisors shall bedetermined by regulations or Insurance Rules.
Co-operation and 
exchange of information with respect to group supervision.32C.   (1) Where the competent authority is the group
supervisor, it shall cooperate closely with the other authoriti es
responsible for the supervision of individual insurance orreinsurance undertakings in a group, in particular, in cases wh ere
an insurance or reinsurance undertaking within the groupencounters financial difficulties.
(2) Where the competent authority is one of the authorities
responsible for the supervision of an individual insurance orreinsurance undertaking in a group, it shall cooperate closely with
other responsible authorities in the group and the group superv isor,
in particular, in cases where an insurance or reinsurance
 44    CAP. 403. ]                    INSURANCE BUSINESS 
undertaking encounters financial difficulties.
(3) Where the competent authority is the group supervisor or is
one of the authorities responsible for the supervision of anindividual insurance or reinsurance undertaking in a group, itshall -
(a) provide other authorities responsible for the
supervision of an individual insurance or reinsuranceundertaking in a group with such information so as toallow and facilitate the exercise of the supervisorytasks concerned under the Solvency II Directive;
(b) communicate all relevant information to such
authorities without delay, as soon as it becomesavailable or exchange information on request; and
(c) call immediately for a meeting of all the authorities
involved in the supervision of the group, at leastwhere -
(i) it becomes aware of a significant breach of the
Solvency Capital Requirement or a breach of theMinimum Capital Requirement of an individualinsurance or reinsurance undertaking;
(ii) it becomes aware of a significant breach of the
Solvency Capital Requirement at group levelcalculated on the basis of consolidated data orthe aggregated group Solvency CapitalRequirement, in accordance with whichevercalculation method is used, in Title III, ChapterII, Section I, Subsection 4 of the Solvency IIDirective; or
(iii) other exceptional circum-stances are occurring
or have occurred.
(4) Where one of the authorities responsible for the supervision
of an individual insurance or reinsurance undertaking in a grou p
has not communicated relevant information, or a request forcooperation, in particular to exchange relevant information, ha s
been rejected or has not been acted upon within two weeks, thecompetent authority may refer the matter to EIOPA.
(5) Where the group supervisor fails to carry out the tasks
referred to in paragraph (1) of Article 248 of the Solvency IIDirective, or where the members of the college of supervisors d o
not cooperate to the extent required by that sub-article, thecompetent authority may refer the matter to EIOPA and request i ts
assistance in accordance with Article 19 of Regulation (EU) No1094/2010.
(6) Where the competent authority is the group supervisor, it
shall provide the authorities responsible for the supervision o f an
individual insurance or reinsurance undertaking in a group andEIOPA with information regarding the group in accordance with
Article 19, Article 51(1) and Article 254(2) of the Solvency II
Directive, in particular regarding the legal structure and thegovernance and organisational structure of the group.
                 INSURANCE BUSINESS          [CAP. 403.   4 5
(7) Without prejudice to Article 248 of the Solvency II
Directive, the competent authority shall, where a decision is o f
importance for the supervisory tasks of the other authoritiesresponsible for the supervision of an individual insurance orreinsurance undertaking in a group, prior to taking any decisio n,
consult the said authorities in the college of supervisors with  regard
to the following:
(a) changes in the shareholding structure, organisational
or management structure of an authorised insuranceand reinsurance undertaking which is part of a groupand which requires the approval or authorisation of thecompetent authority;
(b) the decision on the extension of the recovery period in
accordance with Article 138(3) and (4) of the SolvencyII Directive;
(c) major sanctions or exceptional measures taken by the
competent authority, including the imposition of acapital add-on to the Solvency Capital Requirementunder article 31C and the imposition of any limitationon the use of an internal model for the calculation ofthe Solvency Capital Requirement as determined inInsurance Rules made for the purposes of Title I,Chapter VI, Section 4, Subsection 3 of the Solvency IIDirective.
(8) For the purposes of paragraph (b) and (c) of sub-article (7 )
and where the competent authority is not the group supervisor, the
group supervisor shall always be consulted.
(9) Where the competent authority is considering a decision
based on information received from other authorities responsibl e
for the supervision of an individual insurance or reinsuranceundertaking in a group, it shall consult such authorities conce rned
before taking that decision.
(10) Without prejudice to Article 248 of the Solvency II
Directive, the competent authority may decide not to consult ot her
authorities in cases of urgency or where such consultation mayjeopardise the effectiveness of its decision. In such a case, t he
competent authority shall without delay, inform the otherauthorities responsible for the supervision of an individualinsurance or reinsurance undertaking in a group.
(11) Where the competent authority is the group supervisor and
requires information from an undertaking for the purposes of
Article 254(2) of the Solvency II Directive, which has already been
given to another authority responsible for the supervision of a n
individual insurance or reinsurance undertaking in a group, thecompetent authority shall, whenever possible, contact that auth ority
to obtain such information.
(12) Where a parent undertaking has its head office in Malta and
the competent authority is not the group supervisor pursuant to
Article 247 of the Solvency II Directive, the competent authori ty
shall, upon request by the group supervisor, require the parent
 46    CAP. 403. ]                    INSURANCE BUSINESS 
undertaking to provide any relevant information for the exercis e of
group supervision as set out in Article 248 of the Solvency IIDirective, and the competent authority shall transmit suchinformation to the group supervisor.
(13) Where the competent authority is the group supervisor, it
may ask the European regulatory authority of a parent undertaki ng
which has its head office in another Member State, to request s uch
undertaking to submit any information which would be relevant f or
the exercise of its co-ordination rights and duties as set out in
Article 248 of the Solvency II Directive, and to transmit it di rectly
to the competent authority.
(14) Information received for the purposes of this article shall  be
treated as confidential and protected by the duty of profession al
secrecy.
Verification of 
information.
Added by:
XXXIII. 2015.33.32D. (1) Without prejudice to article 30, the competent
authority may carry out in Malta, itself or through a personappointed for that purpose, on-site verification of information  as
referred to in Article 254 of the Solvency II Directive on thepremises of any of the following:
(a) an insurance or reinsurance undertaking which is
subject to group supervision;
(b) related undertakings of the undertaking referred to in
paragraph ( a);
(c) parent undertakings of the undertaking referred to in
paragraph ( a);
(d) related undertakings of a parent undertaking of the
undertaking referred to in paragraph ( a).
(2) Where the competent authority requires, in specific cases,
to verify information concerning an undertaking, whether regula ted
or not, which forms part of a group and is situated in anotherMember State, the competent authority shall:
(a) request the European regulatory authority to enable the
competent authority to carry out the on-siteverification itself; or
(b) request the European regulatory authority to carry out
such verification on its behalf, or to appoint an auditor
or an expert to carry out such verification; or
(c) in cases where it does not carry out the on-site
verification itself, request to participate in the carryingout of such verification.
(3) Where the competent authority receives, in specific cases, a
request by a European regulatory authority to verify theinformation concerning an undertaking situated in Malta, whethe r
regulated or not, which is part of a group, the competent autho rity
shall act upon that request either by carrying out the on-siteverification itself, by allowing an auditor or expert to carry it out,
or by allowing the European regulatory authority which made therequest to carry it out itself, and such authority may, where i t does
                 INSURANCE BUSINESS          [CAP. 403.   4 7
not carry out such verification itself, participate in the on-s ite
verification.
(4) Where the competent authority has received a request
pursuant to sub-article (3), it shall inform the group supervis or of
the action taken pursuant to sub-article (3).
(5) Where the request to a European regulatory authority to
have a verification carried out in accordance with sub-article (2)
has not been acted upon within two weeks, the competent authori ty
may refer the matter to EIOPA and may request its assistance inaccordance with Article 19 of Regulation (EU) No 1094/2010.
(6) For the purposes of sub-articles (2) and (3), in accordance
with Article 21 of Regulation (EU) No 1094/2010, EIOPA shall beentitled to participate in on-site examinations where they arecarried out jointly by the competent authority and any one or m ore
European regulatory authorities.
Parent 
undertakings outside the Union: verification of equivalence.
Added by:
XXXIII. 2015.33.32E.  Deleted by XXVI.2018.73 .
Parent undertaking 
as a mixed-activity insurance holding company.
Added by:
XXXIII. 2015.33.32F. Deleted by XXVI.2018.73 .
PART VIII
TRANSFER OF BUSINESS OF INSURANCE
Transfer of general 
business.
Amended by:
XX. 2007.130;XXXIII. 2015.34.33. (1) Where it is proposed to carry out a scheme under
which an authorised insurance undertaking ("the transferor"), i s to
transfer to another undertaking, whether authorised thereunder or
not ("the transferee") all its rights and obligations under suc h
general business policies, or general business policies of suchdescriptions, as may be specified in the scheme, and -
(a) where the transferor is an undertaking whose head
office is in Malta, the performance by it of theobligations proposed to be transferred constitutes thecarrying on of business of insurance in or from Maltaor in or from a country outside Malta; or
(b) where the transferor is a third country insurance
undertaking, 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 a pproval
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
 48    CAP. 403. ]                    INSURANCE BUSINESS 
other in the English language; and the text of the
notice shall be in Maltese in the Maltese dailyand in English in the English daily;
(ii) where the transferor is an undertaking which
carries on business from Malta or in or from acountry outside Malta and, as regards any policyincluded in the proposed transfer whichevidences a contract of insurance, the risk is arisk situated outside Malta, in two dailynewspapers in the country where the risk issituated;
(b) except in so far as the competent authority has
otherwise directed, a copy of the notice has been sentby the transferor to every policyholder affected by thescheme and every other person who claims an interestin a policy included in the proposed transfer and hasgiven notice of his claim to the transferor;
(c) copies of a statement setting out particulars of the
transfer and approved for the purpose by thecompetent authority have been  available forinspection -
(i) at each of the branches, agencies and offices of
the transferor in Malta;
(ii) except in so far as the competent authority has
otherwise directed, where the transferor is anundertaking which carries on business fromMalta or in or from a country outside Malta and,as regards any policy included in the proposedtransfer 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 issituated,
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 specif ied
by the competent authority; and the competent authority shall n ot
determine the application until after considering anyrepresentations 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 th at -
(a) (i) the transferee is, or immediately after the
approval will be, authorised under article 7 tocarry on general business of the class or classesor part classes to be transferred under thescheme;
(ii) the transferee is, or immediately after the
approval will be, authorised under Article 14 or
Article 162 of the Solvency II Directive to carry
                 INSURANCE BUSINESS          [CAP. 403.   4 9
on general business of the class or classes or part
classes to be transferred under the scheme in aMember State or EEA State; or
(iii) if the transferee does not fall within sub-
paragraphs (i) and (ii) of this paragraph, thetransferee has the authorisation required toenable the business, or part which is to betransferred, to be carried on in the place towhich it is to be transferred, or will have itbefore the scheme takes effect; and
(b) (i) the transferee referred to in sub-paragraph (i) of
paragraph ( a) of this sub-article possesses, after
taking the proposed transfer into account, thenecessary eligible own funds to cover theSolvency Capital Requirement required to bemaintained under this Act;
(ii) the transferee referred to in sub-paragraph (ii) of
paragraph ( a) of this sub-article possesses, after
taking the proposed transfer into account, thenecessary eligible own funds to cover theSolvency Capital Requirement provided for in
Article 100 of the Solvency II Directive; or
(iii) if the transferee does not fall within sub-
paragraphs (i) and (ii) of this paragraph, thetransferee possesses, or will possess before thescheme takes effect, the solvency requirementsrequired of it by, or under, the law applicable inthe place to which the business is beingtransferred; and
(c) (i) if the transferee is an undertaking authorised
under this Act, the transferee’s financialresources are, consequential to the transfer,adequate to fulfil the other obligations requiredof it by, or under, this Act; or
(ii) if the transferee is a European insurance
undertaking, the transferee’s financial resourcesare consequential to the transfer, adequate tofulfil the other obligations required of it by, orunder, the law applicable in the place to whichthe business is being transferred; or
(iii) if the transferee is a third country insurance
undertaking, the transferee’s financial resourcesare, consequential to the transfer, adequate tofulfil the other obligations required of it by, orunder, the law applicable in the place to whichthe business is being transferred; and
(d) if the transferor is an undertaking whose head office is
in Malta, and the establishment from which thepolicies are to be transferred is situated in a MemberState or EEA State -
(i) the European regulatory authority in that
 50    CAP. 403. ]                    INSURANCE BUSINESS 
Member State or EEA State has been consulted
about the proposed transfer; and
(ii) the European regulatory authority has either
responded or the period of three monthsbeginning with the consultation has elapsed;
(e) if the transferor is an undertaking which carries on
business from Malta or in or from a country outsideMalta and, as regards any policy included in theproposed transfer which evidences a contract ofinsurance, the risk is a risk situated outside Malta -
(i) the European regulatory authority in the country
where the risk is situated has been notified of theproposed transfer; and
(ii) the overseas regulatory authority where the risk
is situated has been notified of the proposedtransfer; and
(iii) either the European regulatory authority or the
overseas regulatory authority has consented tothe transfer or the European regulatory authorityor the overseas regulatory authority has notrefused its consent to the transfer within theperiod of three months beginning with the dateof the notification.
(5) On determining an application made under subarticle (1),
the competent authority shall -
(a) publish a notice of its decision in such manner as it
may think fit; and
(b) send a copy of that notice to the transferor, the
transferee and every person who made representationsin accordance with the notice referred to in subarticle(2),
and if it refuses the application it shall inform the transfero r and the
transferee in writing of the reasons for its refusal.
Effect of approval 
under article 33.
Amended by:
XXXIII. 2015.35.34. (1) Subject to subarticle (2), a scheme giving effect to a
transfer approved by the competent authority under article 33 s hall
be effectual in law -
(a) to transfer to the transferee all the transferor’s rights
and obligations under the policies included in thetransfer scheme; and
(b) if the scheme so provides, to secure the continuation
by or against the transferee of any legal proceedingsby or against the transferor which relate to those rightsor 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) A transfer approved by the competent authority shall
automatically be valid against policyholders, the insured perso ns
                 INSURANCE BUSINESS          [CAP. 403.   5 1
and any other person having rights or obligations arising out o f the
contracts transferred.
(3) Except in so far as the competent authority may otherwise
direct, a policyholder whose policy is included in such a schem e
shall be given written notice of its carrying out by the transf eree.
Transfer of long 
term business.
Amended by:
XX. 2007.131;XXXIII. 2015.36.35. (1) Where it is proposed to carry out a scheme under
which the whole or part of the long term business carried on by  an
authorised insurance undertaking under this Act ("the transfero r"),
is to be transferred to another undertaking whether authorisedthereunder or not ("the transferee"), and -
(a) where the transferor is an undertaking whose head
office is in Malta, the business proposed to betransferred is business carried on in or from Malta orin or from a country outside Malta;
(b) where the transferor is a third country insurance
undertaking, the business proposed to be transferred isbusiness carried on in or from Malta,
the transferor or the transferee shall, by application filed be fore the
Financial Services Tribunal, request approval of the scheme.
Approval by the Tribunal shall be in accordance with the provis ions
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 andoffices at which, and the period for which, copies ofthe documents mentioned in paragraph ( d) will be
available as required by that paragraph has beenpublished -
(i) in at least two local daily newspapers of which
one is published in the Maltese language and theother in the English language; and the text of thenotice shall be in Maltese in the Maltese dailyand in English in the English daily;
(ii) where the transferor is an undertaking which
carries on business from Malta or in or from acountry outside Malta and, as regards any policyincluded in the proposed transfer whichevidences a contract of insurance, a countryoutside 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 -
 52    CAP. 403. ]                    INSURANCE BUSINESS 
(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 thescheme on the long term business policyholdersof the undertakings concerned,
has been sent to each of those policyholders and every
other person who claims an interest in a policyincluded in the proposed transfer and has given writtennotice of his claim to the transferor;
(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 thanthirty days has elapsed since the date of service;
(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 undertakings concerned;
(ii) where the transferor is -
(aa) an undertaking whose head office is in Malta
which carries on business from Malta or inor from a country outside Malta, or
(bb) a third country insurance undertaking which
carries on business from Malta,
and, as regards any policy included in the proposed
transfer which evidences a contract of insurance, acountry outside Malta is the country of thecommitment, 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 bythe Tribunal; and that copies of the report have beenmade available for purchase from those offices andplaces during that period upon payment of such fee asmay be fixed by the Tribunal; and
(e) the notice and the statement referred to in this sub-
article shall state that written representationsconcerning the transfer may be sent to the Tribunalwithin a period determined by the Tribunal.
(4) On any application filed under sub-article (1):
(a) the competent authority may be heard by the Tribunal;
and
(b) the competent authority and any policyholder who
alleges that he would be adversely affected by thecarrying out of the scheme and every other person whoclaims an interest in a policy included in the proposedtransfer and has given notice of such interest to thetransferor, shall be entitled to make writtenrepresentations..
                 INSURANCE BUSINESS          [CAP. 403.   5 3
(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 is, or immediately after the
approval will be, authorised under article 7 tocarry on long term business of the class orclasses to be transferred under the scheme;
(ii) the transferee is, or immediately after the
approval will be, authorised under Article 14 or
Article 162 of the Solvency II Directive, to carry
on long term business of the class or classes tobe transferred under the scheme in a MemberState or an EEA State; or
(iii) if the transferee does not fall within sub-
paragraphs (i) and (ii), the transferee has theauthorisation required to enable the business, orpart which is to be transferred, to be carried onin the place to which it is to be transferred orwill have it before the scheme takes effect; and
(b) (i) the transferee referred to in sub-paragraph (i) of
paragraph ( a) of this sub-article, produces
evidence that after taking the transfer intoaccount, it possesses the necessary eligible ownfunds to cover the Solvency CapitalRequirement required to be maintained underthis Act;
(ii) the transferee referred to in sub-paragraph (ii) of
paragraph ( a) of this sub-article, produces
evidence that after taking the transfer intoaccount, it possesses the necessary eligible ownfunds to cover the Solvency CapitalRequirement provided for in Article 100 of theSolvency II Directive; 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 solvency requirements required of it by, orunder, the law applicable in the place to whichthe business is being transferred;
(iv) ( aa) if the transferee is authorised under this
Act, its financial resources are,
consequential to the transfer, adequate tofulfil the other obligations required of it
by, or under, this Act; or
(bb) if the transferee is a third country
insurance undertaking, the transferee’sfinancial resources are, consequential tothe transfer, adequate to fulfil the otherobligations required of it by, or under, thelaw applicable in the place to which thebusiness is being transferred;
 54    CAP. 403. ]                    INSURANCE BUSINESS 
(c) if the transferor is an undertaking whose head office is
in Malta, and the establishment from which thepolicies are to be transferred is situated in a MemberState or EEA State -
(i) the European regulatory authority in that
Member State or EEA State has been consultedabout the proposed transfer; and
(ii) the European regulatory authority has either
responded or the period of three monthsbeginning with the consultation has elapsed.
(6) Where the transferor is an undertaking which carries on
business from Malta or in or from a country outside Malta and, as
regards any policy included in the proposed transfer whichevidences a contract of insurance, a country outside Malta is t he
country of the commitment, the Tribunal shall not approve thetransfer unless the competent authority certifies -
(a) that the European regulatory authority in that country
has been notified; or
(b) the overseas regulatory authority has been notified of
the proposed transfer; and
(c) either that the European regulatory authority or the
overseas regulatory authority has consented to thescheme or that any such authority has not refused itsconsent to the scheme within the period of threemonths beginning with the date of the notification.
(7) Where a scheme is approved by the Tribunal under this
article the transferee shall, within ten days from the date on which
the approval is made or such longer period as the Tribunal mayallow, deposit two office copies of the approval with the compe tent
authority.
Provisions 
supplementary to article 35.
Amended by:
XXXIII. 2015.37.36. Where the Tribunal approves a scheme under article 35, the
long term business referred to in the application may be transf erred
to the transferee without any further need of any documentevidencing the consent of the policyholder and of every otherperson who claims an interest in a policy included in the propo sed
transfer and notwithstanding any opposition by the policyholderand every other person who claims an interest in a policy inclu ded
in the proposed transfer. The Tribunal may make provision for s uch
incidental, consequential and supplementary matters as arenecessary to secure that the scheme shall be fully and effectiv ely
carried out; and, where such be the case, for the continuation by or
against the transferee of any legal proceedings pending by oragainst the transferor which relate to the scheme.
                 INSURANCE BUSINESS          [CAP. 403.   5 5
Transfer of 
business restricted to reinsurance.
Amended by:
XVII. 2002.254.Deleted by:XII. 2009.98.
Added by:
XX. 2007.132.
Amended by:
XXXIII. 2015.38.37. Where an undertaking authorised under this Act carrying
on business restricted to reinsurance ("the transferor") propos es to
transfer all or part of its business, the competent authority s hall 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 tocarry on business of reinsurance;
(ii) the transferee is, or immediately after the
approval will be, authorised under Article 14 or162 of the Solvency II Directive, to carry on in a
Member State or an EEA State, business ofreinsurance to be transferred under the scheme;or
(iii) if the transferee does not fall within
subparagraphs (i) and (ii), the transferee has theauthorisation required (if any) to enable thebusiness, or part which is to be transferred, to becarried on in the place to which it is to betransferred or will have it before the schemetakes effect; and
(b) (i) the transferee referred to in sub-paragraph (i) of
paragraph ( a) possesses, after taking the
proposed transfer into account, the necessaryeligible own funds to cover the Solvency CapitalRequirement required to be maintained underthis Act;
(ii) the transferee referred to in sub-paragraph (ii) of
paragraph ( a) possesses, after taking the
proposed transfer into account, the necessaryeligible own funds to cover the Solvency CapitalRequirement referred to in Article 100 or 166 ofthe Solvency II Directive; or
(iii) if the transferee does not fall within
subparagraphs (i) and (ii), the transferee satisfiesthe solvency requirements required of it by, orunder, the law applicable in the place to whichthe business is being transferred;
(c) (i) if the transferee is an undertaking authorised
under this Act, the transferee’s financialresources are, consequential to the transfer,adequate to fulfil the other obligations requiredof it by or under this Act;
(ii) if the transferee is a third country reinsurance
undertaking, the transferee’s financial resourcesare, consequential to the transfer, adequate tofulfil (if any) the other obligations required of itby, or under, the law applicable in the place towhich the business is being transferred.
 56    CAP. 403. ]                    INSURANCE BUSINESS 
Transfer of 
business of insurance to an authorised insurance or reinsurance undertaking.
Added by:
XXXIII. 2015.39.37A.  (1) Where it is proposed to carry out a transfer of
business of insurance under which the whole or part of the gene ral
business or long term business of an insurance or reinsuranceundertaking is to be transferred to an undertaking authorised u nder
this Act ("the transferee") by an undertaking whose head office  is
in a country outside Malta, the transferee shall notify the com petent
authority of the particulars of the proposed transfer and no su ch
transfer shall take place unless and until the competent author ity
has signified its consent in writing.
(2) Where the competent authority has required a recovery plan
or a finance scheme in terms of article 16 or 18, it shall refr ain from
issuing a certificate of solvency for the purposes of this Part  of this
Act for as long as it considers that the rights of policyholder s or the
contractual obligations of the reinsurance undertaking areprejudiced.
PART IX 
ACQUISITION AND DISPOSAL OF SHARES, WITHDRAWAL, 
DISSOLUTION AND WINDING UP
Changes in 
shareholding of an authorised undertaking.
Amended by:
XVII. 2002.255;XIII. 2004.116;XII. 2006.99;XX. 2007.133;III. 2009.26.Substituted by:XVII. 2009.31.
Amended by:
XXXIII. 2015.40, 77.38. (1) Notwithstanding anything contained in any other law,
any person or persons acting in concert (hereinafter referred t o in
this Act as the "proposed acquirer"), who have taken a decisioneither to -
(a) acquire, directly or indirectly, a qualifying share-
holding in an authorised insurance or reinsuranceundertaking;
(b) increase, directly or indirectly, an existing
shareholding which is not a qualifying shareholding soas to cause it to become a qualifying shareholding inan authorised insurance or reinsurance undertaking; or
(c) further increase, directly or indirectly, such qualifying
shareholding in an authorised insurance or reinsuranceundertaking as a result of which the proportion of thevoting rights or of the capital held would reach orexceed twenty per centum, thirty per centum or fiftyper centum or so that the authorised insurance orreinsurance undertaking would become its subsidiary,
(hereinafter referred to as the "proposed acquisition"), shall notify
the competent authority in writing of any such decision, indica ting
the size of the intended shareholding and providing any relevan t
information as and in the manner that the competent authority m ay
by Insurance Rules require, including the form in which suchnotification shall be made and the criteria adopted by the comp etent
authority in determining whether such person is a fit and prope r
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 insurance or reinsuranceundertaking;
                 INSURANCE BUSINESS          [CAP. 403.   5 7
(b) reduce, directly or indirectly, a qualifying
shareholding so as to cause it to cease to be aqualifying shareholding; or
(c) reduce, directly or indirectly, a qualifying
shareholding so that the proportion of the voting rightsor of the capital held would fall below twenty percentum, thirty per centum or fifty per centum or so thatthe authorised insurance or reinsurance undertakingwould cease to be its subsidiary,
shall notify the competent authority in writing of any such dec ision
indicating the size of the intended shareholding and providing any
relevant information as and in the manner that the competentauthority may by Insurance Rules require.
(3) Subarticles (1) and (2) shall apply irrespective of whether
or not any of the relevant shares are shares listed on any regu lated
market.
(4) Notwithstanding the provisions of sub-articles (1) and (2),
it shall be the duty of an authorised insurance or reinsuranceundertaking and of the directors thereof, to notify the compete nt
authority forthwith upon becoming aware that any person intends  to
take any of the actions set out in these sub-articles.
(5) If any person or any authorised insurance or reinsurance
undertaking takes or intends to take any action set out in suba rticle
(1) or (2) without notifying the competent authority or obtaini ng its
approval in terms of article 38A, then, without prejudice to an y
other penalty which may be imposed under this Act, the competen t
authority shall have the power to make an order:
(a) restraining such person or authorised insurance or
reinsurance undertaking from taking, or continuingwith, such action;
(b) declaring such action to be void and of no effect;
(c) requiring such person or authorised insurance or
reinsurance undertaking to take such steps as may benecessary to restore the position existing immediatelybefore the action was taken;
(d) restraining such person or authorised insurance or
reinsurance undertaking from exercising any rightswhich such action would, if lawful, have conferredupon them, including the right to receive any paymentor to exercise any voting rights attaching to the sharesacquired;
(e) restraining such person or authorised insurance or
reinsurance undertaking from taking any similar actionor any other action within the categories set out insubarticles (1) and (2).
(6) Without prejudice to any other provision of this Act, where
the influence exercised by any person acquiring or proposing toacquire a qualifying shareholding is, or is likely to, operate against
the sound and prudent management of an authorised insurance or
 58    CAP. 403. ]                    INSURANCE BUSINESS 
reinsurance undertaking, the competent authority may exercise a ny
of its powers under this Act to put an end to such situation,including the power to issue directives as it may deem reasonab le
in the circumstances.
(7) In the case of a third country insurance or reinsurance
undertaking authorised under this Act to carry on in or from Ma lta
the business of insurance, the provisions of this article shall  apply
to the extent only of requiring such undertaking to give to thecompetent authority, not later than thirty days from such chang e or
occurrence, as the case may be, the information therein referre d to.
(8) The competent authority, may, by means of Insurance Rules
issued under this Act, indicate the circumstances when persons are
to be regarded as "acting in concert".
Assessment 
procedure.
Added by:
XVII. 2009.32.
Amended by:
XXXIII.2015.41,77XXVI.2018.74.38A. (1) The competent authority shall, promptly and in any
event within two working days following receipt of the notifica tion
required under article 38(1), as well as following the possiblesubsequent receipt of the information referred to in subarticle  (4),
acknowledge receipt thereof in writing to the proposed acquirer .
(2) The competent authority shall have a maximum of sixty
working days as from the date of the written acknowledgement ofreceipt of the notification required under article 38(1) and al l
documents required by the competent authority to be attached tosuch notification (hereinafter referred to in this Act as the"assessment period") to carry out an assessment on the basis ofsuch information as may be determined by Insurance Rules issuedfor 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 s uch
period, request any further information that is necessary tocomplete the assessment. Such a request shall be made in writin g
and shall specify the additional information needed.
(5) During the period between the date of request for additional
information by the competent authority and the receipt of aresponse thereto by the proposed acquirer, the assessment perio d
shall be interrupted. The interruption period shall not exceedtwenty working days. Any further requests by the competentauthority for completion or clarification of the information sh all be
at its discretion but shall not result in an interruption of su ch
assessment period.
(6) The competent authority may extend the interruption period
referred to in subarticle (5) up to thirty working days if theproposed acquirer is:
(a) situated or regulated in a non-Member State or non-
EEA state; or
(b) a person not subject to supervision under:
                 INSURANCE BUSINESS          [CAP. 403.   5 9
(i) Directive 2014/65/EU of the European Parliament
and of the Council of 15 May 2014 on markets infinancial instruments and amending Directive2002/92/EC and Directive 2011/61/EU (recast);
(ii) Directive 2013/36/EU of the European
Parliament and of the Council of 26 June 2013on access to the activity of credit institutions andthe prudential supervision of credit institutionsand investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and2006/49/EC;
(iii) Directive 2009/65/EC of the European
Parliament and of the Council of 13 July 2009on the co-ordination of laws, regulations andadministrative provisions relating toundertakings for collective investment intransferable securities (UCITS)(recast);
(iv) the Solvency II Directive.
(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 maydeem 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 i n
respect of the level of shareholding that must be acquired norexamine 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 o n the
basis of the criteria set out in the Insurance Rules referred t o in
article 38(1) or if the information provided by the proposedacquirer is incomplete.
(10) If the competent authority decides to refuse the proposed
acquisition, it shall, within two working days, and not exceedi ng
the assessment period, inform the proposed acquirer in writingspecifying the reasons for such decision. The competent authori ty
may, whether at the request of such proposed acquirer or not, i ssue
a public statement indicating such reasons.
(11) If the competent authority does not refuse the proposed
acquisition in writing within the assessment period, such propo sed
acquisition shall be deemed to be approved.
(12) Without prejudice to any other measure which may be taken
under this Act, where a qualifying shareholding in an authorise d
insurance or reinsurance undertaking is acquired notwithstandin g
 60    CAP. 403. ]                    INSURANCE BUSINESS 
the refusal of the competent authority, the exercise of the
corresponding voting rights shall be suspended and any of the v otes
cast in contravention of this article shall be null and void.
(13) The competent authority may fix a maximum period for
concluding the proposed acquisition and extend it whereappropriate.
(14) Notwithstanding the provisions of subarticles (1) to (6),
where two or more proposals to acquire or increase qualifyingshareholdings in the same authorised insurance or reinsuranceundertaking have been notified to the competent authority, thelatter shall treat the proposed acquirers in a non-discriminato ry
manner.
Co-operation with 
European regulatory authorities or overseas regulatory authorities.
Added by:
XXVII. 2009.33.
Amended by:
XXXIII. 2015.42.38B. (1) The competent authority shall work in full
consultation with European regulatory authorities when carryingout the assessment referred to in article 38A if the proposedacquirer is one of the following:
(a) a credit institution, insurance undertaking, reinsurance
undertaking, investment firm or UCITS managementcompany authorised in another Member State or EEAState or in a sector other than that in which theacquisition is proposed;
(b) the parent undertaking of a credit institution, insurance
undertaking, reinsurance undertaking, investment firmor UCITS management company authorised in anotherMember State or EEA State or in a sector other thanthat in which the acquisition is proposed; or
(c) a person controlling a credit institution, insurance
undertaking, reinsurance undertaking, investment firmor UCITS management company authorised in anotherMember State or EEA State or in a sector other thanthat in which the acquisition is proposed.
(2) The competent authority shall, without undue delay,
provide any information which is essential or relevant for theassessment referred to in article 38A to the European regulator y
authority requesting such information. Upon request, the compet ent
authority shall communicate to the European regulatory authorit y
all relevant information and shall communicate on its own initi ative
all essential information. A decision by the competent authorit y in
terms of article 38A shall indicate any views or reservationsexpressed by the European regulatory authority responsible for the
proposed acquirer.
(3) The procedure set out in sub-articles (1) and (2) shall appl y
mutatis mutandis  where the proposed acquirer is authorised or
established in a third country.
                 INSURANCE BUSINESS          [CAP. 403.   6 1
Mergers, 
reconstruc tions, 
divisions and 
changes in share 
capital  or voting 
rights.
Added by:
XXVII. 2009.34.
Amended by:
XXXIII. 2015.43.38C. (1) Notwithstanding anything contained in any other law
and without prejudice to article 38(1) and (2), the consent of the
competent authority given in writing shall be required before a n
authorised undertaking may lawfully:
(a) merge with any other undertaking, 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 undertaking to notify the compete nt
authority forthwith in writing upon becoming aware that suchundertaking intends to take any of the actions set out in subar ticle
(1).
(3) Within three months of receipt of such notification or
receipt of such information as the competent authority maylawfully require, whichever is the later, the competent authori ty
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 deemappropriate; or
(c) refusing consent to the taking of the action,
and if it refuses to grant consent it shall inform the person o r the
authorised undertaking concerned in writing of the reason for i ts
refusal.
(4) If any person or any authorised undertaking takes or
decides to take any action set out in subarticle (1) without ob taining
the consent of the competent authority, then, without prejudice  to
any other penalty which may be imposed under this Act, thecompetent authority shall have the power to make an order:
(a) restraining such person or authorised undertaking from
taking or continuing with such action;
(b) declaring such action to be void and of no effect;
(c) requiring such person or authorised undertaking to
take such steps as may be necessary to restore theposition existing immediately before the action wastaken;
(d) restraining such person or authorised undertaking from
exercising any rights which such action would, iflawful, have conferred upon them, including the rightto receive any payment or to exercise any voting rightsattaching to the shares acquired;
(e) restraining such person or authorised undertaking from
taking any similar action or any other action within thecategories set out in subarticle(1).
 62    CAP. 403. ]                    INSURANCE BUSINESS 
Undertakings 
ceasing to carry on business.
Amended by:
XVII. 2002.256;XII. 2006.100;XXXIII. 2015.44, 77.39. (1) Subject to the following provisions of this article, if an
authorised insurance undertaking intends to cease either wholly  or
partly to carry on the business it is authorised to carry on, s uch
undertaking shall, not later than six months before the date onwhich it intends to cease to carry on such business, give notic e
thereof in writing to the competent authority and the authorise d
insurance undertaking shall comp ly with any provision of this A ct
that may be required of it in such circumstances.
(2) Where an authorised insurance undertaking gives notice to
the competent authority under subarticle (1), the competentauthority -
(a) shall require the undertaking to -
(i) give publicity to the matter, amongst its
policyholders and in the press in the form andmanner as may be determined by InsuranceRules made for the purpose of this article;
(ii) discharge all its liabilities to its policyholders
and creditors in a manner acceptable to thecompetent authority;
(iii) appoint a person which shall service or, as the
case may be, run-off such business; and
(b) may require the undertaking to ascertain that its
technical provisions meet the requirements of article18E.
(3) The competent authority shall, not later than thirty days
before the proposed date on which an authorised insuranceundertaking as aforesaid intends to cease to carry on the busin ess it
is authorised to carry on, issue a permit to the authorised ins urance
undertaking concerned -
(a) authorising it to cease to carry on such business and to
service or run-off that business, as from a specifieddate;
(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.
Undertakings 
carrying out servicing or run-off of business of insurance.
Amended by:
XXXIII. 2015.45.40. Every authorised insurance undertaking issued under
article 39 with a permit authorising it to cease to carry on th e
business it is authorised to carry on shall not, as from the da te
specified in the permit ("the specified date"), effect and carr y out
any new contracts of insurance in the business mentioned in thepermit but shall -
(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 th e
specified date.
                 INSURANCE BUSINESS          [CAP. 403.   6 3
Reinsurance 
undertakings ceasing and carrying out servicing or run-off of business of insurance.
Added by:
XXXIII. 2015.46.40A.  The provisions of articles 39 and 40 shall apply mutatis
mutandis  to undertakings whose business is restricted to
reinsurance.
Reorganisation, 
dissolution and winding up of authorised undertakings.
Amended by:
XVII. 2002.257;XIII. 2004.117;XX. 2007.134;XXXIII. 2015.47;XXVI.2018.75.41. (1) Without prejudice to the provisions contained in article
42 and subject to the following provisions of this article -
(a) in the case of an authorised insurance undertaking
whose head office is in Malta:
(i) where any reorganisation measures are adopted
in relation to the undertaking, such measuresshall be applied in accordance with regulationsmade for the purposes of this article;
(ii) such undertaking shall, dissolve and
consequentially wind up under and inaccordance with regulations made under thisarticle; and
(b) in the case of a branch in Malta of an authorised third
country insurance undertaking:
(i) where any reorganisation measures are adopted
in relation to the branch, such measures shall beapplied in accordance with regulations made forthe purposes of this article;
(ii) such branch shall dissolve and consequentially
wind up under and in accordance with regulationsmade for the purposes of this article.
(2) Where it appears to the competent authority that an
authorised insurance undertaking is, for any reason whatever, l ikely
to dissolve and wind up, or has given notice of dissolving andwinding up, or is being dissolved and wound up, the competentauthority shall -
(a) in the case of an undertaking whose head office is in
Malta, prohibit the free disposal of the assets of theundertaking whether such assets are situated in Maltaor in country outside Malta; and
(b) in the case of an authorised third country insurance
undertaking, prohibit the free disposal of the assets of
the undertaking situated in Malta or in any othercountry if such assets relate to the undertaking’sbusiness in Malta,
if such prohibition has not been imposed on the insurance
undertaking by virtue of or under any other provision of this A ct.
(3) Notwithstanding the provisions of any other law, the assets
of an authorised insurance undertaking which are prohibited und er
subarticle (2) or by virtue of or under any other provision of this
Act to be freely disposed of shall be available only for meetin g the
liabilities of the undertaking attributable to its business of
 64    CAP. 403. ]                    INSURANCE BUSINESS 
insurance:
Provided that debts and other liabilities arising out of
contracts of insurance attributable to its business of insuranc e 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 subarti cle
the restriction imposed by that subarticle shall not apply to s o 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 ar ticle
shall prevail, and the provisions of any other law shall, to th e extent
of the inconsistency, not apply to such undertakings.
(6) The Minister may, after consultation with the competent
authority, make regulations in respect of the winding-up or re-organisation of authorised insurance undertakings whose headoffice is in Malta, including their branches, if any, and of br anches
of third country insurance undertakings, and different provisio ns
may be made for different cases or classes of cases, and accoun t
shall be taken of Malta’s international commitments in this reg ard.
Such regulations may provide for the implementation of detailedre-organisation measures and procedures, including the followin g
matters: the publication and submission of information in suchlanguage or languages and in such newspapers or other publicati ons
as may be prescribed, the submission of information to creditor s,
and the manner and procedure thereof, the notification to credi tors
and the procedure for the submission of claims or representatio ns,
measures for the protection of the rights of creditors and othe r third
parties, including set-off arrangements; consultation between t he
competent authority and any other regulatory, administrative orjudicial authorities in Malta and outside Malta with competenceover the winding-up or re-organisation of such undertakings or of
branches thereof; the publication of decisions relating to suchwinding-up or re-organisation procedures; the establishment ofrules governing the applicability of the proper or applicable l aw
and other issues of conflict of laws.
(7) Where an authorised insurance or reinsurance undertaking
takes a decision to dissolve and wind up, it shall immediatelynotify, in writing, the competent  authority of such decision be fore
taking any further action to that effect.
Cap. 386.(8) ( a) An authorised reinsurance undertaking with its head
office in Malta shall dissolve and wind up inaccordance with the provisions of the Companies Act.
(b) An authorised third country reinsurance undertaking
shall dissolve and wind up in accordance with the lawsof the country where the head office of suchundertaking is situated governing the dissolution andwinding up of such undertakings.
                 INSURANCE BUSINESS          [CAP. 403.   6 5
Dissolution and 
winding up of an authorised undertaking carrying on long term business.
Amended by:
XXXIII. 2015.48.42. (1) An authorised undertaking whose head office is in
Malta, carrying on long term business may not be dissolved andconsequently wound up voluntarily without the consent of thecompetent authority.
(2) It shall be the duty of an authorised undertaking and the
directors thereof, to notify the competent authority forthwith upon
becoming aware of any measures to be taken in terms of sub-arti cle
(1).
(3) Without prejudice to the provisions contained in article 41,
in the event of an undertaking as aforesaid being dissolved andwound up -
(a) the assets representing the technical provisions
maintained by the undertaking in respect of its longterm business shall be available only for meeting theliabilities of the undertaking attributable to thatbusiness;
(b) the other assets of the undertaking shall be available
only for meeting the liabilities of the undertakingattributable to its other business.
(4) Where the value of the assets mentioned in either paragraph
(a) or ( b) of sub-article (3) exceeds the amount of the liabilities
mentioned in either paragraph, the restriction imposed by thatsubarticle shall not apply to so much of those assets as repres ents
the excess.
Substituted by:
XXVI.2018.76.PART X 
OBLIGATIONS ON UNDERTAKINGS
Changes in 
documentation or information.
Amended by:
XVII. 2002.258;XII. 2006.101;XVII. 2009.35;XXXIII.2015.49;77XXVI.2018.77.43. (1) The holder of an authorisation issued under this Act to
carry on the business of insurance and the holder of a permit i ssued
thereunder to service or run-off that business shall notify in writing
the competent authority of any material changes in thedocumentation or information provi ded or required to be provide d
by or under this Act and any regulations, Insurance Rules or Conduct
of Business Rules made thereunder, as soon as the holder become s
aware of such changes.
(2) Without prejudice to article 38, an authorised insurance or
reinsurance undertaking whose head office is in Malta shall -
(a) before making any addition or alteration to the
memorandum or articles of association or otherinstrument constituting the undertaking, submit inwriting to the competent authority particulars of theproposed addition or alteration for its prior consent;and no such addition or alteration shall be made orshall be registered, or shall take effect, whether it isregistered or not, unless and until the competentauthority 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 qualifyingshareholding in the undertaking and the percentage ofsuch holding; and the competent authority may, by
 66    CAP. 403. ]                    INSURANCE BUSINESS 
Insurance Rules made for the purposes of this article,
determine the form, manner and content of theinformation to be forwarded to it and the date bywhich such information shall be forwarded shall alsobe established by that rule.
(3) Without prejudice to the foregoing provisions of this
article, an authorised insurance or reinsurance undertaking sha ll
notify the competent authority on a continuous basis, with anychange or circumstances which may give rise to the existence ofclose links.
Statutory notice by 
an authorised undertaking in relation to long term policy.
Amended by:
XIII. 2006. 102;XXXIII. 2015.50.44. (1) No insurance undertaking authorised under this Act to
carry on long term business shall enter into a contract of insu rance
the effecting of which constitutes the carrying on of long termbusiness, unless such undertaking either -
(a) has served on the other party to the contract by means
as may be prescribed a statutory notice in relation tothat 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 m ay
exempt from any requirement contracts as may therein beprescribed.
(3) For the purposes of this article a statutory notice is a not ice
which -
(a) contains such matters (and no others) and is in such
form as may be prescribed and complies with suchrequirements as may be prescribed for securing thatthe 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 meansas may be prescribed a notice of cancellation on theauthorised undertaking.
Linked long term 
policies.
Amended by:
XXXIII. 2015.51.45. Regulations may be made, as respects the matters as may
therein be prescribed, in relation to contracts of insurance th e
effecting of which constitutes the carrying on of long term bus iness
and which -
(a) are entered into by an insurance undertaking whose
head office is in Malta authorised under this Act tocarry on long term business; and
(b) are contracts under which the benefits payable to the
policyholder are wholly or partly to be determined byreference to the value of, or the income from, propertyof any description (whether or not specified in thecontract) or by reference to fluctuations in, or in anindex of, the value of property of any description(whether or not so specified).
                 INSURANCE BUSINESS          [CAP. 403.   6 7
Contracts of 
insurance not voidable by insurer notwithstanding a breach of this Act or of the Insurance Distribution Act.Substituted by:XII. 2006.103.
Amended by:
XXXIII. 2015.77;XXVI.2018.78.Cap. 487.46. No contract of insurance shall be held void or voidable by
an insurer by reason only that, at the time the contract is ent ered
into, there is a breach of any provision of this Act or of the
Insurance Distribution 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 Rules or Conduct of Business Rules issued in virtue o f this
Act, or of any Insurance Distribution Rules or Conduct of Busin ess
Rules issued in virtue of the Act.
Contracts to be 
expressed in a specified language.
Amended by:
XVII. 2002.259;XII. 2006.104;XXXIII.2015.52,77
XXVI.2018.79.47. (1) The competent authority may by Conduct of Business
Rules made for the purposes of this article determine the language in
which a contract of insurance relating to a risk which is a ris k
situated in Malta or to a commitment where Malta is the country  of
the commitment of a class or classes or part classes of busines s as
may therein be specified is to be expressed.
(2) In the absence of any such Conduct of Business Rules, the
contract shall be expressed in the English language.
(3) The provisions of this article shall not apply to an
undertaking whose business in or from Malta is restricted toreinsurance.
Insurance 
advertisements.
Amended by:
XVII. 2002.259;XII. 2006.105;XXXIII.2015.53,77XXVI.2018.80.48. (1) No insurance undertaking authorised under this Act
shall issue or cause to be issued any advertisement or carry ou t or
cause to be carried any promotional activity related to the bus iness
of insurance which misleads, or directly or by implication is l ikely
to mislead, or deceive any prospective policyholder, or theinsurance sector in general, or the general public with respect  to its
assets or corporate structure or financial standing or authoris ation
or any other material respect:
Provided that, in the case of an undertaking whose head
office is in Malta, the provisions of this subarticle shall als o 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 Conduct of Business Rules
made for the purposes of this article d etermine the form and content
of insurance advertisements and make different provision inrelation to insurance advertisements of different classes or pa rt
classes or descriptions; and the manner in which any promotiona l
activity as aforesaid shall be carried out or caused to be carr ied out.
(3) The provisions of subarticle (2) shall not apply to an
undertaking if its business is restricted to reinsurance.
(4) Where an undertaking issues or causes to be issued an
advertisement or carries out or causes to be carried out anypromotional activity which is in breach of or does not comply w ith
any of the provisions of subarticle (1) or (2), the competentauthority may issue an order directing the undertaking -
 68    CAP. 403. ]                    INSURANCE BUSINESS 
(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 an undertaking refuses or fails to comply with any order
issued by the competent authority under subarticle (4) or refus es or
fails to comply with such order within the time specified there in,
without prejudice to any penalty  which the undertaking may incu r
under this Act, the competent authority shall have the power toenforce, at the expense of the undertaking concerned, the orderissued by it under that subarticle.
Provisions relating 
to Lloyd’s.
Added by:
XII. 2006.106.
Amended by:
XXXIII. 2015.54.48A.  (1) For the purposes of this article, "syndicate" means a
member or group of members of Lloyd’s underwriting business ofinsurance at Lloyd’s through the agency of a managing agent towhich a particular syndicate number is assigned by or under theauthority of the Council of Lloyd’s.
(2) Where the members of Lloyd’s carry on business of
insurance in Malta, they shall carry on such business in exerci se of
a European right.
(3) Lloyd’s shall at all times have a representative in Malta
who shall be resident in Malta and who shall be the representat ive
in Malta of Lloyd’s and of each of its members.
(4) 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 it s
members and to file any judicial acts in the registry of any co urt or
similar authority in Malta on behalf of Lloyd’s or any of itsmembers. The general representative shall not be personally lia ble
for the debts and obligations of Lloyd’s or any of its members and
accordingly no execution of any precautionary or executive warr ant
against Lloyd’s or any of its members shall be made againstLloyd’s general representative.
Cap. 12.(5) It shall be sufficient in any judicial act (other than an
application for the issue of any precautionary or executive war rant)
filed by or against members of Lloyd’s in connection with a pol icy
underwritten by them to file the act in the name of the Lloyd’srepresentative in Malta as representative of those members;provided the act commencing proceedings contains a statement th at
it is being filed in connection with a policy of insuranceunderwritten by members of Lloyd’s and giving particulars of th e
number reference and date of the policy in respect of which the  act
is filed, the identifying number of each of the syndicatessubscribing thereto and, where known, the names of the membersof Lloyd’s comprising those syndicates. This subarticle shall a pply
notwithstanding any provision to the contrary contained in the
Code of Or ganization and Civil Procedure .
(6) The Lloyd’s representative shall within forty-five days afte r
                 INSURANCE BUSINESS          [CAP. 403.   6 9
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 fil ed as
aforesaid containing a list of the names of the members compris ing
the syndicates subscribing to the policy and any such note shal l be
deemed to be an integral part of the judgment or decree emanati ng
from the court subsequent to the judicial act and such judgment  or
decree shall be binding on the members whose names are listed i n
the note in the same manner as it would so have bound them if t hey
had 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 judicia l act
where particulars of the names of the members of Lloyd’scomprising those syndicates are already contained in the act orwhere any such note has already been filed in the records of th e
case.
(7) Any judicial act filed by or against Lloyd’s or any of its
members in connection with a policy underwritten by them shall be
served upon the Lloyd’s general representative in Malta at itsregistered address in Malta.
Appointment of 
intermediaries or ancillary insurance intermediaries
.
Added by:
XII. 2006.107.Substituted by:XXXIII. 2015.55.
Amended by:
XXVI.2018.81.Cap. 487.48B. Every authorised insurance or reinsurance
undertaking shall utilise the services of insurance intermediaries,
reinsurance intermediaries, tied insurance intermediaries andancillary insurance intermediaries which are:
(a) enrolled under the 
Insurance Distribution Act; or
(b) registered under Article 3 of the Insurance Distribution
Directive, or falling under Article 1(3) of the InsuranceDistribution Directive where applicable; or
(c) registered or regulated to carry out such services in a
non-Member State or non-EEA State in accordancewith the provisions of the laws applicable in suchState.
Policy conditions 
and scales of premiums.
Added by:
XXXIII. 2015.56.48C.   (1) An authorised undertaking shall not be required to
submit to the competent authority for its prior approval orsystematically notify the competent authority of:
(a) general and special policy conditions, of scales of
premiums, of the technical bases used in particular forcalculating scales of premiums and technicalprovisions, or of forms and other printed documentswhich the authorised undertaking intends to use in itsdealings with policyholders or ceding or retro-cedingundertakings;
(b) premium rates or proposed increases of premium rates,
other than as part of general price-control systems.
(2) Notwithstanding the provisions of sub-article (1), the
competent authority may require:
(a) in respect of general business, the notification of the
policy conditions, other documents and information
 70    CAP. 403. ]                    INSURANCE BUSINESS 
referred to in sub-article (1) for the purpose of
verifying compliance with the law applicable tocontracts of insurance;
(b) in respect of long term business, the notification of the
technical bases used in particular for calculating scalesof premiums and technical provisions for the solepurpose of verifying compliance with any actuarialprinciples which may be established by this Act,regulations or Insurance Rules issued thereunder.
Application of 
certain articles of the Insurance Distribution Act to insurance and reinsurance 
undertakings.
Added by:
XXVI.2018.82.48D.  An authorised insurance undertaking and an authorised
reinsurance undertaking carrying out insurance distributionactivities and reinsurance distribution activities in terms of the
Insurance Distribution Act shall comply with the applicableprovisions of the said Act and of any regulations, InsuranceDistribution Rules and Conduct of Business Rules issuedthereunder.
PART XI  
PROTECTION AND COMPENSATION FUND
Establishment of 
the Protection and Compensation Fund.
Amended by:
XVII. 2002.260;XII. 2006.108;XXXIII. 2015.57.49. There shall be established a fund, with such legal
personality or otherwise, as may be prescribed, to be known and  in
this Act referred to as the "Protection and Compensation Fund" -
(a) for the payment of any claims in respect of risks and of
commitments as may be prescribed against aninsurance undertaking carrying on business ofinsurance in Malta, remaining unpaid by reason of theinsolvency of such undertaking, subject to suchlimitations, restrictions and exclusions as may beprescribed; and
(b) for the payment of compensation to victims of road
traffic accidents as may be prescribed subject to suchlimitations and restrictions as may be prescribed.
Contributions to 
the Fund.
Amended by:
XII. 2006.109;XXXIII. 2015.58.50. (1) The Fund shall consist of all contributions made to it
under this Act and any regulations made thereunder, and of allother assets and revenues pertaining to it.
(2) All insurance undertakings, as prescribed by the
regulations, which carry on business of insurance in Malta shal l
contribute to the Fund in such amounts and to such limitations as
shall be prescribed and different amounts and limitations may b e
prescribed with respect to different kinds of business of insur ance
or different classes or part classes thereof, or different kind s of
insurance undertakings, or in view of other different circumsta nces.
Management of the 
Fund.
Amended by:
XXXIII. 2015.59.51. The Protection and Compensation Fund shall be managed
and otherwise dealt with in accordance with regulations made fo r
the purposes of this Act:
Provided that such regulations shall ensure that payments
made into the Fund by undertakings to carry on long term busine ss
shall be utilised for compensation with respect to long termbusiness and shall be treated separately and utilised exclusive ly for
                 INSURANCE BUSINESS          [CAP. 403.   7 1
compensation with respect to long term business, and payments
made into the Fund by undertakings to carry on general businessshall also be treated separately and shall be utilised exclusiv ely for
compensation with respect to general business:
Provided further that no payment shall be made from the
Fund to any person who is a shareholder in the insolventundertaking and holds twenty per centum  or more of the issued
shares of such undertaking.
Prescription in 
respect of claims for payment out of the Fund.
Amended by:
XXXIII. 2015.60.52. No claim for payment of compensation shall be made out
of the Fund unless such claim is made -
(a) as respects a claim under article 49( a), within two
years from the date the name of the undertaking isstruck off the register or such undertaking 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 theaccident relating to that claim.
Exemptions from 
income tax.Substituted by:XVII. 2002.261.53. All contributions made to the Protection and Compensation
Fund and any income of any funds belonging to the Fund shall beexempted from any liability for the payment of income tax underany law for the time being in force.
Power to issue 
regulations under this Part of the Act.
Amended by:
XVII. 2002.262.Substituted by:XII. 2006.110.54. The Minister may, after consultation with the competent
authority, make regulations to better implement the provisions of
this Part, including the transposition of any requirement orprovision as may arise under a Directive, Regulation or Decisio n of
the European Union or any other similar measure.
PART XII  
GENERAL PROVISIONS
Co-operation in 
supervisory duties and sharing of information.Substituted by:
XVII. 2002.263;
XXXIII. 2015.61.55. (1) Notwithstanding the provisions of article 59, the
competent authority shall co-operate and exchange information:
(a) with European regulatory authorities, and the
European Commission for the purpose of facilitatingthe supervision of insurance and reinsurance withinthe European Union and the application of theSolvency II Directive;
(b) with overseas regulatory authorities for the purposes
of the exercise of one or more of their regulatoryfunctions;
(c) with authorities or bodies, or persons listed in sub-
article (2).
(2) The competent authority shall co-operate and exchange
information with:
(a) authorities responsible for the supervision of credit
institutions and other financial organisations and theauthorities responsible for the supervision of financialmarkets;
 72    CAP. 403. ]                    INSURANCE BUSINESS 
(b) bodies involved in the liquidation and insolvency of
insurance or reinsurance undertakings and in othersimilar procedures;
(c) the authorities responsible for overseeing the bodies
involved in the liquidation and insolvency of insuranceundertakings, reinsurance undertakings and othersimilar procedures;
(d) persons responsible for carrying out statutory audits of
the accounts of insurance undertakings, reinsuranceundertakings and other financial institutions;
(e) bodies which administer compulsory winding-up
proceedings or guarantee funds, where thatinformation is necessary for the performance of theirduties;
(f) the authorities or bodies responsible for the detection
and investigation of breaches of company law;
(g) the authorities responsible for overseeing the persons
charged with carrying out statutory audits of theaccounts of insurance undertakings, reinsuranceundertakings, credit institutions, investment firms andother financial institutions; and
(h) actuaries appointed by insurance or reinsurance
undertakings carrying out actuarial tasks in relation tothose undertakings and the bodies responsible foroverseeing such actuaries.
(3) For the purposes of the exchanges of information referred
to in paragraphs ( c), (g) and ( h) of sub-article (2), the following
conditions, as a minimum, shall be met by the recipient of suchinformation:
(a) the information required must be for the purpose of
carrying out the overseeing or supervision of thefunctions or activities of such authorities, bodies orpersons;
(b) the information received by such authorities, bodies or
persons shall be subject to the duty of professionalsecrecy;
(c) where the information in the possession of the
competent authority originates from a Europeanregulatory authority or an overseas regulatoryauthority, it shall not be disclosed without the expressconsent of the European regulatory authority or theoverseas regulatory authority from which it originatesand, where appropriate, solely for the purposes forwhich that authority gave its consent.
(4) For the purposes of exchanges of information referred to in
paragraph ( f) of sub-article (2), the competent authority shall
ensure that, as a minimum, the following conditions shall be me t by
the recipient of such information:
(a) the information exchanged shall be intended for the
                 INSURANCE BUSINESS          [CAP. 403.   7 3
purpose of the detection and investigation of breaches
of company law;
(b) the information received shall be subject to the duty of
professional secrecy;
(c) where the information in the possession of the
competent authority originates from a Europeanregulatory authority or an overseas regulatoryauthority, it shall not be disclosed without the expressagreement of the European regulatory authority or theoverseas regulatory authority from which it originatesand, where appropriate, solely for the purposes forwhich the authority gave its agreement;
(d) such recipient shall provide the name and
responsibilities of the persons to whom suchinformation shall be sent:
Provided that, where the authorities or bodies perform their
tasks of detection or investigation with the assistance of pers ons
appointed for that purpose, in view of their specific competenc e,
and such persons are not employed with such bodies or persons,such information may only be exchanged with such persons if theconditions set out in this sub-article are met.
(5) The competent authority shall communicate to the
Commission and to other Member  States or EEA States the names
of the authorities, persons or bodies which may receive informa tion
in terms of this article.
(6) ( a) Without prejudice to the provisions of this article and
article 59, the competent authority may transmitinformation intended for the performance of their tasksto the following:
(i) the Central Bank of Malta, the central banks of
the European System of Central Banks(including the European Central Bank) and otherbodies with a similar function in their capacityas monetary authorities where this informationis relevant to their respective statutory tasks,including the conduct of monetary policy andrelated liquidity provision, oversight ofpayments, clearing and securities settlementsystems and safeguarding the stability of thefinancial system;
(ii) where appropriate, other national public
authorities responsible for overseeing paymentsystems; and
(iii) the European Systemic Risk Board, where that
information is relevant to carrying out its tasks.
(b) In an emergency situation, including a situation as
defined in Article 18 of Regulation (EU) No 1094/2010, the competent authority shall communicate,without delay, information to the central banks of theEuropean System of Central Banks (including the
 74    CAP. 403. ]                    INSURANCE BUSINESS 
European Central Bank) where that information is
relevant to their statutory tasks, including the conductof monetary policy and related liquidity provision,oversight of payments, clearing and securitiessettlement systems and safeguarding the stability ofthe financial system, and to the European SystemicRisk Board, where such information is relevant to itstasks.
(c) Such authorities or bodies may also communicate to
the competent authority such information as they mayneed for the purposes of article 59(4).
(7) Without prejudice to article 59, the competent authority
may exchange information with other departments of MemberStates central government administrations responsible forlegislation on the supervision of credit institutions, financia l
institutions, investment services and insurance and reinsuranceundertakings and to inspectors acting on behalf of thosedepartments provided that:
(a) such disclosures may be made only where necessary
for reasons of prudential control;
(b) persons having access to such information shall be
subject to professional secrecy.
(8) Without prejudice to the foregoing provision of this article ,
the competent authority may exercise the following powers at th e
request of, or for the purposes of, assisting a European regula tory
authority or an overseas regulatory authority:
(a) the power to impose, revoke or vary conditions on the
grant of an authorisation pursuant to the provisions ofarticle 7;
(b) the power to suspend or revoke 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 anauthorisation;
(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;
(g) the power to issue a directive under article 31A;
(h) the power to communicate to the European regulatory
authority information in its possession, whether suchinformation is the result of any of the above powers orotherwise; and
(i) the power to prohibit the free disposal of the
undertaking’s assets located in Malta in thecircumstances referred to in Articles 137 to 139 and
Article 144(2) of the Solvency II Directive; the
                 INSURANCE BUSINESS          [CAP. 403.   7 5
undertaking’s home Member State shall designate the
assets to be covered by such measures.
(9) There shall be meetings between an authorised insurance or
reinsurance undertaking, its approved auditors, and, in the cas e of
an undertaking authorised to carry on long term business, itsapproved actuary and the competent authority on a bilateral or a
multilateral basis as circumstances may warrant. Such meetingsmay be called by any of the parties, and shall in each case bechaired by the competent authority.
Co-operation with 
EIOPA.
Added by:
XXXIII. 2015.62.55A.  (1) The competent authority shall cooperate with EIOPA
for the purposes of the Solvency II Directive in accordance wit h
Regulation (EU) No 1094/2010.
(2) The competent authority shall provide EIOPA with all
information necessary to carry out its duties in accordance wit h
Regulation (EU) No 1094/2010.
Co-operation with 
third countries.
Added by:
XXXIII. 2015.62.55B.  (1) The competent authority may enter into co-operation
agreements with overseas regulatory authorities or with suchauthorities or bodies as defined in article 55(2), in countries  that
are not Member States or EEA States only if the informationdisclosed is subject to the guarantees of professional secrecy at
least equivalent to those required under articles 55 and 59. Su ch
exchange of information must be intended for the performance ofthe supervisory task of such overseas regulatory authorities,authorities or bodies.
(2) Where the information to be disclosed by the competent
authority to the authorities or bodies referred to in sub-artic le (1),
had originated from a European regulatory authority, it may onl y be
disclosed to an overseas regulatory authority with the expressagreement of such European regulatory authority which hadtransmitted it and, where appropriate, solely for the purposes for
which that authority had given its agreement.
Communication by 
auditors, etc., with the competent authority.
Amended by:
XXXIII. 2015.63.56. (1) No duty (including the duty of professional secrecy) to
which -
(a) an auditor or an actuary of an undertaking; or
(b) a person appointed to make a report under article
30(1),
may be subject, shall be regarded as contravened by reason of h is
communicating in good faith to the competent authority, whether  or
not in response to a request made by it, any information or opi nion
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
undertaking, 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 b ecomes
aware in his capacity as the person making the report which rel ates
 76    CAP. 403. ]                    INSURANCE BUSINESS 
to the business or affairs of the undertaking in relation to wh ich his
report is made.
(4) If it appears to the competent authority that any accountant s
or class of accountants who are persons to whom subarticle (1)applies are not subject to satisfactory rules made or guideline s
issued by a professional body specifying circumstances in whichmatters are to be communicated to the competent authority asmentioned in that subarticle, the competent authority may, afte r
consultation with such bodies as appear to the competent author ity
to represent the interests of accountants and authorisedundertakings, make rules for the purposes of this article, appl ying
to those accountants and specifying such circumstances; and it shall
be the duty of an accountant to whom the rules apply tocommunicate a matter to the competent authority in thecircumstances specified by the rules.
The Financial 
Services Tribunal.
Amended by:
XVII. 2002.264;XXXIII. 2015.64.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:
Cap. 330.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 appointed by the Minister under this Act and who, in hisopinion, possess the necessary expertise and experience in thebusiness of insurance; and the provisions of article 21(5) to ( 7) of
the said Act shall apply to the persons appointed pursuant to t his
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
functions and powers assigned to it under article 58, have thefunction 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 paymen t 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 trans fer of
long term business and appeals made to the Financial Services
Tribunal under this Act:
Cap. 330.Provided that regulations made under the said article 21
may distinguish between procedures made for the purposes of theprovisions of this Act and procedures made for the purposes of the
provisions of the 
Malta Financial Services Authority Act.
(5) The Minister may, for the purposes of this article, subject to
article 35, make regulations governing the procedure fordetermining an application for tr ansfer of long term business f iled
under that article, provided that in the absence of such regula tions
                 INSURANCE BUSINESS          [CAP. 403.   7 7
the Tribunal shall regulate its own procedure.
Appeals.
Amended by:
XIII. 2004.118;XVII. 2009.36;X. 2011.77;XXXIII. 2015.65;XXVI.2018.83.58. (1) Subject to the provisions of this article, an appeal shall
lie to the Financial Services Tribunal with respect to -
(a) any failure to inform an applicant within the term
provided in sub-article (9) or (10) of article 7;
(b) any refusal to issue an authorisation under articles 7 or
21;
(c) any condition imposed in an authorisation issued or
held under articles 7 or 21;
(d) any suspension or revocation of an authorisation under
article 26, or under any regulation made under this
Act;
(e) any one or more measures taken under article 28;
(f) any directive given under article 31A;
(g) any refusal of an application for transfer of general
business under article 33;
(h) any notice issued or any order made under articles 38,
38A and 38C;
(i) any administrative penalty imposed in respect of
infringements as may be prescribed under article 67.
(1A)  The Financial Services Tribunal shall have exclusive
competence to hear appeals on the matters listed in sub-article  (1).
Cap. 330. (2) The provisions of article 21 of the Malta Financial Services
Authority Act shall apply mutatis mutandis  to appeals that may be
brought before the Tribunal under this article.
Confidentiality.
Amended by:
XVII. 2002.265;XII. 2006.111;XX. 2007.135;X. 2011.78;XXXIII. 2015.66, 77.59. (1) Information obtained by the competent authority or by
its officers, employees or agents, including former officers,employees or agents, as well as by inspectors, auditors and exp erts
acting on behalf of the competent authority for the purposes of , or
pursuant to, any of the provisions of this Act, or of any regul ations
made thereunder, or of any Insurance Rules, or in the discharge  of
any functions under any of the said provisions, shall be treate d as
confidential and protected by the duty of professional secrecy.
(2) Without prejudice to cases covered by criminal law, the
persons referred to in sub-article (1) shall not disclose infor mation
obtained from an authorised insurance or reinsurance undertakin g
unless such disclosure of information be done in summary oraggregate form, so as not to enable the identity of suchundertaking, to whom such information relates, to be ascertaine d:
Provided that, such persons may disclose confidential
information in civil or commercial proceedings where anauthorised insurance or reinsurance undertaking has been declar ed
insolvent or is being compulsorily wound up, as long as suchinformation does not concern third parties involved in attempts  to
rescue that undertaking.
(3) Nothing in this Act shall authorise the competent authority
 78    CAP. 403. ]                    INSURANCE BUSINESS 
to enquire or cause an enquiry to be made in an authorised
insurance or reinsurance undertaking into the affairs of anyindividual policyholder of the authorised insurance or reinsura nce
undertaking except for the purpose of ensuring compliance withany of the provisions of this or of any other Act.
(4) Where the competent authority receives confidential
information from a European regulatory authority under this art icle
and article 55 it may only use such confidential information in  the
course of its duties and for the following purposes:
(a) to check that the conditions governing the carrying on
of business of insurance or reinsurance are met and tofacilitate the monitoring of the carrying on of suchbusiness especially with regard to the monitoring ofthe technical provisions, the Solvency CapitalRequirement, the Minimum Capital Requirement andthe system of governance;
(b) to impose penalties or adopt other administrative
measures and to consider representations received intheir regard;
(c) in appeals against decisions of the competent authority
under article 58; and
(d) in judicial proceedings under the Solvency II
Directive.
Cap. 373.(5) When an officer or an employee of an authorised insurance
or reinsurance undertaking has reason to believe that a transac tion
or a proposed transaction could involve money laundering or thefunding of terrorism, he shall act in compliance with the repor ting
and other obligations set out in the regulations made under art icle
12 of the Prevention of Money Laundering Act and any proceduresand guidance issued thereunder, and such disclosure shall notconstitute a breach of confidentiality.
(6) In this article, any reference to agents has the meaning
assigned to it in article 30(10).
Communication of 
confidential information.
Amended by:
XX. 2007.136;XXXIII. 2015.67;XXVI.2018.84.Cap. 377.Cap. 9.60. (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, policyholde rs
potential policyholders, insureds, claimants or other relatedparties -
(a) amongst insurance undertakings authorised to carry on
the business of insurance ("insurers");
Cap. 487.(b) amongst companies or persons registered or enrolled
under the Insurance Distribution Act ("intermediar-
ies");
(c) between insurers and intermediaries;
(d) between insurers, or intermediaries, or insurers and
intermediaries, and the Commissioner of Police,
provided that such exchange is compatible with or reasonably
required for the purpose of preventing, detecting or suppressin g
                 INSURANCE BUSINESS          [CAP. 403.   7 9
insurance fraud.
(2) Without prejudice to Regulation (EU) 2016/679 of the
European Parliament and of the Council of 27 April 2016 on theprotection of natural persons with regard to the processing of personal
data and on the free movement of such data, and repealing Direc tive
95/46/EC (General Data Protection Regulation), as amended fromtime to time, the collection, use, storage and transmission ofinformation for the purposes of the exchanging of personal datareferred to in sub-article (1) is deemed to be a necessary meas ure for
the prevention, detection or suppression of insurance fraud.
Service of notices, 
etc.
Amended by:
XII. 2006.112;XX. 2007.137;XXXIII. 2015.61.61. A notice or other document to be given or served under this
Act or any regulations or Insurance Rules made thereunder shall  be
deemed to have been duly given or served on a person if -
(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 knownregistered 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 servedin any of the manners aforesaid to or on an officer,secretary, or a clerk of that body or to any persondesignated by that body for that purpose as the casemay be; or
(f) in the case of a third country insurance or reinsurance
undertaking or Lloyd’s, it has been given or served tothe person designated under article 11(1)( b)(i) or
article 48A(3), respectively;
and the expression "officer", in relation to a body of persons shall
include an insurance agent, an insurance manager, or a person,other than an insurance agent or  an insurance manager, authoris ed
to act for that body of persons in the same manner and to the s ame
extent as an insurance agent.
Continuance of 
undertakings carrying on business of insurance, or companies enrolled as insurance manager or insurance broker.
Amended by:
XVII. 2002.266;XIII. 2004.119;XII. 2006.113;XXXIII. 2015.69.Cap. 487.62. (1) Regulations may be made under this Act providing
for -
(a) a body corporate, registered, incorporated or
constituted in a country outside Malta, which is similarin nature to a company as known under the laws ofMalta and which would, if it were such a company,qualify to be authorised under this Act as anundertaking carrying on business of insurance or acompany enrolled to act as an insurance manager orinsurance broker under the 
Insurance Distribution Act,
to be continued as authorised under this Act orenrolled under the 
Insurance Distribution Act; and
 80    CAP. 403. ]                    INSURANCE BUSINESS 
Cap. 487.(b) an undertaking carrying on business of insurance
authorised under this Act or a company enrolled to actas insurance manager or insurance broker under the
Insurance Distribution Act to be continued as a body
corporate registered, incorporated or constituted underthe laws of a country outside Malta, in either case bycomplying with the regulations;
Cap. 386. and the Companies Act shall, in respect of such bodies,
undertakings or companies, 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, undertaking 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  an
undertaking or company as stated in paragraph ( b) of sub-article
(1), as a body corporate under a foreign jurisdiction, shall no t take
place unless -
(i) such continuance (or similar process, including
conversion) is permitted by the law of suchforeign jurisdiction and is in accordance withsuch provisions thereof as may bring about suchcontinuance (or similar process); and
(ii) such continuance (or similar process) will
operate the continuation of the corporateexistence of the undertaking or company as, orits conversion into, a body corporate which willcontinue to retain or will succeed to all assets,rights, and liabilities of such undertaking orcompany.
(3) In this article, 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 intoshares.
Cap. 386.(4) The provisions of this article and of any regulations made
thereunder shall prevail over anything to the contrary containe d in
the Companies Act, or regulations made thereunder, with respect to
continuance of undertakings or companies.
Valuation 
regulations.63. (Deleted by Act XXXIII. 2015.70 ).
                 INSURANCE BUSINESS          [CAP. 403.   8 1
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;XX. 2013.98;XXXIII. 2015.71;XXVI. 2018.85.64. (1) The Minister may, after consultation with the
competent authority, make regulations to give effect to theprovisions of this Act and to amend or revoke any schedule ther eto
and may amend or revoke such regulations; and without prejudiceto the generality of the foregoing, the Minister may, by suchregulations, in particular, make provision in respect of any on e or
more of the following matters:
(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 undertaking authorised under this Act for thesound 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 maybe, of any fees, duties and such other charges payableto the competent authority in respect of any matterprovided for, by or under this Act or any regulationsmade under this article;
(d) any matter relating to or connected with any provision
contained in the Schedules;
(e) any matter that may or is to be prescribed under any
provision of this Act;
(f) any matter incidental to or connected with any of the
above;
(g) the penalties or other punishments to which persons
contravening or failing to comply with any provisionof any regulation made as aforesaid shall becomeliable, being penalties not exceeding one hundred and
fifty thousand euro (€150,000), in respect of any offenceand in respect of a continuing offence of a further penaltyand not exceeding two hundred and thirty euro (€230) foreach 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 b e
liable to a penalty of not less than two hundred and thirty eur o (€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 supervision of insurance an d
reinsurance undertakings in a group ("group supervision"). Any such
regulations may provide for cases of application, scope and lev els of
group supervision, provisions relating to the solvency of insur ance
groups, measures to facilitate group supervision including theappointment of the group supervisor, the verification of equiva lence of
supervision of a parent undertaking with its head office in a t hird
country, which forms part of a group and for a parent undertaki ng of
one or more insurance or reinsurance undertakings, which is a m ixed-
 82    CAP. 403. ]                    INSURANCE BUSINESS 
activity insurance holding company.
(4) The Minister may, after consultation with the competent
authority, make regulations providing for the establishment ofspecial purpose vehicles within the meaning of the Solvency IIDirective, including the conditions under which the activities of such
vehicles shall be carried on. Any such regulations may provide for
exemptions from any provisions of this Act or of any other law,  subject
to such modifications, variations and conditions as may be spec ified
therein, and in particular may provide that in so far as any of  the
provisions of the regulations are inconsistent with the provisi ons of
this Act or of any other law, the provisions of the regulations  shall
prevail, and the provisions of this Act or of any other law sha ll, to the
extent of the inconsistency, not apply.
(5) The Minister may, after consulting the competent authority,
make regulations exempting any person, activity or operation orany class or classes or part classes of business of insurance, from
all or any of the provisions of this Act or of any regulations made
thereunder, subject to such conditions or requirements includin g
the requirement of other forms of authorisation and notificatio n
procedures as may be prescribed.
(6) The Minister may, after consultation with the competent
authority, make regulations applicable to captive insuranceundertakings and captive reinsurance undertakings, exemptingfrom and modifying any of the provisions of this Act or of anyregulations made thereunder.
(7) The Minister may, after consultation with the competent
authority, make regulations to better implement the provisions of
this Act, including the transposition of any requirement orprovision as may arise under a Directive, Regulation or Decisio n of
the European Union or any other s imilar measure relevant for the
purposes of this Act. Any such regulations made to transpose an y
requirement or provision as may arise under a Directive, Regula tion or
Decision of the European Union or any other similar measure mayprovide for exemptions from any provisions of this Act or of an y other
law, subject to such modifications, variations and conditions a s may be
specified therein, and in particular may provide that in so far  as any of
the provisions of the regulations are inconsistent with the pro visions of
this Act or of any other law, the provisions of the regulations  shall
prevail, and the provisions of this Act or of any other law sha ll, to the
extent of the inconsistency, not apply.
(8) 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 gener al
business that may be effected and carried out under this Act.
(9) Regulations made under this Act may make such
exemptions, conditions or modifications as may be specifiedtherein in respect of different cases, circumstances or purpose s and
may give the competent authority such power of adaptation of th e
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 ari sing
                 INSURANCE BUSINESS          [CAP. 403.   8 3
from Malta’s international commitments.
(11) Regulations made under this Act and any amendment or
revocation of such regulations, may be published in the Englishlanguage only.
Exemption under 
Duty on Documents and 
Transfers Act.Amended by:
XX. 2007.139.65. (Deleted by Act XXXIII. 2015.72 ).
Exclusion of 
liability.
Amended by:
XII. 2006.115;XXXIII. 2015.73;XXVI.2018.86.66. Deleted by Act V .2020.46.
Offences and 
penalties.
Amended by:
XII. 2006.116;XX. 2007.140;L.N. 426 of 2007;
X. 2011.80;
XXXIII.2015.74,77XXVI.2018.87;V .2020.67.67. (1) Any person who contravenes or fails to comply with
any of the provisions of this Act shall be guilty of an offence  or
infringement as prescribed by regulations issued in terms of th is
article. 
(2) Any person -
(a) who, for the purpose of obtaining the issue of an
authorisation under this Act or pursuant to any of theprovisions of this Act or any regulations, Insurance
Rules or Conduct of Business Rules made thereunder,furnishes information or makes a statement or adeclaration which he knows to be inaccurate, false ormisleading in any material particular, or recklessly
furnishes information or makes a statement or a
declaration which is inaccurate, false or misleading inany material particular; or
(b) who is knowingly a party to, or procures or aids and
abets, any contravention of any provision of this Actany regulations, Insurance Rules or Conduct of BusinessRules made thereunder, or
(c) who intentionally obstructs a person exercising rights
conferred by this Act any regulations, Insurance Rules
or Conduct of Business Rules made thereunder, or
(d) who is knowingly a party to the carrying on of the
business of insurance with a fraudulent intent or for a
fraudulent purpose; or
(e)who being a director, a controller, an officer or an
employee of an undertaking -
(i) fails to take all reasonable steps to secure
compliance by the undertaking with any of theprovisions of this Act or of any regulations, ofany regulations, Insurance Rules or Conduct ofBusiness Rules made thereunder, or anyauthorisation or permit issued thereunder; or
(ii) fails to take reasonable steps to ensure the
correctness of the statements made or other
 84    CAP. 403. ]                    INSURANCE BUSINESS 
information given under any of the provisions
aforesaid; or
(iii) removes, destroys, conceals or fraudulently
alters any book, document or other paper withintent to avoid detection of the commission of anoffence under any of the provisions aforesaid,
shall be guilty of an offence.
(3) For the purposes of subarticle (2)( f), the expression
"officer", in relation to an undertaking, shall include an insu rance
agent, an insurance manager, or a person, other than an insuran ce
agent or an insurance manager, authorised to act for theundertaking in the same manner and to the same extent as aninsurance agent.
(4) The Minister shall make regulations under this article
prescribing penalties for offences against this Act, and suchregulations 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 four 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 four hundred and sixty-six thousand euro(€466,000); or
(c) may provide for both such fine and imprisonment.
(6) The Minister may by the regulations made under this article
provide for administrative penalties in respect of infringement s, as
may be prescribed, which may be imposed and recovered by thecompetent authority without recourse to a court hearing;administrative penalties shall be due to the competent authorit y 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 complycontinues, a further penalty not exceeding one hundred and sixt een
euro (€116) for each day during which the infringement or failu re to
comply continues:
                 INSURANCE BUSINESS          [CAP. 403.   8 5
Proceedings for an 
offence under this 
Act.
Amended by:
XII. 2006.117.68. (1) No proceedings for an offence under this Act and any
regulations made thereunder other than an infringement to whicharticle 67(6) applies shall be commenced without the sanction o f
the Attorney General.
(2) The provisions of this Act and any regulations made
thereunder shall not affect any criminal proceedings that may b e
competent under any other law.
Savings.
Amended by:
XII. 2006.118;XIX. 2010.50;X. 2011.81;XXXIII. 2015.77.69. (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 f orce
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 t han the
appointed date, conform with the provisions of this Act orotherwise cease to carry on the business it was licensed to car ry on,
and shall until the appointed date or until it conforms with th e
provisions of this Act, whichever is the earlier, continue to b e
governed by the provisions of the Act. For the purpose of thisarticle "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 di d
not, on the appointed date, conform with the provisions of this  Act,
that company shall be deemed to have given notice to thecompetent authority under article 39 on the appointed date to c ease
to carry on the business it was licensed to carry on, on theappointed date, and to have been issued with a permit by thecompetent authority under that article on the appointed date tocease to carry on such business on the appointed date and to se rvice
that business as from that date. The competent authority mayimpose such conditions with regard to the servicing of that bus iness
as it may deem proper.
Cap. 487.(4) Every licence issued or renewed or other action whatever
taken or commenced under the Act in so far as it applies toinsurance brokers and insurance salesmen, shall continue in for ce
and to be valid as if such licence were a certificate of enrolm ent
issued or as if such other action were action taken or commence d
under the 
Insurance Distribution Act.
(5) For the purposes of this article "licence" includes an
authority, permit, approval and appointment.
Cap. 249.(6) Without prejudice to the provisions of article 12 of the
Interpretation Act, all regulations, orders and other instruments
which were kept in force by the Act and all regulations, orders  and
other instruments made under the Act, and any agreement andarrangement which were made in virtue of the Act, any regulatio n,
order or other instrument shall, if and as in force immediatelybefore the commencement of this article, be deemed to have been
*Repealed by this Act.
 86    CAP. 403. ]                    INSURANCE BUSINESS 
made under or in virtue of this Act and shall continue in force  and
may be amended, altered, repealed or otherwise dealt withaccordingly.
(7) All references in any enactment and in any instrument or
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 direc tive
issued by the competent authority, and any reference in any law  or
regulation to an insurance directive shall be deemed to be areference to Insurance Rules.
(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 establis hed
by article 49 without the need of any formality other than this  Act.
                 INSURANCE BUSINESS          [CAP. 403.   8 7
Deleted by XII. 2006.119.
LONG TERM BUSINESS
Classes of Long Term BusinessAmended by:
XVII. 2002.268;XIII. 2004.121.            FIRST SCHEDULE
Amended by:
XII. 2006.120;XXXIII. 2015.75.            SECOND SCHEDULE
(Article 5)
Number Class Description
I Life and annuity Contr acts of insurance on human life or
contracts to pay annuities on human life, butexcluding (in each case) contracts withinClasses II and III of this Schedule.
II Marriage and birth Contr acts of insurance to provide a sum on
marriage or on the birth of a child, beingcontracts expressed to be in effect for a periodof more than one year.
III Linked long term Contr acts of insurance on human life or
contracts to pay annuities on human life wherethe benefits are wholly or partly to bedetermined by reference to the value of, or the
income from, property of any description(whether or not specified in the contracts) orby reference to fluctuations in, or in an indexof, the value of property of any description(whether or not so specified).
IV Permanent health Contracts of insurance providing specified
benefits against risks of persons becomingincapacitated in consequence of sustaininginjury as a result of an accident or of anaccident of a specified class or of sickness orinfirmity, being contracts that -
(a) are expressed to be in effect for a
period of not less than five years, oruntil the normal retirement age forthe persons concerned, or withoutlimit of time, and
 88    CAP. 403. ]                    INSURANCE BUSINESS 
(b) either are not expressed to be
terminable by the insurer, or areexpressed to be so terminable onlyin special circumstances mentionedin the contract.
V Tontines Contracts of insurance providing for
operations  whereby  associations  ofsubscribers are to be set up with a view tocapitalising their contributions jointly andsubsequently distributing the assets thusaccumulated among the survivors or amongthe beneficiaries of the deceased.
VI Capital redemption Contracts of insurance providing for capita l
redemption operations based on actuarialcalculation whereby, in return for single orperiodic payments agreed in advance,commitments of specified duration andamount are undertaken.
V I I Pension  fund
management(a) Contracts to manage the investments of
pension funds, and in particular the assetsrepresenting the reserves of bodies that effectpayments on death or survival or in the eventof discontinuance or curtailment of activity; or
(b) Contracts or the kind mentioned in
paragraph ( a) above that are combined with
contracts of insurance covering eitherconservation of capital or payment of aminimum interest.
VIII C o llective
insuranceContracts of a kind referred to in Article
2(3)( b)(v) of the Solvency II Directive.
IX Social insurance Contracts of a kind referred to in Article
2(3)(c) of the Solvency II Directive.
                 INSURANCE BUSINESS          [CAP. 403.   8 9
GENERAL BUSINESS
PART I - CLASSES
Classification of risks according to classes of insuranceAmended by:
XXXIII. 2015.76.            THIRD SCHEDULE
(Articles 5 and 7)
Number Class
1 Accident (including industrial injury and occupational disease s)
(a) fixed pecuniary benefits;
(b) benefits in the nature of indemnity;
(c) combination 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 Goods in transit (including merchandise, baggage, and all othe r
goods)
All damage to or loss of goods in transit, or baggage, irrespec tive 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:
 90    CAP. 403. ]                    INSURANCE BUSINESS 
(a) fire;
(b) explosion
(c) storm;
(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 s uch as
theft, other than those falling within class 8.
10 Motor vehicle liability
All liability arising out of the use of motor vehicles operatin g on the
land (including carrier’s liability).
11 Aircraft liability
All liability arising out of the use of aircraft (including car rier’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 an d 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).
                 INSURANCE BUSINESS          [CAP. 403.   9 1
PART II - GROUPS OF CLASSES
The following names shall be given to authorisations which simu ltaneously cover the
following classes: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;
(i) indirect trading losses other than those specified above;
(j) other financial loss (non-trading);
(k) other financial loss (not specified in ( j) above).
17 Legal expenses
Legal expenses (including costs of litigation).
18 Assistance
(a) assistance for persons who get into difficulties while
travelling, while away from home or while away from theirhabitual residence;
(b) assistance in other circumstances.
Number Description Classes of Business
1 Accident and Health Classes 1 and 22 Motor Classes 1 ( d), 3, 7 and 10
3 Marine and Transport Classes 1 ( d), 4, 6, 7 and 12
4 Aviation Classes 1 ( d), 5, 7 and 11
5 Fire and other Damage to
PropertyClasses 8 and 9
6 Liability Classes 10, 11, 12 and 13
7 Credit and Suretyship Classes 14 and 158 General All classes
 92    CAP. 403. ]                    INSURANCE BUSINESS 
Deleted by: XII. 2006.121.FOURTH SCHEDULE Amended by:
XVII. 2002.269;XIII. 2004.122.(Article 13)