INSURANCE BUSINESS ACT

INSURANCE BUSINESS

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, V of 2020 and Act XLVI of 2021 and XXXV of 2023 and

XXXII of 2024.

The short title of this Act is the Insurance Business Act.

Amended by

XVII. 2002.268;

XIII. 2004.121.

Deleted by XII. 2006.119.

(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 disseminated

to the public by means of all types of media, other than a prospectus,

which promotes the purchase or procurement of a service or product

and which is addressed by an authorised insurance undertaking to 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

m a t t e r c o n n e c t e d t h e r ew i t h o r a n c i l l a r y t h e r e t o , m e a n s a n

authorisation 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 direct

general business and, or long term business, and includes an

undertaking authorised to carry on direct and reinsurance business;

"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 foreign

corporation;

"branch" m eans premises o f 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 business

or class or classes or part classes of general business as

respectively specified in the Second Schedule and Part I of the

Third Schedule, and, without prejudice to anything contained in

any other law, includes -

(a) the effecting and carrying out, by a person not carrying

on business of banking, of -

(i)

contracts for fidelity bonds, performance bonds,

administration bonds, bail bonds or customs

bonds or similar contracts of guarantee, being

contracts effected by way of business (and not

merely incidentally to some other business

carried on by the person effecting them) in

return for the payment of one or more premiums;

(ii) capital redemption contracts based on actuarial

calculation whereby, in return for single or

periodic

payments

agreed

in

advance,

commitments of specified duration and amount

are 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 carrying

on business of banking" includes "a person not

carrying on investment services";

(b) any business carried on in connection with or ancillary

to business of insurance;

(c) unless otherwise specified, business of reinsurance;

"captive insurance undertaking" means an authorised insurance

undertaking, owned either by a financial undertaking, other than an

insurance or reinsurance undertaking or a group of insurance or

reinsurance undertakings within the meaning of article 2, or by a

non-financial undertaking, the purpose of which is to provide

insurance cover exclusively for the risks of the undertaking or

undertakings to which it belongs or of an undertaking or

undertakings of the group of which it is a member;

"captive reinsurance undertaking" means an authorised

reinsurance undertaking, owned either by a financial undertaking,

other than an insurance or reinsurance undertaking or a group of

insurance or reinsurance undertakings within the meaning of article

2, or by a non-financial undertaking, the purpose of which is to

provide reinsurance cover exclusively for the risks of the

undertaking or undertakings to which it belongs or of an

undertaking or undertakings of the group of which it is a member;

"cell" has the same meaning as is assigned to it by the

Companies Act;

"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 situation in

which two or more natural or legal persons are permanently linked

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;

"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 articles 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

consideration, to pay to or for the account of the insured a sum of

money or other consideration, whether by way of indemnity against

loss, damage or liability or otherwise, on the happening of a

specified event with respect to which there is an element of

uncertainty 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 Directive

2013/34/EU of the European Parliament and of the Council of 26

June 2013 on the annual financial statements, consolidated

financial statem ents and related reports of certain types of

undertakings, amending Directive 2006/43/EC of the European

Parliament and of the Council and repealing Council Directives 78/

660/EEC and 83/349/EEC, or a similar relationship between any

natural 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 individual

occupying the position of a director of the undertaking, by

whatever name he may be called, empowered to carry out

substantially the same functions in relation to the direction of the

undertaking as those carried out by a director and, in respect of a

third country insurance undertaking or a third country reinsurance

undertaking, includes a member of a local board, and the person

designated as the representative of that undertaking for the purpose

of article 11(1)(b)(i);

"document" or "documentation" includes information recorded in

any form and, in relation to information recorded otherwise than in

legible form, references to its production include references to

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 2

May, 1992 as amended by the Protocol signed at Brussels on the

17th 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 Regulation

(EU) No 1094/2010;

"establishment" means the head office, or any branches of an

authorised insurance undertaking or an authorised reinsurance

undertaking;

"European insurance undertaking" means an undertaking having

its head office in a Member State or an EEA State, other than

Malta, pursuing the activity of direct insurance within the meaning

of Article 2 of the Solvency II Directive, which has received

authorisation in accordance with Article 14 of the Solvency II

Directive;

"European regulatory authority" means the supervisory authority

or supervisory authorities as defined in Article 13 of the Solvency

II Directive, designated by a Member State or EEA State, other

than Malta, empowered by law or regulation to supervise insurance

or reinsurance undertakings;

"European reinsurance undertaking" means an undertaking

having its head office in a Member State or an EEA State, other

than Malta, pursuing business restricted to reinsurance within the

meaning of Article 2 of the Solvency II Directive which has

received authorisation in accordance with Article 14 of the

Solvency II Directive;

"European right" means the entitle-ment of an authorised

insurance undertaking, authorised reinsurance undertaking,

European insurance undertaking or a E uropean reinsurance

undertaking to establish a branch, or provide services, in a Member

State or an EEA State, other than that in which it has its head

office -

(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 under

this Act, or Insurance Rules issued by the competent

authority pursuant to this Act, implementing such

requirements;

"European Systemic Risk Board" means the European Systemic

Risk Board established by Regulation (EU) No 1092/2010 of the

European Parliament and of the Council of 24 November 2010 on

European Union macro-prudential oversight of the financial system

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 the

meaning of sub-paragraphs (1), (17) and (22) of

paragraph (1) of Article 3 of Directive 2013/36/EU

respectively;

(b) an insurance undertaking, or a reinsurance undertaking

or an insurance holding company within the meaning

of 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;

"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 undertaking

or its subsidiaries hold a participation, as well as

undertakings linked to each other 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 the annual financial statements, consolidated

financial statements and related reports of certain

types of undertakings, amending Directive 2006/43/

EC of the European Parliament and of the Council and

repealing Council Directives 78/660/EEC and 83/349/

EEC; or

(b) is based on the establishment, contractually or

otherwise, of strong and sustainable financial

relationships among those undertakings, and that may

include mutual or mutual-type associations, provided

that

(i)

one of those undertakings effectively exercises,

through centralised coordination, a dominant

influence over the decisions, including financial

decisions, of the other undertakings that are part

of the group; and

(ii) the establishment and dissolution of such

relationships for the purposes of Title III of the

Solvency II Directive are subject to prior

approval by the group supervisor,

where the undertaking exercising the centralised coordination shall

be considered as the parent undertaking, and the other undertakings

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 the

Council of 16 September 2009 relating to insurance against civil

liability in respect of the use of motor vehicles, and the

enforcement of the obligation to insure against such liability;

"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);

"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 on

insurance distribution (recast), as amended from time to time, and

includes any delegated acts and any technical standards that have been

or may be issued thereunder;

"insurance manager" means a person enrolled as such under the

Insurance Distribution Act;

"Insurance Rules" means rules in respect of the business of

insurance issued by the competent authority under various articles

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 is

payable under a contract of insurance on the happening of a

specified event;

"insurer" means the party to a contract of insurance who agrees

to pay a sum of money or other consideration on the happening of a

specified event;

"Lloyd’s" 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);

" M a l t a ’s i n t e r n a t i o n a l c o m m i t m e n t s " m e a n s M a l t a ’s

commitments, responsibilities and obligations arising out of

membership of th e European U nion an d mem bersh ip of, or

affiliation to, or relationship with, any international, global or

regional organisations or grouping of countries or out of any treaty,

convention or other international agreement, however called,

w he t h e r b i la t e r a l o r m u lt i l a t e r a l , i n c l u d i n g M e m o r a n d a o f

Understanding, to which Malta is a party;

" M e m b e r St a t e " m e a n s a M e m b e r St a t e o f t h e E u r o p e a n

Communities;

"Minister" means theMinister responsible for the regulation of

Financial Services;

"money laundering" has the same meaning as is assigned to it by

the Prevention of Money Laundering Act;

"motor vehicle" has the same meaning as assigned to it by article

2 of the Motor Vehicle Insurance (Third Party Risks) Ordinance;

"motor vehicle liability insurance business" means the business of

insurance in class 10 as specified in Part I of the Third Schedule;

"officer", in relation to an undertaking, includes a director,

manager or company secretary or any person effectively acting in

such capacity whether formally appointed or not;

"outsourcing" means an arrangement of any form between an

authorised insurance or reinsurance undertaking and a service

provider, whether a supervised entity or not, by which that service

provider performs a process, a service or an activity, whether

d i r e c t l y o r b y s u b - o u t s o u r c i n g , w h i c h w o u l d o t h e r w i se b e

performed by the authorised insurance or reinsurance undertaking

itself, and "outsource" shall be construed accordingly;

"overseas regulatory authority" means an authority in a country

or territory outside Malta, that is not a Member State or EEA State,

which exercises any regulatory or supervisory function in relation

to financial services corresponding to a function of the competent

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 control,

of 20% or more of the voting rights or capital of an undertaking;

"participating undertaking" means an undertaking which is either

a parent undertaking or other undertaking which holds a

participation, or an undertaking linked with another undertaking 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 the

annual financial statements, consolidated financial statements and

related reports of certain types of undertakings, amending Directive

2006/43/EC of the European Parliament and of the Council and

repealing Council Directives 78/660/EEC and 83/349/EEC;

"policy", in relation to business of insurance, means and includes

a policy or a similar document, by whatever name it may be called,

evidencing a contract of insurance;

"policyholder" means the person who for the time being is the

legal holder of the policy for securing the contract with the insurer;

"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 the Council of 15 December 2004

on the harmonisation of transparency requirements in relation to

information about issuers whose securities are admitted to trading

on a regulated market, and amending Directive 2001/34/EC, as well

as the conditions regarding aggregation thereof laid down in Article

12(4) and (5) of that Directive, or which makes it possible to

exercise a significant influence over the management of the

undertaking in which that holding subsists, and "qualifying

shareholder" shall be construed accordingly

Provided that, in determining whether the criteria for a

qualifying shareholding are fulfilled, the competent authority shall

not take into account voting rights or shares which investment

firms or credit institutions may hold as a result of providing the

underwriting of financial instruments and, or placing of financial

instruments on a firm commitment basis in terms of point (6) of

Section A of Annex 1 to Directive 2014/65/EU of the European

Parliament and of the Council of 15 May 2014 on markets in financial

instruments and amending Directive 2002/92/EC and Directive 2011/

61/EU (recast), provided that those rights are, on the one hand, not

exercised or otherwise used to intervene in the management of the

issuer and, on the other, disposed of within one year of acquisition;

"reconstruction" has the same meaning as in the Companies Act;

"regulated market" means either of the following

(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

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 15

May 2014 on markets in financial instruments and

amending 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 the

following 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 the

instruments dealt in on the regulated market or

markets in Malta;

"Regulation (EU) No 1094/2010" refers to Regulation (EU) No

1094/2010 of the European Parliament and of the Council of 24

November 2010 establishing a European Supervisory Authority

(European Insurance and Occupational Pensions Authority),

amending Decision No 716/2009/EC and repealing Commission

Decision 2009/79/EC;

"reinsurance" means one of the following

(a) the activity consisting in accepting risks ceded by an

insurance undertaking or third-country insurance

undertaking, or by another reinsurance undertaking or

third-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 as

the contents are covered by the same insurance policy,

any risk related to property situated in Malta;

(b) in the case where the insurance relates to vehicles of

any type, any risk related to any vehicles registered in

Malta

Provided that, where a motor vehicle is dispatched

from a Member State or an EEA State into Malta, the

risk is deemed to be situated in Malta, immediately

upon acceptance of delivery by the purchaser for a

period of thirty days, even though the vehicle has not

been formally registered in Malta;

(c) in the case where the insurance relates to travel or

holiday risks, whatever the class concerned, any risk

related to travel or holiday if the policy covering the

risk is of a duration of four months or less and the

policy is taken out in Malta;

(d) in the case where the insurance relates to any risk of

any kind, other than a risk specified in the foregoing

paragraph (a), (b) or (c), any risk of any such kind if

the policyholder has his habitual residence in Malta or,

where the policyholder is a legal person if the

establishment, to which the contract relates, is situated

in Malta

Provided that, for the purposes of this paragraph, Malta

shall include an exclusive economic zone area and

environment protection area as defined in the Exclusive

Economic Zone Act;

"risk situated outside Malta" means a risk which is not a risk

situated in Malta;

"subsidiary" has the same meaning as is assigned to the term

"subsidiary undertaking" by the Companies Act;

"Solvency II Directive" means Directive 2009/138/EC of the

European Parliament and of the Council of 25 November 2009 on

t he taki ng -u p and pu rsui t of t he b usi ness o f In surance and

Reinsurance (Solvency II) (recast), as amended from time to time,

and includes any delegated acts and any technical standards that

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 require

authorisation as an authorised insurance undertaking pursuant to

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 would

require authorisation as an authorised reinsurance undertaking in

accordance with article 7 as if its head office were situated in

Malta;

"undertaking" refers to an undertaking whose head office is in

Malta or in a country outside Malta;

"undertaking whose head office is in Malta" means a limited

liability company formed and registered in Malta in accordance

with the Companies Act;

"working days" shall not include Saturdays and the days referred

to in the National Holidays and Other Public Holidays Act.

(2) The objective of this Act is, in part, to 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 April

2014 amending Directives 2003/71/EC and 2009/138/

EC and Regulations (EC) No 1060/2009, (EU) No

1094/2010 and (EU) No 1095/2010 in respect of the

powers of the European Supervisory Authority

(European Insurance and Occupational Pensions

Authority) and the European Supervisory Authority

(European Securities and Markets Authority);

(c) Directive 2009/103/EC of the European Parliament

and of the Council of 16 September 2009, relating to

insurance against civil liability in respect of the use of

motor vehicles, and the enforcement of the obligation

to insure against such liability, as amended from time

to time; and

(d) any other European Union Directives and Regulations

that may be issued and amended from time to time

relating to the regulation of and the prudential

requirements applicable to insurance and reinsurance

undertakings,

and consequently this Act and any regulations and Insurance Rules

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, the

English text shall prevail.

PART II

SUPERVISION OF BUSINESS OF INSURANCE

Amended by

XII. 2006.120;

(Article 5)

XXXIII. 2015.75.

LONG TERM BUSINESS

Classes of Long Term Business

Number

Class

Description

I

Life and annuity

C o n t r a c t s o f i n su r a n c e o n h u m a n l i f e o r

contracts to pay annuities on human life, but

excluding (in each case) contracts within

Classes II and III of this Schedule.

II

Marriage and birth

Contracts of insurance to provide a sum on

marriage or on the birth of a child, being

contracts expressed to be in effect for a period

of more than one year.

III

Linked long term

C o n t r a c t s o f i n su r a n c e o n h u m a n l i f e o r

contracts to pay annuities on human life where

the benefits are wholly or partly to be

determined by reference to the value of, or the

income from, property of any description

(whether or not specified in the contracts) or

by reference to fluctuations in, or in an index

of, the value of property of any description

(whether or not so specified).

IV

Permanent health

Contracts of insurance providing specified

benefits against risks of persons becoming

incapacitated in consequence of sustaining

injury as a result of an accident or of an

accident of a specified class or of sickness or

infirmity, being contracts that -

(a) are expressed to be in effect for a

period of not less than five years, or

until the normal retirement age for

the persons concerned, or without

limit of time, and

INSURANCE BUSINESS

(b) either are not expressed to be

terminable by the insurer, or are

expressed to be so terminable only

in special circumstances mentioned

in the contract.

V

Tontines

Contracts of insurance providing for

operations whereby associations of

subscribers are to be set up with a view to

capitalising their contributions jointly and

subsequently distributing the assets thus

accumulated among the survivors or among

the beneficiaries of the deceased.

VI

Capital redemption

Contracts of insurance providing for capital

redemption operations based on actuarial

calculation whereby, in return for single or

periodic payments agreed in advance,

commitments of specified duration and

amount are undertaken.

VII

Pension

fund

(a) Contracts to manage the investments of

management

pension funds, and in particular the assets

representing the reserves of bodies that effect

payments on death or survival or in the event

of discontinuance or curtailment of activity; or

(b) Contracts or the kind mentioned in

paragraph (a) above that are combined with

contracts of insurance covering either

conservation of capital or payment of a

minimum interest.

VIII

Collective

Contracts of a kind referred to in Article

insurance

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

It shall be the duty of the competent authority to carry out the

functions assigned to it by or under this Act and any regulations,

Insurance Rules or Conduct of Business Rules made thereunder and to

ensure that insurance and reinsurance undertakings carrying on the

business of insurance in or from Malta comply with the provisions of

this Act and of any regulations made thereunder, with any Insurance

Rules and Conduct of Business Rules made and directives issued by

the competent authority in virtue of this Act and of any regulations

made thereunder and with the conditions specified in their respective

authorisation.

(Articles 5 and 7)

GENERAL BUSINESS

PART I - CLASSES

Classification of risks according to classes of insurance

Class

Accident (including industrial injury and occupational diseases)

(a) fixed pecuniary benefits;

(b) benefits in the nature of indemnity;

(c) combination of the two;

(d) injury to passengers.

Sickness

(a) fixed pecuniary benefits;

(b) benefits in the nature of indemnity;

(c) combination of the two.

Land vehicles (other than railway rolling stock)

All damage to or loss of

(a) land motor vehicles;

(b) land vehicles other than motor vehicles.

Railway rolling stock

All damage to or loss of railway rolling stock.

Aircraft

All damage to or loss of aircraft.

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.

Goods in transit (including merchandise, baggage, and all other

goods)

All damage to or loss of goods in transit, or baggage, irrespective of

the form of transport.

Fire and natural forces

All damage to or loss of property (other than property included in

classes 3, 4, 5, 6 and 7) due to

(a) fire;

(b) explosion

(c) storm;

(d) natural forces other than storm;

(e) nuclear energy;

(f)

land subsidence.

Other damage to property

All damage to or loss of property (other than property included in

classes 3, 4, 5, 6 and 7) due to hail or frost, and any event such as

theft, other than those falling within class 8.

Motor vehicle liability

All liability arising out of the use of motor vehicles operating on the

land (including carrier’s liability).

Aircraft liability

All liability arising out of the use of aircraft (including carrier’s

liability).

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).

General liability

All liability other than those falling within classes 10, 11 and 12.

Credit

(a) insolvency (general);

(b) export credit;

(c) instalment credit;

(d) mortgages;

(e) agricultural credit.

Suretyship

(a) suretyship (direct);

(b) suretyship (indirect).

INSURANCE BUSINESS

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).

Legal expenses

Legal expenses (including costs of litigation).

Assistance

(a) assistance for persons who get into difficulties while

travelling, while away from home or while away from their

habitual residence;

(b) assistance in other circumstances.

PART II - GROUPS OF CLASSES

The following names shall be given to authorisations which simultaneously cover the

following classes

Number

Description

Classes of Business

Accident and Health

Classes 1 and 2

Motor

Classes 1 (d), 3, 7 and 10

Marine and Transport

Classes 1 (d), 4, 6, 7 and 12

Aviation

Classes 1 (d), 5, 7 and 11

Fire and other Damage to

Classes 8 and 9

Property

Liability

Classes 10, 11, 12 and 13

Credit and Suretyship

Classes 14 and 15

General

All classes

INSURANCE BUSINESS

(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 and

supervisory practices in the application of this Act, and of the

regulations and Insurance Rules made thereunder, pursuant to the

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 in

accordance with Article 16 of Regulation (EU) No

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 made

thereunder. The competent authority may amend or revoke such

Insurance Rules and, Conduct of Business Rules, and any amendment

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 required

for the purpose of implementing any guidelines, recommendations

issued by EIOPA under Article 16 of Regulation (EU) No 1094/2010,

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 insurance

undertakings and others as may be specified therein.

PART III

AUTHORISATION FOR CARRYING ON BUSINESS

OF INSURANCE

Amended by

XVII. 2002.269;

(Article 13)

XIII. 2004.122.

Deleted by: XII. 2006.121.

(1) Subject to the provisions of sub-article (2), for the

purposes of this Act, business of insurance is divided into long 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 group of

classes as specified in the Third Schedule may also insure risks

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 risks

included in classes 14, 15 and 17 in Part I of the Third Schedule

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

conditions laid down in sub-article (2) and either of the following

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, notwithstanding

the fact that it contains related and subsidiary provisions within

general business class 1 or 2 of Part I of the Third Schedule to the

Act, if its principal object is that of a contract falling within the

Second Schedule to the Act and if such contract is effected or

carried out by an undertaking authorised under article 7 to carry 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 business

contracts of insurance of a kind specified in the Insurance Rules,

contain such conditions or include such requirements or

arrangements as may be determined by such Insurance Rules.

(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 European

right.

(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 not

constituting business of insurance for any or all of the

purposes of this Act;

(b) prescribing the persons who may carry out such

services and activities and the persons to or for whom

such services and activities may be rendered;

(c) providing for any matter incidental to or connected

with the above, and for the better carrying out of the

provisions of this sub-article.

(4) In the event of a doubt as to whether an activity constitutes

business of insurance, or whether business of insurance is or is not

being carried on in or from Malta, the matter shall be conclusively

determined by the competent authority.

(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 outside

Malta;

(b) in the case of a third country insurance undertaking or

a third country reinsurance undertaking, in or from

Malta,

such of the classes of business of insurance specified in the Second

or Third Schedule, or such parts of those classes, as may be

specified in the authorisation.

(2) An authorisation under this article may be restricted to

business of reinsurance; and an undertaking may not carry on

business of reinsurance by virtue of an authorisation under this

article unless the authorisation expressly extends to such business.

(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 a

European right, subject to a notification to the competent authority

as determined in accordance with regulations made under article

64. (4) Without prejudice to article 5, an authorisation under this

article shall also be required if an undertaking, which holds an

authorisation to carry on business of insurance or reinsurance in a

class or classes of insurance, intends to extend its business to a

class or to classes of business other than those classes for which it

is already authorised.

(5) The competent authority shall have the power to require

any undertaking to provide such information as it may deem

necessary for the purpose of determining an application for

authorisation.

(6) An authorisation under this article shall only be issued if

the competent authority is satisfied, on the basis of the information

required to be submitted under this Act and any information

received 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 the

appropriate 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 this

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 within

six months of receiving a properly completed application form

together with the requisite documentation required to be submitted

under this Act; and if it refuses to issue the authorisation it shall

inform the applicant in writing of the reasons for the refusal.

(10) Where the authorisation sought is one restricted to

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 application

for an authorisation.

(12) On the issue to an undertaking of an authorisation under

this article, any previous authorisation of that undertaking under

this article shall lapse.

(13) The competent authority shall notify EIOPA of every

authorisation issued in terms of this article.

(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 the

competent 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 business

of insurance and operations arising directly

therefrom, to the exclusion of all other

commercial business;

(ii) in the case of an undertaking which intends to

carry on business restricted to reinsurance, the

undertaking’s objects are limited to the business

of reinsurance and related operations; this may

include a holding company function and

activities with respect to financial sector

activities within the meaning of Article 2(8) of

Directive 2002/87/EC of the European

Parliament and of the Council of 16 December

2002 on the supplementary supervision of credit

institutions,

insurance

undertakings

and

investment firms in a financial conglomerate and

amending Council Directives 73/239/EEC, 79/

267/EEC, 92/49/EEC, 92/96/EEC, 93/6/EEC and

93/22/EEC, and Directives 98/78/EC and 2000/

12/EC of the European Parliament and of the

Council, as amended from time to time;

(c) the undertaking has disclosed to the satisfaction of the

competent authority such information as the competent

authority has requested of it in relation to persons who

will, upon the authorisation of the undertaking, have

any proprietary, financial or other interest in, or in

connection with, that undertaking;

(d) the undertaking has disclosed the identities of the

shareholders, direct or indirect, whether natural or

INSURANCE BUSINESS

legal persons who will have qualifying holdings in that

undertaking and the amounts of those holdings;

(e) all qualifying shareholders, directors, controllers and

all persons who will effectively direct or manage the

business of insurance are fit and proper persons to

ensure the sound and prudent management of the

undertaking;

(f)

the undertaking has submitted to the satisfaction of the

competent authority a scheme of operations which

shall include the particulars or proof as may be

determined by Insurance Rules made for the purpose

of this article;

(g) the undertaking holds eligible basic own funds to

cover the absolute floor of the Minimum Capital

Requirement in accordance with article 17;

(h) the undertaking shows evidence that it will be in a

position to hold eligible own funds to cover the

Solvency Capital Requirement, in accordance with

article 15, going forward;

(i)

the undertaking shows evidence that it will be in a

position to hold eligible basic own funds to cover the

Minimum Capital Requirement, in accordance with

article 17, going forward;

(j)

the undertaking shows evidence that it will be in a

position to comply with the system of governance

provided for in article 18I.

(2) Without prejudice to article 5, an undertaking seeking

authorisation to extend its business of insurance to other classes or

t o exten d an au thorisation covering o nly so me o f t he ri sk s

pertaining 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 Minimum

Capital Requirement in accordance with articles 15

and 17 respectively.

(3) The competent authority shall not issue an authorisation

under article 7, where close links exist between an undertaking

applying for authorisation and any other natural or legal persons

(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 governing

any one or more natural or legal persons with whom

the undertaking has close links or difficulties involved

in the enforcement of those measures, prevent it from

effectively exercising its supervisory functions.

(4) For the purpose of ensuring compliance with the provisions

of sub -article (3)(a), the competent authority shal l require

authorised insurance and reinsurance undertakings to provide it

with the information necessary for it to monitor compliance with

the conditions referred to in sub-article (3)(a) on a continuous

basis.

(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 and

general business.

(2)

Without prejudice to the provisions of sub-article (1) -

(a) an insurance undertaking authorised to carry on long

77. term business may be granted an authorisation to carry

on 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 in

classes 1 and 2 of Part I of the Third Schedule may be

granted authorisation to carry on long term business;

or

(c) an insurance undertaking authorised solely to carry on

general business of insurance may be granted

authorisation to carry on long term business restricted

to reinsurance.

(3) Without prejudice to the provisions of sub-article (4), the

provisions of this article shall not apply to an undertaking which

holds an authorisation to carry on both long term business and

general business under this Act as in force immediately before the

coming into force of 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 the

purpose of this article.

(5) An authorised insurance undertaking carrying on long term

business and seeking authorisation to extend its business to the

risks listed in classes 1 or 2 of Part I of the Third Schedule shall

submit proof to the satisfaction of the competent authority that it

(a) possesses the eligible basic own funds to cover the

absolute floor of the Minimum Capital Requirement

for undertakings authorised to carry on long term

business and the absolute floor of the Minimum

Capital Requirement for undertakings authorised to

carry on general business, in accordance with article

17; 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 the Third

Schedule and seeking authorisation to extend its business to long

term business shall submit proof to the competent authority that it

(a) possesses the eligible basic own funds to cover the

absolute floor of the Minimum Capital Requirement

for undertakings authorised to carry on long term

business and the absolute floor of the Minimum

Capital Requirement for undertakings authorised to

carry on general business, in accordance with article

17;

(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 to

carry on both general and long term business in all classes of

business.

(1) The competent authority shall not issue an

authorisation under article 7 to an undertaking whose head office is

in Malta, nor shall the competent authority permit such undertaking

to hold the authorisation issued thereunder, unless it is satisfied 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 hold

itself out as carrying on business of insurance in or from a country

outside Malta or open a branch, agency or office or set up or

acquire any subsidiary in any country outside Malta.

(1) The competent authority shall not issue an

authorisation under article 7 to a third country insurance

undertaking or third country reinsurance undertaking, nor shall the

competent authority permit such undertaking to hold the

authorisation issued thereunder, unless the undertaking -

(a) is permitted in the country where its head office is

situated to carry on the business of insurance which

forms the object of the application;

(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 insurance

which it carries on in Malta, and to maintain there all

the records relating to the business carried on;

(d) undertakes to cover the Solvency Capital Requirement

and the Minimum Capital Requirement in accordance

with 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 business

of insurance shall be carried on under the management of a person

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 the

undertaking 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 the

undertaking;

(c) the person possesses the qualifications and fulfils or

complies with the requirements determined by

Insurance 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 the

business carried out by the branch in Malta, calculated

in 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 eligible

own funds consisting of the items determined in accordance with

Insurance Rules and deposit a specified proportion of such own

funds as may be prescribed under article 18G.

(5)

(a) Branches of third country insurance undertakings shall

not simultaneously pursue long term business and

general business in Malta.

(b) For the avoidance of doubt, a branch of a third country

reinsurance undertaking may be granted an

authorisation to carry on both general and long term

business, in all classes of business, restricted to

reinsurance.

(6) For the purposes of this article, "branch" means a

permanent presence in Malta of a third country insurance

undertaking or third country reinsurance undertaking, which has

received authorisation in Malta to carry on business of insurance in

Malta.

(7) The provisions of this article shall be without prejudice to

any agreements concluded by the European Community with one or

more third countries in terms of Article 171 of the Solvency II

Directive.

(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’s

representative for the purpose of this article;

(b) the representative must be authorised to act generally,

and to accept service of any document, on behalf of the

undertaking;

(c) the representative must not be the approved auditor, or

a partner or an employee of the approved auditor, of

the undertaking;

(d) if the representative is not an individual, it must be a

company whose head office is in Malta and must itself

have an individual representative resident in Malta

who is authorised to act generally, and to accept

service of any document, on behalf of the company, in

its capacity as representative of the company.

(2) Without prejudice to the provisions of sub-article (1), the

general representative shall not be personally liable for the debts

and obligations of the undertaking referred to in article 11.

Deleted by XII. 2006.85.

PART IV

CONDITIONS FOR CARRYING ON BUSINESS

OF INSURANCE

Title I: Financial Requirements

(1) The own funds of an authorised insurance and

reinsurance undertaking shall comprise the sum of basic own funds

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 prior

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 ancillary

own funds, determine what constitutes surplus funds, provide for

the classification of own funds into tiers and the eligibility of the

own funds, and any other matter relating thereto.

(1) An authorised insurance and reinsurance undertaking

shall hold eligible own funds covering the Solvency Capital

Requirement.

(2) The Solvency Capital Requirement shall be calculated

either in accordance with the standard formula as set out in

Insurance Rules or using a full or partial internal model as

approved by the competent authority. The process for the approval

of the use of an internal model shall be set out in Insurance Rules.

(3) Where it is inappropriate for an authorised insurance or

r e i n s u r a n ce u n d e r t a k i n g t o c a l c u l a t e t h e S o l v e n c y C a p i t al

Requirement in accordance with the standard formula, as set out in

the Insurance Rules since the risk profile of the undertaking

concerned deviates significantly from the assumptions underlying

the standard formula calculation, the competent authority may, by

means of a decision stating the reasons, require the undertaking

concerned to use an internal model to calculate the Solvency

Capital Requirement, or the relevant risk modules thereof.

(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 Solvency

Capital 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 for

approval by the competent authority.

(3) The competent authority shall require the undertaking

concerned to take the necessary measures to achieve, within six

months from the observation of non-compliance with the Solvency

Capital Requirement, the re-establishment of the level of eligible

own funds covering the Solvency Capital Requirement or the

reduction of the risk profile of the undertaking to ensure

compliance 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 complied

with by the authorised insurance and reinsurance undertakings in

such circumstances.

(6) In exceptional circumstances, where the competent

authority is of the opinion that the financial situation of the

authorised insurance or reinsurance undertaking concerned will

deteriorate 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, it shall

inform the European regulatory authorities of the host Member

States or the overseas regulatory authorities of any measures it has

taken. The competent authority may request those authorities

concerned to take the same measures, and shall designate the assets

to be covered by such measures.

(1) An authorised insurance and reinsurance undertaking

shall hold eligible basic own funds to cover the Minimum Capital

Requirement.

(2) The Minimum Capital Requirement shall be calculated in

accordance with Insurance Rules made for the purpose of this

article, and shall be not less than the amounts (the absolute floor)

as determined by the said Insurance Rules.

(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 Capital

Requirement 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 concerned

shall submit, for approval by the competent authority, a short-term

realistic finance scheme, in accordance with Insurance Rules issued

under article 18A, to restore, within three months of that

observation, the eligible basic own funds, at least to the level of the

Minimum Capital Requirement or to reduce its risk profile to

ensure 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 concerned, it

shall inform the European regulatory authorities of the host

Member State or the overseas regulatory authorities, of any

measures it has taken. The competent authority may request those

authorities concerned to take the same measures, and shall

designate the assets to be covered by such measures.

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.

An authorised insurance or reinsurance undertaking shall

have procedures in place, including the use of early warning

indicators, to identify deteriorating financial conditions and shall

immediately notify the competent authority when such

deterioration occurs.

(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 solvency

position of the authorised insurance or reinsurance undertaking

continues to deteriorate, the competent authority shall have the

power to take all measures necessary to safeguard the interests of

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 the

deterioration of the solvency position of the undertaking

concerned.

Authorised insurance and reinsurance undertakings shall

value their assets and liabilities in accordance with Insurance Rules

made for the purposes of this Act.

(1) Authorised insurance and reinsurance undertakings

shall establish and maintain technical provisions with respect to all

of their insurance and reinsurance obligations towards

policyholders and insureds of insurance or reinsurance contracts.

(2) The value and calculation of technical provisions shall be

determined in accordance with Insurance Rules made for the

purposes 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 reinsurance

undertaking concerned to demonstrate the appropriateness of the

level of the undertaking’s technical provisions, as well as, the

applicability and relevance of the methods applied, and the

adequacy of the underlying statistical data used.

(4) To the extent that the calculation of technical provisions of

an authorised insurance or reinsurance undertaking does not

comply with the Insurance Rules made for the purposes of this

article, the competent authority may require the insurance or

reinsurance undertaking concerned to increase the amount of

technical provisions so that they correspond to the level determined

by such Insurance Rules.

(5) Where an authorised insurance or reinsurance undertaking

fails to comply with the provisions of this article, the competent

authority may prohibit the free disposal of its assets after having

communicated its intentions to the European regulatory authority

of the host Member State or the overseas regulatory authority. The

competent authority shall designate the assets to be covered by

such measures.

(1) Without prejudice to the information which is to be

submitted to the competent authority pursuant to article 32, an

authorised insurance and reinsurance undertaking shall disclose

publicly, on an annual basis, a report on the undertaking’s solvency

and financial condition. The report shall contain the information

determined by Insurance Rules made for the purposes of this

article.

(2) The competent authority shall, upon a written request by an

authorised insurance or reinsurance undertaking, permit an

undertaking not to disclose information where

(a) by disclosing such information, the competitors of the

undertaking concerned would gain significant undue

advantage;

(b) there are obligations to policyholders or other

counterparty relationships binding the undertaking

concerned to secrecy or confidentiality.

(3) Where non-disclosure of information is permitted by the

competent authority, the authorised insurance or reinsurance

undertaking concerned shall make a statement to this effect in its

report on solvency and financial condition and shall state the

reasons.

(4) The competent authority shall permit an authorised

insurance or reinsurance undertaking to make use of or refer to

public disclosures made under other legal or regulatory

requirements, to the extent that those disclosures are equivalent 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 su b-article (2) ceases to exist, the undertaking

concerned shall inform the competent authority without undue

delay and such undertaking shall comply with the obligations

arising under sub-article (1).

(6) In the event of any major development affecting

si gn ifican tl y th e relev ance o f the i nforma tio n di sclo sed in

accordance with this article, an authorised insurance or reinsurance

undertaking shall disclose appropriate information on the nature

a n d e ff e c t s o f t h a t m a j o r d ev el o p m e n t . T h e ci r c u m s t a n c e s

considered as major developments and the disclosures to be made

by the undertaking in such circumstances shall be determined by

Insurance Rules.

(7) An authorised insurance and reinsurance undertaking may

disclose, on a voluntary basis, any information or explanation

related to their solvency and financial condition which is not

already required to be disclosed in accordance with this article.

(1) The competent authority may, with respect to assets

which an undertaking is required by or under this Act to maintain in

Malta, impose an additional requirement that the whole or a

specified proportion of such assets shall be deposited with and held

in custody for the undertaking’s account by a person as may be

prescribed by regulations made for the purposes of this article

u nless t hat r equi rem ent is oth erw ise i mp osed by any ot her

provision of this Act; and the competent authority shall at all times

have the right to demand from such person any information it may

require to ensure that the provisions of this article are being

complied 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 in

such form and manner to the satisfaction of the competent authority

subject to such regulations as may be prescribed for such purpose

under this Act.

(3) Any provision by or under this Act requiring an

undertaking to maintain in Malta assets of any kind or amount may

be satisfied by the undertaking if the undertaking produces a

security in a form and manner to the satisfaction of the competent

authority subject to such regulations as may be prescribed for such

purpose under this Act.

(4) The assets required to be maintained in Malta by or under

th is Act sh all n ot b e t r ansf er re d, w it hd ra wn o r in an y way

encumbered without the permission of the competent authority

given in writing or until the undertaking has ceased to carry on the

business it was authorised to carry on and proves to the satisfaction

of the authority that it has no further liability. Such assets shall not

be attachable by any court.

Title II: Governance

The Board of Directors of an authorised insurance or

reinsurance undertaking shall be ultimately responsible for the

compliance by the undertaking concerned with the Act, regulations,

Insurance Rules and where applicable, Conduct of Business Rules

issued thereunder, including any other obligations pursuant to the

Solvency II Directive.

(1) Authorised insurance and reinsurance undertakings

shall be required to have in place an effective system of governance

which provides for sound and prudent management of the business

of 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 for

discharging 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 authorised

insurance or reinsurance undertaking.

PART V

ACCOUNTS, ACTUARIAL INVESTIGATIONS AND

FINANCIAL STATEMENTS

(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 notice,

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 competent

authority of its financial year; and where an authorised undertaking

as aforesaid alters its financial year it shall forthwith notify in

writing the competent authority of such change.

(4)

For the purposes of this Act, financial year -

(a) in relation to an authorised undertaking whose head

office is in Malta, means an accounting period as is

construed in accordance with articles 164 to 166 of the

Companies Act;

(b) in relation to a third country insurance or reinsurance

undertaking, means an accounting period as is

construed in accordance with the provisions of the

laws of the country where the head office of the

undertaking is situated governing the accounting

period of such undertakings.

(1) Subject to the following sub-articles, every

undertaking authorised under this Act shall, within the period

stipulated by regulations made or Insurance Rules issued under

article 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 exhibited

throughout 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 Rules

made for the purposes of this article; and

(ii) in the case of a third country insurance or

reinsurance undertaking, in accordance with the

provisions of the laws of the country where the

head office of the undertaking is situated

governing the financial statements of such

undertakings.

(1A) The undertaking shall provide a copy of its audited

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 producing

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 same

manner and to the same extent as it applies to its offices, agencies

and branches in Malta.

(3) The audited financial statements shall be drawn up and

pu bl ish ed in su ch m ann er an d form as m ay b e specified in

Insurance Rules.

(1) Every undertaking authorised under this Act shall

every year appoint an approved auditor as auditor to the

un de rt ak in g wh o se d u ty sh al l be t o rep ort o n th e fi n anc ial

statements of the undertaking examined by him and on financial

statements prepared by the undertaking.

(2) If an authorised undertaking fails to appoint an auditor as

required by sub-article (1), or at any time fails to fill any vacancy

in the office of auditor, the competent authority shall have the

power to appoint an auditor for that undertaking and shall fix the

remuneration 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 of

Insurance Rules made for the purposes of this article, which may 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 deems

necessary in the performance of his duties from any officer or

employee of, or any person under an appointment from, that

undertaking.

(5) An auditor shall immediately give notice in writing to the

competent authority if -

(a) he resigns;

(b) he does not seek to be re-appointed; or

(c) he decides to qualify the audit report,

and, in the case of a resignation, the auditor shall specify the

reasons for so doing.

(6) An authorised undertaking shall give notice in writing to

the competent authority immediately it receives notice of a

resolution intended to be put before the undertaking’s annual

general meeting to appoint as an auditor a person other than the

retiring auditor or otherwise providing expressly that the retiring

auditor shall not be reappointed.

(7) Where, for any reason whatever, the appointment of an

auditor comes to an end, the authorised undertaking shall, not later

than fourteen days from the termination of such appointment, give

notice in writing to the competent authority stating reasons for such

termination.

(8) The competent authority may require an authorised

undertaking to change its appointed auditor where, in the

competent 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 sub-article (8),

the competent authority shall notify in writing its intention to the

undertaking and the auditor concerned stating reasons for requiring

such change and giving the auditor the opportunity to submit in

writing within fourteen days from the date of serving of such notice

reason why its appointment with the undertaking should not be

terminated.

(10) For the purposes of this Act, an approved auditor shall be a

person who is qualified to be an auditor in accordance with the

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 sub-

articles, the competent authority may, in the case of a third country

insurance or reinsurance undertaking authorised as aforesaid,

approve such alternative arrangements as it thinks reasonable and

which do not materially detract from the main objects of this

article, and where such arrangements have been carried out, the

provisions of this article shall not apply to the extent that they are

replaced by such arrangements.

(12) Subject to the provisions of sub-article (10), in so far as the

provisions of this article are inconsistent with the provisions of the

Companies Act, the provisions of this article shall prevail, and the

provisions of the said Act shall, to the extent of the inconsistency,

not apply to authorised undertakings as aforesaid.

(1) Every authorised insurance undertaking carrying on

long term with-profits business in terms of classes I and III as

specified in the Second Schedule shall -

(a) within thirty days of beginning to carry on such

business, appoint an approved actuary as actuary to the

undertaking to perform the with-profits actuary

function 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 new

appointment.

(2) An undertaking making an appointment under sub-article

(1) shall, within fourteen days, inform the competent authority in

writing stating that fact, the date of such appointment and the name

and qualifications of the person appointed; and if an appointment

under that sub-article comes to an end, the undertaking shall,

within fourteen days, inform the authority in writing stating that

fact, the name of the person concerned and the reasons for such

termination.

(3) If, on the expiry of any period specified in sub-article (1),

the undertaking fails to make the required appointment, the

undertaking shall not effect and carry out any new long term

contracts of insurance in terms of the classes specified in sub-

article (1) until the appointment is made.

(4) Notwithstanding the provisions of sub-article (2), the

competent authority may, within fourteen days of receiving a notice

of termination of an appointment of an approved actuary, request in

writing the approved actuary concerned to give in writing the

reasons for such termination; and the actuary shall, within fourteen

days, give reasons in writing.

(5) For the purposes of this Act, an approved actuary is a

person who -

(a) does not hold a role or perform a function on behalf of

the undertaking which could give rise to a significant

conflict of interest;

(b) is a Fellow of an Institute of Actuaries, or a Fellow of

a Faculty of Actuaries, or holds actuarial qualifications

of similar standing of an institute of repute recognised

for such purposes by the competent authority and has

the required skill and holds appropriate practical

experience 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 as

set out in article 23.

(1) Every authorised insurance undertaking carrying on

long term with-profits business in terms of classes I and III as

specified in the Second Schedule shall, at the close of its financial

year, require the approved actuary to provide a report in respect of

the period covered by the report affecting those classes of with-

profits business of the undertaking.

(2) The information to be provided in the report shall be

determined by Insurance Rules issued by the competent authority

for the purposes of this article.

(3) The actuary’s report shall be forwarded by the undertaking

concerned to the competent authority, together with the audited

financial statements of the undertaking required to be forwarded

under article 20.

(4) Notwithstanding anything contained in any of the foregoing

sub-articles, in the case of a third country insurance undertaking

authorised to carry on long term with-profits business in terms of

classes I and III as specified in the Second Schedule, the competent

authority may approve such alternative arrangements as it thinks

reasonable and which do not materially detract from the main

objects of this article, and where such arrangements have been

carried out, the provisions of this article shall not apply to the

extent that they are replaced by such arrangements.

(1) An auditor or an actuary of an authorised insurance or

reinsurance undertaking or of a branch in Malta of a third country

insurance or reinsurance undertaking shall have the duty to report

immediately to the competent authority any fact or decision

concerning that undertaking of which he becomes aware of in his

capacity 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 the

following

(a) a serious qualification, or refusal, of the auditor’s

report on the accounts of the undertaking or the

branch; 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 the

conditions governing authorisation or which

specifically govern the carrying on of business of

insurance 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 or

decisions of which he becomes aware of in the course of carrying

out his duties which relate to or have a serious adverse effect upon

the insured, the policyholder or any other interested person relating

to the undertaking or the branch in Malta of a third country

insurance or reinsurance undertaking of which he becomes aware

of in his capacity as auditor or actuary to an undertaking having

close links with an authorised insurance or reinsurance

undertaking.

(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 and

documentation relating to any fact or decision as specified in sub-

articles (1) or (2) concerning the authorised insurance or

reinsurance undertaking or branch in Malta of a third country

insurance or reinsurance undertaking.

PART VI

POWERS OF INTERVENTION

An authorisation issued or held under this Act shall

automatically be revoked if the authorised insurance or reinsurance

undertaking -

(a) is declared bankrupt or goes into liquidation or makes

a composition with its creditors or is otherwise

dissolved; or

(b) has ceased to operate as a result of a merger with

another undertaking carrying on business of insurance

or for any other reason whatsoever; or

(c) is a third country insurance or reinsurance

undertaking, and the overseas regulatory authority in

the country of registration, incorporation or

constitution withdraws the authorisation from the

undertaking.

Without prejudice to anything contained in any other

provision of this Act, the competent authority may at any time

suspend or revoke an authorisation issued or held under this Act if -

(a) any document or information accompanying an

application for authorisation, or any information given

in connection therewith, is false, incorrect or

misleading in any material particular, or if the

authorised insurance or reinsurance undertaking has

concealed, or conceals from, or fails to notify to the

competent authority any document or information or

change therein which it was its duty to reveal or to

notify under this Act and any regulations, 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 the

authorisation 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 with

the requirements of, or has contravened, any of the

provisions of this Act and any regulations made

thereunder, 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 the

authorisation held by it is subject by virtue of or under

this Act; or

(e) it considers t hat any of the directors, the controllers

and any other person who effectively directs the

business the undertaking is authorised to carry on is no

longer a fit and proper person to ensure its sound and

prudent management; or

(f)

it receives a written request so to do from the

authorised insurance or reinsurance undertaking; or

(g) the authorised insurance or reinsurance undertaking

does not commence to carry on business pursuant to

the authorisation within twelve months of its issue; or

(h) the authorised insurance or reinsurance undertaking no

longer possesses sufficient own funds as determined in

article 14; or

(i)

the authorised insurance or reinsurance undertaking

does not comply with the Minimum Capital

Requirement and the competent authority considers

that the finance scheme submitted is manifestly

inadequate or the undertaking concerned fails to

comply with the approved scheme within three months

from the observation of non-compliance with the

Minimum Capital Requirement;

(j)

the authorised insurance or reinsurance undertaking is

likely to become unable to meet its obligations or can

no longer be relied upon to fulfil or satisfy its

obligations towards insureds, policyholders, creditors

or other interested persons; or

(k) close links exist between the authorised insurance or

reinsurance undertaking and another person, and the

competent authority is prevented from exercising its

supervisory functions effectively either by reason of

those close links or by reason of any law, regulation or

administrative provision of a country outside Malta

governing that other person, or by reason of difficulty

in their enforcement; or

(ka) the authorised insurance undertaking fails to comply with

the conduct of business requirements in relation to the

distribution of an insurance-based investment product or in

relation to the distribution of any insurance product other

than an insurance-based investment product, set out in

Conduct of Business Rules; or

(l)

any of the circumstances under which the competent

authority would have been precluded from issuing an

authorisation under this Act, materialises itself or

where under this Act it would have been entitled to

refuse to issue such authorisation.

(1) Subject to the following provisions of this article,

where the competent authority intends to suspend or revoke an

authorisation pursuant to article 26, it shall give the undertaking

concerned notice in writing setting out the reasons for its intention

to do so.

(2) Every notice given under sub-article (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), make

representations in writing to the competent authority giving reasons

why the authorisation should not be suspended or revoked and the

competent authority shall consider any representations so made

before arriving at a final decision.

(3) The competent authority shall notify in writing its final

decision to the undertaking concerned.

(4) An authorisation issued to a third country insurance or

reinsurance undertaking may only be revoked after consultation

with the overseas regulatory authority of the country of

registration, incorporation or constitution, unless the competent

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 to

prevent 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 its

subsidiaries are carrying on the business of insurance.

(6) The competent authority shall notify EIOPA of any

revocation of authorisation in terms of the Act.

(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 exist,

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 to

rectify 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 the

insured persons;

(d) appoint a person to take charge of the assets of the

undertaking, or any portion of them, for the purposes

of safeguarding the interests of insureds, policyholders

and 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 to

carry 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 and

wound 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 insurance

or reinsurance undertaking, for the winding up of its

business 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 aforesaid,

the competent authority may further proceed in any one or more of

such manners, whether in addition thereto or in substitution

therefor.

(2)

Where a person is appointed by the competent authority -

(a) under sub-article (1)(b), it shall be the duty of the

undertaking to act in accordance with the advice given

by such person unless and until the competent

authority, on representation made to it, directs

otherwise;

(b) under sub-article (1)(d), the undertaking shall deliver

to such person all the assets of which he is placed in

charge, and all the powers, functions and duties of the

undertaking in respect of those assets, whether

exercisable by the undertaking in general meetings, or

by the directors, or by any other person, including the

legal and judicial representation of the undertaking,

shall be exercisable by and vest in the person

appointed under the said paragraph to the exclusion of

any other person;

(c) under sub-article (1)(e), the undertaking shall submit

its business to the control of such person and shall

provide him with such facilities as he may require the

undertaking to provide him to carry on that business or

to carry out the functions assigned to him under the

said paragraph; and all the powers, functions and

duties of the undertaking, whether exercisable by the

undertaking in general meeting, or by the directors, or

by any other person, including for the purposes of the

dissolution and winding up of the undertaking as well as

the legal and judicial representation of the undertaking in

all matters, shall be exercisable by and vest in him to

the 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 to

the exclusion of any other person

Provided that the competent person shall not take any

decision for the purpose of the dissolution and winding

up of the undertaking, unless the competent authority

issues a directive to that effect in terms of article 31A of

the Act, and any such directive may contain such

instructions, requirements and conditions as the

competent authority may consider necessary, including

with regard to the mode of winding up.

(2A) Without prejudice to the powers of the competent authority

in terms of sub-article (1), the competent authority may also submit

an application to the court for the dissolution and winding up by the

court of an undertaking, where it appears to the com petent

authority that an undertaking should be dissolved and wound up by

the court for the reason set out in article 214(2)(b)(iii) of the

Companies Act, and where the court accedes to the application, the

relevant provisions of the Companies Act in relation to the

dissolution and winding up by the court and any other applicable

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 undertaking

shall, if the competent authority so directs and to the extent it so

directs, be deemed to constitute a separate undertaking.

(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 whatever

type, including reprimands or warnings, imposed or decided by the

competent authority under this Act, and any regulations made

thereunder or any Insurance Rules.

(5) The competent authority may require the undertaking

concerned to pay all the expenses of, and incidental to, the

publication or issue of public statements or notices pursuant to this

article or such part thereof as it may deem appropriate; and any sum

so due shall be recoverable by the competent authority in the same

manner as an administrative penalty imposed under this Act.

(6) Any measure adopted in terms of sub-article (1) shall remain

in force notwithstanding that an undertaking ceases to hold an

authorisation licence for whatever reason, unless the competent

authority otherwise directs.

PART VII

SUPERVISION OF AUTHORISED INSURANCE AND

REINSURANCE UNDERTAKINGS

(1) Without prejudice to anything contained in any other

provision of this Act which requires an authorised insurance or

reinsurance undertaking to furnish to the competent authority any

information or documentation, the competent authority may, by

notice in writing,require any such undertaking or any person who 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 documentation

as it may require including existing telephone and

existing data traffic records, with respect to the

business such undertaking is authorised to carry on; or

with respect to any person with whom the undertaking

has close links;

(b) to furnish to it any information or documentation

aforesaid verified in such manner and in such

language, 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 answer

questions and provide information and documentation

with respect to any such business as aforesaid.

(2) The competent authority may take copies of any documents

furnished or provided under this article or extracts from them.

(3) Where an authorised insurance or reinsurance undertaking

required to provide information or documentation under this article

does not have the relevant information or documentation, it shall

disclose to the competent authority where, to the best of its

knowledge, that information or documentation is, and the

competent authority may require any person, including a person to

which the undertaking has outsourced any activities or functions,

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 in

evidence against the person making the statement or providing the

documentation as well as against any person to whom they relate.

(5) The provisions of this article shall not apply to information

or documentation which is privileged in accordance with the

provisions of article 642 of the Criminal Code.

(6) The power to require the production of documentation

under the provisions of this article shall be without prejudice to any

lien or charge claimed by any person in relation to such

documentation.

(7) Where the competent authority has appointed a person

under sub-article (1)(c), such person shall, for the purposes of

carrying out his functions under his appointment, have all the

powers conferred on the competent authority by this article and a

requirement made by him shall be deemed to be and have the same

force and effect as a requirement of the competent authority.

(8) Without prejudice to the other provisions of this article, an

authorised insurance or reinsurance undertaking may be required

by the competent authority to submit to the Central Bank of Malta

such information as the Bank may reasonably require for the

discharge of its duties under the Central Bank of Malta Act.

(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 the

affairs of an authorised insurance or reinsurance undertaking and to

report thereon to it.

(2) An inspector appointed under sub-article (1) -

(a) shall have and may exercise all the powers conferred

on the competent authority by article 29, and any

requirement made by him shall be deemed to be and

have the same force and effect as a requirement of the

competent authority;

(b) may, and if so directed by the competent authority

shall, make interim reports and on the conclusion of

his examination shall make a final report to the said

authority.

(3) The competent authority may forward to the authorised

insurance or reinsurance undertaking concerned a copy of any

report, 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 all

officers and agents of the undertaking to produce to an inspector all

books and documents of or relating to the undertaking and

otherwise 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 books

or documents which it is his duty under this article to produce, or

refuses to answer any question which is put to him by an inspector

with respect to the affairs of the undertaking, an inspector shall

refer the matter to the competent authority and the competent

authority shall thereupon enquire into the case and take appropriate

action as it deems necessary.

(5) An inspector shall also be given access to any accounts,

returns or other information relating to an authorised insurance or

reinsurance undertaking whose affairs are under examination which

are in the possession or under the control of the competent

authority.

(6) Where the information relating to an authorised insurance

or reinsurance undertaking is in any language other than Maltese or

English, the competent authority or any inspector appointed by it,

may require that such information be submitted in either the

English or Maltese language.

(7)

(a) Where an authorised insurance or reinsurance

undertaking outsources a function or activity, the

competent authority shall have effective access to the

business premises of the service provider and must be

able to exercise those rights of access.

(b) Where the service provider is located in a Member

State or EEA State, other than Malta, the competent

authority shall inform the appropriate authority of the

Member State or EEA State of the service provider

prior to conducting an on-site inspection at the

premises of the service provider. In the case of a non-

supervised entity, the appropriate authority shall be the

European regulatory authority concerned. The

competent authority may delegate such on-site

inspections to the European regulatory authority of the

Member State or EEA State where the service provider

is located.

(8) Where the competent authority has informed the European

regulatory authority that it intends to carry out an on-site inspection

in accordance with sub-article (7), or where it carries out an on-site

inspection in accordance with the said sub-article, where the

competent 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 with

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 be

recoverable by the competent authority in the same manner as an

administrative penalty imposed under this Act.

(10) In this article, any reference to officers or to agents shall

include a reference to former as well as present officers or agents

and the expression "agents", in relation to an authorised insurance

or reinsurance undertaking, shall include persons registered or

enrolled 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

intermediaries acting for the undertaking, the bankers, the auditors

and, in the case of an undertaking authorised to carry on long term

business, the actuary of the undertaking and a person as may be

prescribed by regulations 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 and

reinsurance 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.

(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, if

required, evidence of his authority, may enter premises occupied by

a person on whom a notice has been served under article 29 or

whose affairs are being investigated under article 30, for the

purpose of obtaining there the information or documents required

by that notice, or otherwise for the purpose of the examination, and

of exercising any of the powers conferred by the said articles.

(2) Where any officer, employee or agent of the competent

authority has reasonable cause to believe that if such notice as is

referred to in sub-article (1) were served it would not be complied

with or that any documents to which it could relate would be

removed, tampered with or destroyed, such person may, on

producing evidence of his authority, enter any premises referred to

in sub-article (1) for the purpose of obtaining there any information

or documents specified in the notice, being information or documents

that could have been required under such notice as is referred to in

sub-article (1).

(3) For the purposes of any action taken under the provisions of

this article, the competent authority may request the assistance of

the Commissioner of Police, who may for such purpose exercise

such powers as are vested in him for the prevention of offences and

the enforcement of law and order

Provided that, where an entry as is mentioned in this article

involves premises that are occupied for the purpose of habitation,

such entry shall be carried out in the presence of an officer of the

Police of a rank not below that of inspector and shall moreover not

take place between nine in the evening and five in the morning.

(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 may deem

appropriate in the circumstances, and any person to whom or to

which the notice is given shall obey, comply with and otherwise

give effect to any such directive within the time and in the manner

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, ceases 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, or

any other requirement, including any requirement

emanating from European Union legislation, and

confer 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 authorisation

be prohibited, temporarily or otherwise, suspended

from carrying out activities licensable under the Act,

or removed, or removed and replaced, by another

person acceptable to the competent authority.

(3) The power to give directives under this article shall include

the power to vary, alter, add to or withdraw any directive, as well as

the power to issue new or further directives.

(4) Where the competent authority is satisfied that the

circumstances so warrant, it may at any time make public any

directive it has given under any of the provisions of this article.

(1) The competent authority shall review and evaluate the

strategies, processes and reporting procedures which are

established by authorised undertakings to comply with this Act,

regulations made and Insurance Rules issued thereunder. This

review and evaluation shall comprise the assessment of the

qualitative requirements relating to the system of governance, the

assessment of the risks which the undertakings concerned face or

may face and the assessment of the ability of those undertakings to

assess those risks taking into account the environment in which the

undertakings are operating.

(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 and

partial internal models set out in Insurance Rules

issued pursuant to article 15.

(3) The competent authority shall assess the adequacy of the

methods and practices of the authorised insurance or reinsurance

undertakings designed to identify possible events or future changes

in economic conditions that could have adverse effects on the

overall financial standing of the undertaking concerned.

(4) The competent authority shall assess the ability of the

authorised undertakings to withstand those possible events or

future 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 concerned to

remedy such weakness or deficiency within such period and in such

manner as it may deem necessary or appropriate in the

circumstances.

(6) The reviews, evaluations and assessments referred to sub-

articles (1) to (4), shall be conducted regularly and the competent

authority shall establish the minimum frequency and the scope of

those reviews, evaluations and assessments having regard to the

nature, 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 overall

financial standing of authorised insurance or reinsurance

undertakings, in addition to the calculation of the Solvency Capital

Requirement, the competent authority may require undertakings to

carry out such tests as may be determined to assess the ability of

the undertakings concerned to withstand such events or future

changes in economic conditions that could have unfavourable

effects on their overall financial stability.

(1) Following the supervisory review process carried out

in terms of article 31B, the competent authority may, in exceptional

circumstances, set a capital add-on for an authorised insurance or

reinsurance undertaking stating the reasons for its decision. Such

power shall be exercised in the following cases

(a) where it concludes that the risk profile of the

authorised insurance or reinsurance undertaking

deviates significantly from the assumptions underlying

the Solvency Capital Requirement, as calculated using

the standard formula in accordance with article 15; and

(i)

the requirement to use an internal model under

article 15(3) is inappropriate or has been

ineffective; 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 undertaking

deviates significantly from the assumptions underlying

the Solvency Capital Requirement, as calculated using

an internal model or partial internal model because

certain quantifiable risks are captured insufficiently

and the adaptation of the model to better reflect the

given risk profile has failed within an appropriate

timeframe;

(c) where it concludes that the system of governance of an

authorised insurance or reinsurance undertaking

deviates significantly from the standards laid down in

article 18I and Insurance Rules issued thereunder, that

those deviations prevent the undertaking from being

able to properly identify, measure, monitor, manage

and report the risks that it is or could be exposed to

and the application of other measures is in itself

unlikely to improve the deficiencies sufficiently within

an appropriate timeframe;

(d) the authorised insurance or reinsurance undertaking

applies the matching adjustment or the volatility

adjustment referred to in Articles 77b and 77d of the

Solvency II Directive, respectively, or the transitional

measures referred to in Articles 308c and 308d of the

said Directive and the competent authority concludes

that the risk profile of that undertaking deviates

significantly from the assumptions underlying those

adjustments 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 ensure

that the undertaking complies with Article 101(3) of

the Solvency II Directive;

(b) in paragraph (c) of sub-article (1), the capital add-on

shall be proportionate to the material risk arising from

the deficiencies which gave rise to the decision of the

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 from

the 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 shall

remedy the deficiencies that led to the imposition of the capital

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 capital

add-on when the undertaking has remedied the deficiencies which

led to its imposition.

(5) The Solvency Capital Requirement including the capital

add-on imposed shall replace the inadequate Solvency Capital

Requirement

Provided that, the Solvency Capital Requirement shall not

include the capital add-on imposed in accordance with sub-article

(1)(c), for the purposes of the calculation of the risk margin

referred to in Article 77(5) of the Solvency II Directive.

An authorised insurance and reinsurance undertaking shall

submit to the competent authority the information which is

necessary for the purposes of supervision, taking into account the

o b j e c t i v e s o f su p e r v i si o n , as may be specified by means of

regulations, Insurance Rules or Conduct of Business Rules which

shall also specify the period within which this information is to be

submitted.

PART VIIA

GROUP SUPERVISION

The competent authority shall provide for supervision, at

the level of the group, of insurance and reinsurance undertakings

which are part of a group in accordance with regulations or

Insurance Rules issued for the purposes of this Part.

(1) The group supervisor of insurance and reinsurance

undertakings which are part of a group, shall be responsible for 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 II

Directive.

(3) Where the competent authority is the group supervisor, it

shall, with regard to group supervision, carry out the following

functions

(a) coordination of the gathering and dissemination of

relevant or essential information for going concern and

emergency situations, including the dissemination of

information which is of importance for the carrying

out of the supervisory tasks of authorities responsible

for the supervision of an individual insurance or

reinsurance 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-group

transactions as set out in Articles 218 to 245 of the

Solvency 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 the

participating undertaking fulfils the requirements of

fitness and properness set out in Articles 42 and 257 of

the Solvency II Directive;

(e) planning and coordination, through regular meetings

held at least annually or through other appropriate

means, of supervisory activities in going-concern as

well as in emergency situations, in cooperation with

the authorities responsible for the supervision of an

individual insurance or reinsurance undertaking in a

group, and taking into account the nature, scale and

complexity of the risks inherent in the business of all

undertakings that are part of the group;

(f)

other tasks, measures and decisions assigned to the

competent authority, as group supervisor, by the

Solvency II Directive or deriving from the application

of that Directive, in particular leading the process for

validation of any internal model at group level as set

out in Articles 231 and 233 of Solvency II Directive

and leading the process for permitting the application

of the regime established in Articles 237 to 240 of the

said Directive.

(4) In order to facilitate the exercise of group supervision

tasks, set out in sub-article (3), a college of supervisors shall be

established. It shall be chaired by the competent authority where it

i s t h e g r o u p s u p e r v i s o r. T h e m e m b e r s h i p , f u n c t i o n i n g a n d

consultation processes of the college of supervisors shall be

determined by regulations or Insurance Rules.

(1) Where the competent authority is the group

supervisor, it shall cooperate closely with the other authorities

responsible for the supervision of individual insurance or

reinsurance undertakings in a group, in particular, in cases where

an insurance or reinsurance undertaking within the group

encounters financial difficulties.

(2) Where the competent authority is one of the authorities

responsible for the supervision of an individual insurance or

reinsurance undertaking in a group, it shall cooperate closely with

other responsible authorities in the group and the group supervisor,

i n p a r t i c u l a r, i n c a s e s w h e r e a n i n s u r a n c e o r r e i n s u r a n c e

undertaking encounters financial difficulties.

(3) Where the competent authority is the group supervisor or is

one of the authorities responsible for the supervision of an

individual insurance or reinsurance undertaking in a group, it

shall -

(a) provide other authorities responsible for the

supervision of an individual insurance or reinsurance

undertaking in a group with such information so as to

allow and facilitate the exercise of the supervisory

tasks concerned under the Solvency II Directive;

(b) communicate all relevant information to such

authorities without delay, as soon as it becomes

available or exchange information on request; and

(c) call immediately for a meeting of all the authorities

involved in the supervision of the group, at least

where -

(i)

it becomes aware of a significant breach of the

Solvency Capital Requirement or a breach of the

Minimum Capital Requirement of an individual

insurance or reinsurance undertaking;

(ii) it becomes aware of a significant breach of the

Solvency Capital Requirement at group level

calculated on the basis of consolidated data or

the aggregated group Solvency Capital

Requirement, in accordance with whichever

calculation method is used, in Title III, Chapter

II, Section I, Subsection 4 of the Solvency II

Directive; 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 group

has not communicated relevant information, or a request for

cooperation, in particular to exchange relevant information, has

been rejected or has not been acted upon within two weeks, the

competent 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 II

Directive, or where the members of the college of supervisors do

not cooperate to the extent required by that sub-article, the

competent authority may refer the matter to EIOPA and request its

assistance in accordance with Article 19 of Regulation (EU) No

1094/2010.

(6) Where the competent authority is the group supervisor, it

shall provide the authorities responsible for the supervision of an

individual insurance or reinsurance undertaking in a group and

EIOPA 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 the

governance and organisational structure of the group.

(7) Without prejudice to Article 248 of the Solvency II

Directive, the competent authority shall, where a decision is of

importance for the supervisory tasks of the other authorities

responsible for the supervision of an individual insurance or

reinsurance undertaking in a group, prior to taking any decision,

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 insurance

and reinsurance undertaking which is part of a group

and which requires the approval or authorisation of the

competent authority;

(b) the decision on the extension of the recovery period in

accordance with Article 138(3) and (4) of the Solvency

II Directive;

(c) major sanctions or exceptional measures taken by the

competent authority, including the imposition of a

capital add-on to the Solvency Capital Requirement

under article 31C and the imposition of any limitation

on the use of an internal model for the calculation of

the Solvency Capital Requirement as determined in

Insurance Rules made for the purposes of Title I,

Chapter VI, Section 4, Subsection 3 of the Solvency II

Directive.

(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 responsible

for the supervision of an individual insurance or reinsurance

undertaking in a group, it shall consult such authorities concerned

before taking that decision.

(10) Without prejudice to Article 248 of the Solvency II

Directive, the competent authority may decide not to consult other

authorities in cases of urgency or where such consultation may

jeopardise the effectiveness of its decision. In such a case, the

c o m p e t e n t a u t h o r i t y s h a l l w i t h o u t d e l a y, i n f o r m t h e o t h e r

authorities responsible for the supervision of an individual

insurance 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 an

individual insurance or reinsurance undertaking in a group, the

competent authority shall, whenever possible, contact that authority

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 authority

shall, upon request by the group supervisor, require the parent

undertaking to provide any relevant information for the exercise of

group supervision as set out in Article 248 of the Solvency II

D irect iv e, an d th e c om pet en t aut ho ri ty sh all t ransm it su ch

information to the group supervisor.

(13) Where the competent authority is the group supervisor, it

may ask the European regulatory authority of a parent undertaking

which has its head office in another Member State, to request such

undertaking to submit any information which would be relevant for

the exercise of its co-ordination rights and duties as set out in

Article 248 of the Solvency II Directive, and to transmit it directly

to the competent authority.

(14) Information received for the purposes of this article shall be

treated as confidential and protected by the duty of professional

secrecy.

(1) Without prejudice to article 30, the competent

authority may carry out in Malta, itself or through a person

appointed for that purpose, on-site verification of information as

referred to in Article 254 of the Solvency II Directive on the

premises 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 regulated

or not, which forms part of a group and is situated in another

Member State, the competent authority shall

(a) request the European regulatory authority to enable the

competent authority to carry out the on-site

verification 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 carrying

out of such verification.

(3) Where the competent authority receives, in specific cases, a

request by a European regulatory authority to verify the

information concerning an undertaking situated in Malta, whether

regulated or not, which is part of a group, the competent authority

shall act upon that request either by carrying out the on-site

verification itself, by allowing an auditor or expert to carry it out,

or by allowing the European regulatory authority which made the

request to carry it out itself, and such authority may, where it does

not carry out such verification itself, participate in the on-site

verification.

(4) Where the competent authority has received a request

pursuant to sub-article (3), it shall inform the group supervisor 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 authority

may refer the matter to EIOPA and may request its assistance in

accordance 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 be

entitled to participate in on-site examinations where they are

carried out jointly by the competent authority and any one or more

European regulatory authorities.

Deleted by XXVI.2018.73.

Deleted by XXVI.2018.73.

PART VIII

TRANSFER OF BUSINESS OF INSURANCE

(1) Where it is proposed to carry out a scheme under

which an authorised insurance undertaking ("the transferor"), is to

transfer to another undertaking, whether authorised thereunder or

not ("the transferee") all its rights and obligations under such

general business policies, or general business policies of such

descriptions, 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 the

obligations proposed to be transferred constitutes the

carrying on of business of insurance in or from Malta

or in or from a country outside Malta; or

(b) where the transferor is a 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 approval

of the scheme.

(2) The competent authority shall not determine an application

made under sub-article (1) unless it is satisfied that -

(a) a notice approved by it for the purpose has been

published -

(i)

in at least two local daily newspapers of which

one is published in the Maltese language and the

other in the English language; and the text of the

notice shall be in Maltese in the Maltese daily

and in English in the English daily;

(ii) where the transferor is 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 which

evidences a contract of insurance, the risk is a

risk situated outside Malta, in two daily

newspapers in the country where the risk is

situated;

(b) except in so far as the competent authority has

otherwise directed, a copy of the notice has been sent

by the transferor to every policyholder affected by the

scheme and every other person who claims an interest

in a policy included in the proposed transfer and has

given notice of his claim to the transferor;

(c) copies of a statement setting out particulars of the

transfer and approved for the purpose by the

competent authority have been

available for

inspection -

(i)

at each of the branches, agencies and offices of

the transferor in Malta;

(ii) except in so far as the competent authority has

otherwise directed, 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 which evidences a contract of insurance,

the risk is a risk situated outside Malta, at one or

more places in the country where the risk is

situated,

for a period of not less than thirty days beginning with

a date to be determined by the competent authority.

(3) The notice referred to in sub-article (2) shall include a

statement that written representations concerning the transfer may

be sent to the competent authority within a period to be specified

by the competent authority; and the competent authority shall not

determine the application until after considering any

representations made to it before the specified day.

(4) The competent authority shall not approve a transfer on an

application made under sub-article (1) unless it is satisfied that -

(a)

(i)

the transferee is, or immediately after the

approval will be, authorised under article 7 to

carry on general business of the class or classes

or part classes to be transferred under the

scheme;

(ii) the transferee is, or immediately after the

approval will be, authorised under Article 14 or

Article 162 of the Solvency II Directive to carry

INSURANCE BUSINESS

on general business of the class or classes or part

classes to be transferred under the scheme in a

Member State or EEA State; or

(iii)

if the transferee does not fall within sub-

paragraphs (i) and (ii) of this paragraph, the

transferee has the authorisation required to

enable the business, or part which is to be

transferred, to be carried on in the place to

which it is to be transferred, or will have it

before the scheme takes effect; and

(b)

(i)

the transferee referred to in sub-paragraph (i) of

paragraph (a) of this sub-article possesses, after

taking the proposed transfer into account, the

necessary eligible own funds to cover the

Solvency Capital Requirement required to be

maintained 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, the

necessary eligible own funds to cover the

Solvency 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, the

transferee possesses, or will possess before the

scheme takes effect, the solvency requirements

required of it by, or under, the law applicable in

the place to which the business is being

transferred; and

(c)

(i)

if the transferee is an undertaking authorised

under this Act, the transferee’s financial

resources are, consequential to the transfer,

adequate to fulfil the other obligations required

of it by, or under, this Act; or

(ii)

if the transferee is a European insurance

undertaking, the transferee’s financial resources

are consequential to the transfer, adequate to

fulfil the other obligations required of it by, or

under, the law applicable in the place to which

the business is being transferred; or

(iii)

if the transferee is a third country insurance

undertaking, the transferee’s financial resources

are, consequential to the transfer, adequate to

fulfil the other obligations required of it by, or

under, the law applicable in the place to which

the business is being transferred; and

(d) if the transferor is an undertaking whose head office is

in Malta, and the establishment from which the

policies are to be transferred is situated in a Member

State or EEA State -

(i)

the European regulatory authority in that

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 months

beginning with the consultation has elapsed;

(e) if 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 which evidences a contract of

insurance, 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 the

proposed transfer; and

(ii) the overseas regulatory authority where the risk

is situated has been notified of the proposed

transfer; and

(iii) either the European regulatory authority or the

overseas regulatory authority has consented to

the transfer or the European regulatory authority

or the overseas regulatory authority has not

refused its consent to the transfer within the

period of three months beginning with the date

of the notification.

(5) On determining an application made under sub-article (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 representations

in accordance with the notice referred to in sub-article

(2),

and if it refuses the application it shall inform the transferor and the

transferee in writing of the reasons for its refusal.

(1) Subject to sub-article (2), a scheme giving effect to a

transfer approved by the competent authority under article 33 shall

be effectual in law -

(a) to transfer to the transferee all the transferor’s rights

and obligations under the policies included in the

transfer scheme; and

(b) if the scheme so provides, to secure the continuation

by or against the transferee of any legal proceedings

by or against the transferor which relate to those rights

or obligations,

notwithstanding the absence of any agreements or consents which

would otherwise be necessary for it to be effectual in law for those

purposes.

(2) A transfer approved by the competent authority shall

automatically be valid against policyholders, the insured persons

and any other person having rights or obligations arising out of the

contracts transferred.

(3) Except in so far as the competent authority may otherwise

direct, a policyholder whose policy is included in such a scheme

shall be given written notice of its carrying out by the transferee.

(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 transferor"),

is to be transferred to another undertaking whether authorised

thereunder or not ("the transferee"), and -

(a) where the transferor is an undertaking whose head

office is in Malta, the business proposed to be

transferred is business carried on in or from Malta or

in or from a country outside Malta;

(b) where the transferor is a third country insurance

undertaking, the business proposed to be transferred is

business carried on in or from Malta,

the transferor or the transferee shall, by application filed before the

Financial Services Tribunal, request approval of the scheme.

Approval by the Tribunal shall be in accordance with the provisions

of this article.

(2) The Tribunal shall not determine an application filed before

it under sub-article (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 sub-

article (3) have been complied with.

(3)

The requirements referred to in sub-article (2)(b) are -

(a) a notice stating that the application has been made and

giving the addresses of the branches, agencies and

offices at which, and the period for which, copies of

the documents mentioned in paragraph (d) will be

available as required by that paragraph has been

published -

(i)

in at least two local daily newspapers of which

one is published in the Maltese language and the

other in the English language; and the text of the

notice shall be in Maltese in the Maltese daily

and in English in the English daily;

(ii) where the transferor 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 which

evidences a contract of insurance, a country

outside Malta is the country of the commitment,

in two daily newspapers in that country;

(b) except in so far as the Tribunal has otherwise directed,

a statement -

INSURANCE BUSINESS

(i) setting out the terms of the scheme, and

(ii) containing a summary of the report mentioned in

sub-article (2)(a) sufficient to indicate the

opinion of the actuary on the likely effects of the

scheme on the long term business policyholders

of the undertakings concerned,

has been sent to each of those policyholders and every

other person who claims an interest in a policy

included in the proposed transfer and has given written

notice of his claim to the transferor;

(c) a copy of the application, of the report mentioned in

sub-article (2)(a) and of any statement sent out under

paragraph (b) of this sub-article has been served on the

competent authority and that a period of not less than

thirty days has elapsed since the date of service;

(d) copies of the application and of the report mentioned

in sub-article (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 in

or 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, a

country outside Malta is the country of the

commitment, at such place in that country as the

Tribunal has directed; for a period of not less than

thirty days beginning with a date to be determined by

the Tribunal; and that copies of the report have been

made available for purchase from those offices and

places during that period upon payment of such fee as

may be fixed by the Tribunal; and

(e) the notice and the statement referred to in this sub-

article shall state that written representations

concerning the transfer may be sent to the Tribunal

within 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 the

carrying out of the scheme and every other person who

claims an interest in a policy included in the proposed

transfer and has given notice of such interest to the

transferor, shall be entitled to make written

representations..

(5) Subject to sub-article (6), the Tribunal shall not approve a

transfer on an application filed before it under sub-article (1) unless

it is satisfied that -

(a)

(i)

the transferee is, or immediately after the

approval will be, authorised under article 7 to

carry on long term business of the class or

classes 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 to

be transferred under the scheme in a Member

State or an EEA State; or

(iii)

if the transferee does not fall within sub-

paragraphs (i) and (ii), the transferee has the

authorisation required to enable the business, or

part which is to be transferred, to be carried on

in the place to which it is to be transferred or

will have it before the scheme takes effect; and

(b)

(i)

the transferee referred to in sub-paragraph (i) of

paragraph (a) of this sub-article, produces

evidence that after taking the transfer into

account, it possesses the necessary eligible own

funds to cover the Solvency Capital

Requirement required to be maintained under

this Act;

(ii)

the transferee referred to in sub-paragraph (ii) of

paragraph (a) of this sub-article, produces

evidence that after taking the transfer into

account, it possesses the necessary eligible own

funds to cover the Solvency 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), the transferee possesses,

or will possess before the scheme takes effect,

the solvency requirements required of it by, or

under, the law applicable in the place to which

the business is being transferred;

(iv)

(aa) if the transferee is authorised under this

Act,

its

financial

resources

are,

consequential to the transfer, adequate to

fulfil the other obligations required of it

by, or under, this Act; or

(bb) if the transferee is a third country

insurance undertaking, the transferee’s

financial resources are, consequential to

the transfer, adequate to fulfil the other

obligations required of it by, or under, the

law applicable in the place to which the

business is being transferred;

(c) if the transferor is an undertaking whose head office is

in Malta, and the establishment from which the

policies are to be transferred is situated in a Member

State or EEA State -

(i)

the European regulatory authority in that

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 months

beginning 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 which

evidences a contract of insurance, a country outside Malta is the

country of the commitment, the Tribunal shall not approve the

transfer 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 the

scheme or that any such authority has not refused its

consent to the scheme within the period of three

months beginning with the date of the notification.

(7) Where a scheme is approved by the Tribunal under this

article the transferee shall, within ten days from the date on which

the approval is made or such longer period as the Tribunal may

allow, deposit two office copies of the approval with the competent

authority.

Where the Tribunal approves a scheme under article 35, the

long term business referred to in the application may be transferred

to the transferee without any further need of any document

evidencing the consent of the policyholder and of every other

person who claims an interest in a policy included in the proposed

transfer and notwithstanding any opposition by the policyholder

and every other person who claims an interest in a policy included

in the proposed transfer. The Tribunal may make provision for such

incidental, consequential and supplementary matters as are

necessary to secure that the scheme shall be fully and effectively

carried out; and, where such be the case, for the continuation by or

against the transferee of any legal proceedings pending by or

against the transferor which relate to the scheme.

Where an undertaking authorised under this Act carrying

on business restricted to reinsurance ("the transferor") proposes to

transfer all or part of its business, the competent authority shall not

approve a transfer unless it is satisfied that

(a)

(i)

the transferee is, or immediately after the

approval will be, authorised under article 7 to

carry on business of reinsurance;

(ii)

the transferee is, or immediately after the

approval will be, authorised under Article 14 or

162 of the Solvency II Directive, to carry on in a

Member State or an EEA State, business of

reinsurance to be transferred under the scheme;

or

(iii)

if the transferee does not fall within

subparagraphs (i) and (ii), the transferee has the

authorisation required (if any) to enable the

business, or part which is to be transferred, to be

carried on in the place to which it is to be

transferred or will have it before the scheme

takes effect; and

(b)

(i)

the transferee referred to in sub-paragraph (i) of

paragraph (a) possesses, after taking the

proposed transfer into account, the necessary

eligible own funds to cover the Solvency Capital

Requirement required to be maintained under

this Act;

(ii)

the transferee referred to in sub-paragraph (ii) of

paragraph (a) possesses, after taking the

proposed transfer into account, the necessary

eligible own funds to cover the Solvency Capital

Requirement referred to in Article 100 or 166 of

the Solvency II Directive; or

(iii)

if the transferee does not fall within

subparagraphs (i) and (ii), the transferee satisfies

the solvency requirements required of it by, or

under, the law applicable in the place to which

the business is being transferred;

(c)

(i)

if the transferee is an undertaking authorised

under this Act, the transferee’s financial

resources are, consequential to the transfer,

adequate to fulfil the other obligations required

of it by or under this Act;

(ii)

if the transferee is a third country reinsurance

undertaking, the transferee’s financial resources

are, consequential to the transfer, adequate to

fulfil (if any) the other obligations required of it

by, or under, the law applicable in the place to

which the business is being transferred.

(1) Where it is proposed to carry out a transfer of

business of insurance under which the whole or part of the general

business or long term business of an insurance or reinsurance

undertaking is to be transferred to an undertaking authorised under

this Act ("the transferee") by an undertaking whose head office is

in a country outside Malta, the transferee shall notify the competent

authority of the particulars of the proposed transfer and no such

transfer shall take place unless and until the competent authority

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 refrain 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 policyholders or the

c o n t r a c t u a l o b l i ga t i o n s o f t h e r e i n s u r a nc e u n d e r t a k i n g a r e

prejudiced.

PART IX

ACQUISITION AND DISPOSAL OF SHARES, WITHDRAWAL,

DISSOLUTION AND WINDING UP

(1) Notwithstanding anything contained in any other law,

any person or persons acting in concert (hereinafter referred to in

this Act as the "proposed acquirer"), who have taken a decision

either to -

(a) acquire, directly or indirectly, a qualifying share-

holding in an authorised insurance or reinsurance

undertaking;

(b) increase, directly or indirectly, an existing

shareholding which is not a qualifying shareholding so

as to cause it to become a qualifying shareholding in

77. an authorised insurance or reinsurance undertaking; or

(c) further increase, directly or indirectly, such qualifying

shareholding in an authorised insurance or reinsurance

undertaking as a result of which the proportion of the

voting rights or of the capital held would reach or

exceed twenty per centum, thirty per centum or fifty

per centum or so that the authorised insurance or

reinsurance undertaking would become its subsidiary,

(hereinafter referred to as the "proposed acquisition"), shall notify

the competent authority in writing of any such decision, indicating

the size of the intended shareholding and providing any relevant

information as and in the manner that the competent authority may

by Insurance Rules require, including the form in which such

notification shall be made and the criteria adopted by the competent

authority in determining whether such person is a fit and proper

person.

(2) Notwithstanding anything contained in any other law, any

person who has taken a decision either to -

(a) dispose, directly or indirectly, of a qualifying

shareholding in an authorised insurance or reinsurance

undertaking;

(b) reduce, directly or indirectly, a qualifying

shareholding so as to cause it to cease to be a

qualifying shareholding; or

(c) reduce, directly or indirectly, a qualifying

shareholding so that the proportion of the voting rights

or of the capital held would fall below twenty per

centum, thirty per centum or fifty per centum or so that

the authorised insurance or reinsurance undertaking

would cease to be its subsidiary,

shall notify the competent authority in writing of any such decision

indicating the size of the intended shareholding and providing any

relevant information as and in the manner that the competent

authority may by Insurance Rules require.

(3) Sub-articles (1) and (2) shall apply irrespective of whether

or not any of the relevant shares are shares listed on any regulated

market.

(4) Notwithstanding the provisions of sub-articles (1) and (2),

it shall be the duty of an authorised insurance or reinsurance

undertaking and of the directors thereof, to notify the competent

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 sub-article

(1) or (2) without notifying the competent authority or obtaining its

approval in terms of article 38A, then, without prejudice to any

other penalty which may be imposed under this Act, the competent

authority shall have the power to make an order

(a) restraining such person or authorised insurance or

reinsurance 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 insurance or

reinsurance undertaking to take such steps as may be

necessary to restore the position existing immediately

before the action was taken;

(d) restraining such person or authorised insurance or

reinsurance undertaking from exercising any rights

which such action would, if lawful, have conferred

upon them, including the right to receive any payment

or to exercise any voting rights attaching to the shares

acquired;

(e) restraining such person or authorised insurance or

reinsurance undertaking from taking any similar action

or any other action within the categories set out in sub-

articles (1) and (2).

(6) Without prejudice to any other provision of this Act, where

the influence exercised by any person acquiring or proposing to

acquire a qualifying shareholding is, or is likely to, operate against

the sound and prudent management of an authorised insurance or

reinsurance undertaking, the competent authority may exercise any

of its powers under this Act to put an end to such situation,

including the power to issue directives as it may deem reasonable

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 Malta

the business of insurance, the provisions of this article shall apply

to the extent only of requiring such undertaking to give to the

competent authority, not later than thirty days from such change or

occurrence, as the case may be, the information therein referred 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".

(1) The competent authority shall, promptly and in any

event within two working days following receipt of the notification

required under article 38(1), as well as following the possible

subsequent receipt of the information referred to in sub-article (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 of

receipt of the notification required under article 38(1) and all

documents required by the competent authority to be attached to

such notification (hereinafter referred to in this Act as the

"assessment period") to carry out an assessment on the basis of

such information as may be determined by Insurance Rules issued

for this purpose.

(3) The competent authority shall inform the proposed acquirer

of the date of the expiry of the assessment period at the time of

acknowledging receipt.

(4) The competent authority may, during the assessment period,

if necessary and no later than on the fiftieth working day of such

period, request any further information that is necessary to

complete the assessment. Such a request shall be made in writing

and shall specify the additional information needed.

(5) During the period between the date of request for additional

information by the competent authority and the receipt of a

response thereto by the proposed acquirer, the assessment period

shall be interrupted. The interruption period shall not exceed

twenty working days. Any further requests by the competent

authority for completion or clarification of the information shall be

at its discretion but shall not result in an interruption of such

assessment period.

(6) The competent authority may extend the interruption period

referred to in sub-article (5) up to thirty working days if the

proposed acquirer is

(a) situated or regulated in a non-Member State or non-

EEA state; or

(b) a person not subject to supervision under

(i) Directive 2014/65/EU of the European Parliament

and of the Council of 15 May 2014 on markets in

financial instruments and amending Directive

2002/92/EC and Directive 2011/61/EU (recast);

(ii) Directive 2013/36/EU of the European

Parliament and of the Council of 26 June 2013

on access to the activity of credit institutions and

the prudential supervision of credit institutions

and investment firms, amending Directive 2002/

87/EC and repealing Directives 2006/48/EC and

2006/49/EC;

(iii) Directive 2009/65/EC of the European

Parliament and of the Council of 13 July 2009

on the co-ordination of laws, regulations and

administrative

provisions

relating

to

undertakings for collective investment in

transferable securities (UCITS)(recast);

(iv) the Solvency II Directive.

(7) The competent authority shall, upon completion of the

assessment referred to in sub-article (2) and not later than the date

of the expiry of the assessment period, issue a notice

(a) granting unconditional approval to the proposed

acquisition;

(b) granting approval to the proposed acquisition subject

to such conditions as the competent authority may

deem appropriate; or

(c) refusing the proposed acquisition.

(8) In making the assessment referred to in sub-article (2), the

competent authority shall neither impose any prior conditions in

respect of the level of shareholding that must be acquired nor

examine the proposed acquisition in terms of the economic needs of

the market.

(9) The competent authority may refuse the proposed

acquisition only if there are reasonable grounds for doing so on the

basis of the criteria set out in the Insurance Rules referred to in

article 38(1) or if the information provided by the proposed

acquirer is incomplete.

(10) If the competent authority decides to refuse the proposed

acquisition, it shall, within two working days, and not exceeding

the assessment period, inform the proposed acquirer in writing

specifying the reasons for such decision. The competent authority

may, whether at the request of such proposed acquirer or not, issue

a public statement indicating such reasons.

(11) If the competent authority does not refuse the proposed

acquisition in writing within the assessment period, such proposed

acquisition shall be deemed to be approved.

(12) Without prejudice to any other measure which may be taken

under this Act, where a qualifying shareholding in an authorised

insurance or reinsurance undertaking is acquired notwithstanding

t h e r e f u s a l o f t h e c o m p et en t a u t h o r i t y, t h e e x e r c i s e o f t h e

corresponding voting rights shall be suspended and any of the votes

cast in contravention of this article shall be null and void.

(13) The competent authority may fix a maximum period for

concluding the proposed acquisition and extend it where

appropriate.

(14) Notwithstanding the provisions of sub-articles (1) to (6),

where two or more proposals to acquire or increase qualifying

shareholdings in the same authorised insurance or reinsurance

undertaking have been notified to the competent authority, the

latter shall treat the proposed acquirers in a non-discriminatory

manner.

(1) The competent authority shall work in full

consultation with European regulatory authorities when carrying

out the assessment referred to in article 38A if the proposed

acquirer is one of the following

(a) a credit institution, insurance undertaking, reinsurance

undertaking, investment firm or UCITS management

company authorised in another Member State or EEA

State or in a sector other than that in which the

acquisition is proposed;

(b) the parent undertaking of a credit institution, insurance

undertaking, reinsurance undertaking, investment firm

or UCITS management company authorised in another

Member State or EEA State or in a sector other than

that in which the acquisition is proposed; or

(c) a person controlling a credit institution, insurance

undertaking, reinsurance undertaking, investment firm

or UCITS management company authorised in another

Member State or EEA State or in a sector other than

that in which the acquisition is proposed.

(2) The competent authority shall, without undue delay,

provide any information which is essential or relevant for the

assessment referred to in article 38A to the European regulatory

authority requesting such information. Upon request, the competent

authority shall communicate to the European regulatory authority

all relevant information and shall communicate on its own initiative

all essential information. A decision by the competent authority in

terms of article 38A shall indicate any views or reservations

expressed by the European regulatory authority responsible for the

proposed acquirer.

(3) The procedure set out in sub-articles (1) and (2) shall apply

mutatis mutandis where the proposed acquirer is authorised or

established in a third country.

(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 an

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 competent

authority forthwith in writing upon becoming aware that such

undertaking intends to take any of the actions set out in sub-article

(1).

(3) Within three months of receipt of such notification or

receipt of such information as the competent authority may

lawfully require, whichever is the later, the competent authority

shall issue a notice -

(a) granting unconditional consent to the taking of the

action;

(b) granting consent to the taking of the action subject to

such conditions as the competent authority may deem

appropriate; or

(c) refusing consent to the taking of the action,

and if it refuses to grant consent it shall inform the person or the

authorised undertaking concerned in writing of the reason for its

refusal.

(4) If any person or any authorised undertaking takes or

decides to take any action set out in sub-article (1) without

obtaining the consent of the competent authority, then, without

prejudice to any other penalty which may be imposed under this

Act, the competent authority shall have the power to make an order

(a) restraining such person or authorised 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 the

position existing immediately before the action was

taken;

(d) restraining such person or authorised undertaking from

exercising any rights which such action would, if

lawful, have conferred upon them, including the right

to receive any payment or to exercise any voting rights

attaching to the shares acquired;

(e) restraining such person or authorised undertaking from

taking any similar action or any other action within the

categories set out in sub-article(1).

(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, such

undertaking shall, not later than six months before the date on

which it intends to cease to carry on such business, give notice

thereof in writing to the competent authority and the authorised

77. insurance undertaking shall comply with any provision of this Act

that may be required of it in such circumstances.

(2) Where an authorised insurance undertaking gives notice to

the competent authority under sub-article (1), the competent

authority -

(a) shall require the undertaking to -

(i)

give publicity to the matter, amongst its

policyholders and in the press in the form and

manner as may be determined by Insurance

Rules made for the purpose of this article;

(ii) discharge all its liabilities to its policyholders

and creditors in a manner acceptable to the

competent authority;

(iii) appoint a person which shall service or, as the

case may be, run-off such business; and

(b) may require the undertaking to ascertain that its

technical provisions meet the requirements of article

18E. (3) The competent authority shall, not later than thirty days

before the proposed date on which an authorised insurance

undertaking as aforesaid intends to cease to carry on the business it

is authorised to carry on, issue a permit to the authorised insurance

undertaking concerned -

(a) authorising it to cease to carry on such business and to

service or run-off that business, as from a specified

date;

(b) specifying the conditions under which such service or

run-off shall be carried out; and

(c) authorising a person to carry out such service or run-

off.

Every authorised insurance undertaking issued under

article 39 with a permit authorising it to cease to carry on the

business it is authorised to carry on shall not, as from the date

specified in the permit ("the specified date"), effect and carry out

any new contracts of insurance in the business mentioned in the

permit 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 the

specified date.

The provisions of articles 39 and 40 shall apply mutatis

mutandis to undertakings whose business is restricted to

reinsurance.

(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 measures

shall be applied in accordance with regulations

made for the purposes of this article;

(ii) such

undertaking

shall,

dissolve

and

consequentially wind up under and in

accordance with regulations made under this

article; 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 be

applied in accordance with regulations made for

the purposes of this article;

(ii)

such branch shall dissolve and consequentially

wind up under and in accordance with regulations

made for the purposes of this article.

(2) Where it appears to the competent authority that an

authorised insurance undertaking is, for any reason whatever, likely

to dissolve and wind up, or has given notice of dissolving and

winding up, or is being dissolved and wound up, the competent

authority shall -

(a) in the case of an undertaking whose head office is in

Malta, prohibit the free disposal of the assets of the

undertaking whether such assets are situated in Malta

or 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 other

country if such assets relate to the undertaking’s

business in Malta,

if such prohibition has not been imposed on the insurance

undertaking by virtue of or under any other provision of this Act.

(3) Notwithstanding the provisions of any other law, the assets

of an authorised insurance undertaking which are prohibited under

sub-article (2) or by virtue of or under any other provision of this

Act to be freely disposed of shall be available only for meeting the

liabilities of the undertaking attributable to its business of

insurance

Provided that debts and other liabilities arising out of

contracts of insurance attributable to its business of insurance shall

rank before any other claim against such assets.

(4) Where the value of the assets mentioned in sub-article (3)

exceeds the amount of the liabilities mentioned in that sub-article

the restriction imposed by that sub-article shall not apply to so

much of those assets as represents the excess.

(5) In so far as the provisions of this article are inconsistent

with the provisions of any other law, the provisions of this article

shall prevail, and the provisions of any other law shall, to the extent

of the inconsistency, not apply to such 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 head

office is in Malta, including their branches, if any, and of branches

of third country insurance undertakings, and different provisions

may be made for different cases or classes of cases, and account

shall be taken of Malta’s international commitments in this regard.

Such regulations may provide for the implementation of detailed

re-organisation measures and procedures, including the following

matters: the publication and submission of information in such

language or languages and in such newspapers or other publications

as may be prescribed, the submission of information to creditors,

and the manner and procedure thereof, the notification to creditors

and the procedure for the submission of claims or representations,

measures for the protection of the rights of creditors and other third

parties, including set-off arrangements; consultation between the

competent authority and any other regulatory, administrative or

judicial authorities in Malta and outside Malta with competence

over the winding-up or re-organisation of such undertakings or of

branches thereof; the publication of decisions relating to such

winding-up or re-organisation procedures; the establishment of

rules governing the applicability of the proper or applicable law

and other issues of conflict of laws.

(7) Where an authorised insurance or reinsurance undertaking

takes a decision to dissolve and wind up, it shall immediately

notify, in writing, the competent authority of such decision before

taking any further action to that effect.

(8) (a) An authorised reinsurance undertaking with its head

office in Malta shall dissolve and wind up in

accordance with the provisions of the Companies Act.

(b) An authorised third country reinsurance undertaking

shall dissolve and wind up in accordance with the laws

of the country where the head office of such

undertaking is situated governing the dissolution and

winding up of such undertakings.

(1) An authorised undertaking whose head office is in

Malta, carrying on long term business may not be dissolved and

consequently wound up voluntarily without the consent of the

competent 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-article

(1).

(3) Without prejudice to the provisions contained in article 41,

in the event of an undertaking as aforesaid being dissolved and

wound up -

(a) the assets representing the technical provisions

maintained by the undertaking in respect of its long

term business shall be available only for meeting the

liabilities of the undertaking attributable to that

business;

(b) the other assets of the undertaking shall be available

only for meeting the liabilities of the undertaking

attributable 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 that sub-

article shall not apply to so much of those assets as represents the

excess.

PART X

OBLIGATIONS ON UNDERTAKINGS

(1) The holder of an authorisation issued under this Act to

carry on the business of insurance and the holder of a permit issued

thereunder to service or run-off that business shall notify in writing

the competent authority of any material changes in the

documentation or information provided or required to be provided

by or under this Act and any regulations, Insurance Rules or Conduct

of Business Rules made thereunder, as soon as the holder becomes

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 other

instrument constituting the undertaking, submit in

writing to the competent authority particulars of the

proposed addition or alteration for its prior consent;

and no such addition or alteration shall be made or

shall be registered, or shall take effect, whether it is

registered or not, unless and until the competent

authority has signified its consent in writing; and

(b) at least once a year, inform the competent authority of

the names of the persons holding a qualifying

shareholding in the undertaking and the percentage of

such holding; and the competent authority may, by

Insurance Rules made for the purposes of this article,

determine the form, manner and content of the

information to be forwarded to it and the date by

which such information shall be forwarded shall also

be established by that rule.

(3) Without prejudice to the foregoing provisions of this

article, an authorised insurance or reinsurance undertaking shall

notify the competent authority on a continuous basis, with any

change or circumstances which may give rise to the existence of

close links.

(1) No insurance undertaking authorised under this Act to

carry on long term business shall enter into a contract of insurance

the effecting of which constitutes the carrying on of long term

business, 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 to

that contract; or

(b) does so at the time when the contract is entered into.

(2) Regulations under this article may be made with respect to

any matter related to a statutory notice; and the regulations may

exempt from any requirement contracts as may therein be

prescribed.

(3) For the purposes of this article a statutory notice is a notice

which -

(a) contains such matters (and no others) and is in such

form as may be prescribed and complies with such

requirements as may be prescribed for securing that

the notice is easily intelligible; and

(b) has annexed to it a form of notice of cancellation of a

description as may be prescribed for serving by means

as may be prescribed a notice of cancellation on the

authorised undertaking.

Regulations may be made, as respects the matters as may

therein be prescribed, in relation to contracts of insurance the

effecting of which constitutes the carrying on of long term business

and which -

(a) are entered into by an insurance undertaking whose

head office is in Malta authorised under this Act to

carry on long term business; and

(b) are contracts under which the benefits payable to the

policyholder are wholly or partly to be determined by

reference to the value of, or the income from, property

of any description (whether or not specified in the

contract) or by reference to fluctuations in, or in an

index of, the value of property of any description

(whether or not so specified).

No contract of insurance shall be held void or voidable by

an insurer by reason only that, at the time the contract is entered

into, there is a breach of any provision of this Act or of the

Insurance 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 of this

Act, or of any Insurance Distribution Rules or Conduct of Business

Rules issued in virtue of the Act.

(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 risk

situated in Malta or to a commitment where Malta is the country of

the commitment of a class or classes or part classes of business 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 to

reinsurance.

(1) No insurance undertaking authorised under this Act

shall issue or cause to be issued any advertisement or carry out or

cause to be carried any promotional activity related to the business

of insurance which misleads, or directly or by implication is likely

to mislead, or deceive any prospective policyholder, or the

insurance sector in general, or the general public with respect to its

assets or corporate structure or financial standing or authorisation

or any other material respect

Provided that, in the case of an undertaking whose head

office is in Malta, the provisions of this sub-article shall also apply

with respect to -

(a) an advertisement issued or caused to be issued; and

(b) a promotional activity as aforesaid carried out or

caused to be carried out,

from Malta or in or from a country outside Malta.

(2) The competent authority may by Conduct of Business Rules

made for the purposes of this article determine the form and content

of insurance advertisements and make different provision in

relation to insurance advertisements of different classes or part

classes or descriptions; and the manner in which any promotional

activity as aforesaid shall be carried out or caused to be carried out.

(3) The provisions of sub-article (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 any

promotional activity which is in breach of or does not comply with

any of the provisions of sub-article (1) or (2), the competent

authority may issue an order directing the undertaking -

(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 sub-article (4) or refuses

or fails to comply with such order within the time specified therein,

without prejudice to any penalty which the undertaking may incur

under this Act, the competent authority shall have the power to

enforce, at the expense of the undertaking concerned, the order

issued by it under that sub-article.

(1) For the purposes of this article, "syndicate" means a

member or group of members of Lloyd’s underwriting business of

insurance at Lloyd’s through the agency of a managing agent to

which a particular syndicate number is assigned by or under the

authority of the Council of Lloyd’s.

(2) Where the members of Lloyd’s carry on business of

insurance in Malta, they shall carry on such business in exercise 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 representative

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 its

members and to file any judicial acts in the registry of any court or

similar authority in Malta on behalf of Lloyd’s or any of its

members. The general representative shall not be personally liable

for the debts and obligations of Lloyd’s or any of its members and

accordingly no execution of any precautionary or executive warrant

against Lloyd’s or any of its members shall be made against

Lloyd’s general representative.

(5) It shall be sufficient in any judicial act (other than an

application for the issue of any precautionary or executive warrant)

filed by or against members of Lloyd’s in connection with a policy

underwritten by them to file the act in the name of the Lloyd’s

representative in Malta as representative of those members;

provided the act commencing proceedings contains a statement that

it is being filed in connection with a policy of insurance

underwritten by members of Lloyd’s and giving particulars of the

number reference and date of the policy in respect of which the act

is filed, the identifying number of each of the syndicates

subscribing thereto and, where known, the names of the members

of Lloyd’s comprising those syndicates. This sub-article shall apply

notwithstanding any provision to the contrary contained in the

Code of Organization and Civil Procedure.

(6)

The Lloyd’s representative shall within forty-five days after

the filing by him of the judicial act, or of its service on him, as the

case may be, file a note in the records of the judicial act filed as

aforesaid containing a list of the names of the members comprising

the syndicates subscribing to the policy and any such note shall be

deemed to be an integral part of the judgment or decree emanating

from the court subsequent to the judicial act and such judgment or

decree shall be binding on the members whose names are listed in

the note in the same manner as it would so have bound them if they

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 judicial act

w h e r e p a r t i c u l a r s o f t h e n a m e s o f t h e m e m b e r s o f L l o y d ’s

comprising those syndicates are already contained in the act or

where any such note has already been filed in the records of the

case.

(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 its

registered address in Malta.

Every

authorised

insurance

or

reinsurance

undertaking shall utilise the services of insurance intermediaries,

reinsurance intermediaries, tied insurance intermediaries and

ancillary 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 Insurance

Distribution Directive where applicable; or

(c) registered or regulated to carry out such services in a

non-Member State or non-EEA State in accordance

with the provisions of the laws applicable in such

State.

(1) An authorised undertaking shall not be required to

subm it to the competent auth ority for it s prior app roval or

systematically notify the competent authority of

(a) general and special policy conditions, of scales of

premiums, of the technical bases used in particular for

calculating scales of premiums and technical

provisions, or of forms and other printed documents

which the authorised undertaking intends to use in its

dealings with policyholders or ceding or retro-ceding

undertakings;

(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

referred to in sub-article (1) for the purpose of

verifying compliance with the law applicable to

contracts of insurance;

(b) in respect of long term business, the notification of the

technical bases used in particular for calculating scales

of premiums and technical provisions for the sole

purpose of verifying compliance with any actuarial

principles which may be established by this Act,

regulations or Insurance Rules issued thereunder.

An authorised insurance undertaking and an authorised

reinsurance undertaking carrying out insurance distribution

activities and reinsurance distribution activities in terms of the

Insurance Distribution Act shall comply with the applicable

provisions of the said Act and of any regulations, Insurance

Distribution Rules and Conduct of Business Rules issued

thereunder.

PART XI

PROTECTION AND COMPENSATION FUND

(1)

There shall be established a fund, as may be

prescribed, which shall be known as the "Protection and Compensation

Fund"

(a) for the payment of any claims in respect of

(i)

risks and commitments against an insurance

undertaking carrying on business of insurance in

Malta, as may be prescribed under the Insurance

Business (Protection and Compensation Fund)

Regulations, remaining unpaid by reason of the

insolvency of such undertaking, subject to such

limitations, restrictions and exclusions as may be

prescribed by the said regulations; and

(ii)

risks related to motor vehicle liability insurance

business against an insurance undertaking carrying

on motor vehicle liability insurance business from

Malta, as may be prescribed in accordance with the

Insurance Business (Protection and Compensation

Fund) Regulations, remaining unpaid by reason of

the insolvency of such undertaking, subject to such

limitations, restrictions and exclusions as may be

prescribed by the said regulations; and

(b)

for the payment of compensation to victims of road

traffic accidents as may be prescribed subject to such

limitations and restrictions as may be prescribed.

(2)

Without prejudice to the provisions of this Act and of any

regulations issued thereunder, the Protection and Compensation Fund

shall be a body corporate having a distinct legal personality and shall

be capable of entering into contracts, whether of borrowing or if

otherwise incurring indebtedness for the purposes of its functions,

acquiring, holding and disposing of any kind of property for the

purposes of its functions; of suing or being sued, doing all such

matters and entering into all such negotiations, transactions and

agreements as are incidental or conducive to the exercise or

performance of its functions. Without prejudice to the generality of the

foregoing, the Protection and Compensation Fund shall for this

purpose have the power to enter into such reasonable administrative,

management or other arrangements as may be necessary to enable it to

fulfil its objectives and functions under this Act and under the

Insurance Business (Protection and Compensation Fund) Regulations,

including to become a party to the agreement referred to in regulation

10A of the Insurance Business (General Provisions of Supervision)

Regulations, and to delegate to any body or person any of its functions

as the Management Committee appointed in accordance with the

Insurance Business (Protection and Compensation Fund)

Regulations deems necessary.

(1) The Protection and Compensation Fund shall comprise of

different funds as may be prescribed by the Insurance Business

(Protection and Compensation Fund) Regulations, of all contributions

made thereto in accordance with this Act and any regulations made

thereunder, and of all other assets and revenues pertaining to it. The

assets of every fund shall be kept separate and separately identifiable

from the assets of the other Funds, as may be prescribed in the said

regulations.

(2) All insurance undertakings, as prescribed by the

regulations, which carry on business of insurance in Malta shall

contribute to the Protection and Compensation Fund in such amounts

and to such limitations as shall be prescribed and different amounts

and limitations may be prescribed with respect to different kinds of

business of insurance or different classes or part classes thereof, or

different kinds of insurance undertakings, or in view of other

different circumstances.

(3) Insurance undertakings which carry on motor vehicle liability

insurance business from Malta, as may prescribed by the Insurance

Business (Protection and Compensation Fund) Regulations, shall

contribute to the Protection and Compensation Fund in such amounts

and to such limitations, as may be prescribed by the Insurance Business

(Protection and Compensation Fund) Regulations, and different

amounts and limitations may so apply as may be prescribed in the said

regulations.

(1) The Protection and Compensation Fund shall be

managed and otherwise dealt with in accordance with regulations

made for the purposes of this Act

Provided that such regulations shall ensure that

(a) payments made into the Protection and Compensation

INSURANCE BUSINESS

Fund by undertakings to carry on long term business in

Malta shall be utilised for compensation with respect to

long term business, and shall be treated separately and

utilised exclusively for compensation of claims relating

to long term business;

(b) payments made into the Protection and Compensation

Fund by undertakings to carry on general business in

Malta shall be treated separately, and shall be utilised

exclusively for compensation of claims relating to

general business

Provided that payments made into the Protection and

Compensation Fund by undertakings carrying on motor vehicle

liability insurance business in Malta, on or after the initiation date as

defined herein, shall be treated separately from general business, and

shall be utilised exclusively for compensation of claims relating to

such motor vehicle liability insurance business carried on in Malta, on

or after such date; and

(c) payments made into the Protection and Compensation

Fund by undertakings carrying on motor vehicle liability

insurance business from Malta shall also be treated

separately and shall be utilised exclusively for

compensation of claims relating motor vehicle liability

insurance business carried on from Malta.

(2)

For the purposes of this article, "initiation date" means

(a) the date of the entry into force of the agreement referred

to in the first sub-paragraph of Article 10a(13) and the

first sub-paragraph of Article 25a(13) of Directive 2009/

103/EC of the European Parliament and of the Council

of 16 September 2009 relating to insurance against civil

liability in respect of the use of motor vehicles and the

enforcement of the obligation to insure against such

liability, as amended from time to time; or

(b) the date of application of the Commission delegated act

referred to in the fourth sub-paragraph of Article

10a(13) and the fourth sub-paragraph of Article 25a(13)

of the said Directive mentioned in paragraph (a),

whichever is the earlier.

No claim for payment of compensation shall be made out

of the Protection and Compensation Fund unless such claim is made

(a) with respect to a claim in accordance with article 49(a)(i),

within two years from the date that the name of the

undertaking is struck off the register established in the

Companies Act or such undertaking is otherwise definitely

wound up, in those circumstances only where

compensation would be due from Fund A;

(aa) with respect to a claim in accordance with article

49(a)(ii), within the period and in the manner prescribed

by the Insurance Business (Protection and Compensation

Fund) Regulations;"; and

(b) with respect a claim in accordance with article 49(b),

within two years from the date of occurrence of the

accident relating to that claim

Provided that for the purposes of this article, the words

"Fund A" shall have the same meaning as assigned to them

under the Insurance Business (Protection and

Compensation Fund) Regulations.

All contributions made to the Protection and Compensation

Fund and any income and assets belonging to the Protection and

Compensation Fund shall be exempted from any liability for the

payment of income tax under any law for the time being in force.

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 or

provision as may arise under a Directive, Regulation or Decision of

the European Union or any other similar measure.

PART XII

GENERAL PROVISIONS

(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 facilitating

the supervision of insurance and reinsurance within

the European Union and the application of the

Solvency II Directive;

(b) with overseas regulatory authorities for the purposes

of the exercise of one or more of their regulatory

functions;

(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 the

authorities responsible for the supervision of financial

markets;

(b) bodies involved in the liquidation and insolvency of

insurance or reinsurance undertakings and in other

similar procedures;

(c) the authorities responsible for overseeing the bodies

involved in the liquidation and insolvency of insurance

undertakings, reinsurance undertakings and other

similar procedures;

(d) persons responsible for carrying out statutory audits of

the accounts of insurance undertakings, reinsurance

undertakings and other financial institutions;

INSURANCE BUSINESS

(e) bodies which administer compulsory winding-up

proceedings or guarantee funds, where that

information is necessary for the performance of their

duties;

(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 the

accounts of insurance undertakings, reinsurance

undertakings, credit institutions, investment firms and

other financial institutions;

(h) actuaries appointed by insurance or reinsurance

undertakings carrying out actuarial tasks in relation to

those undertakings and the bodies responsible for

overseeing such actuaries; and

(i)

authorities responsible for supervising credit institutions

and financial institutions as defined in Article 3 of

Directive (EU) 2015/849 of the European Parliament and

of the Council, for the purposes of ensuring compliance

with the said Directive.

(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 such

information

(a) the information required must be for the purpose of

carrying out the overseeing or supervision of the

functions or activities of such authorities, bodies or

persons;

(b) the information received by such authorities, bodies or

persons shall be subject to the duty of professional

secrecy;

(c) where the information in the possession of the

competent authority originates from a European

regulatory authority or an overseas regulatory

authority, it shall not be disclosed without the express

consent of the European regulatory authority or the

overseas regulatory authority from which it originates

and, where appropriate, solely for the purposes for

which 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 met by

the recipient of such information

(a) the information exchanged shall be intended for the

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 European

regulatory authority or an overseas regulatory

authority, it shall not be disclosed without the express

agreement of the European regulatory authority or the

overseas regulatory authority from which it originates

and, where appropriate, solely for the purposes for

which the authority gave its agreement;

(d) such recipient shall provide the name and

responsibilities of the persons to whom such

information shall be sent

Provided that, where the authorities or bodies perform their

tasks of detection or investigation with the assistance of persons

appointed for that purpose, in view of their specific competence,

and such persons are not employed with such bodies or persons,

such information may only be exchanged with such persons if the

conditions 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 information

in terms of this article.

(6)

(a) Without prejudice to the provisions of this article and

article 59, the competent authority may transmit

information intended for the performance of their tasks

to the following

(i)

the Central Bank of Malta, the central banks of

the European System of Central Banks

(including the European Central Bank) and other

bodies with a similar function in their capacity

as monetary authorities where this information

is relevant to their respective statutory tasks,

including the conduct of monetary policy and

related liquidity provision, oversight of

payments, clearing and securities settlement

systems and safeguarding the stability of the

financial system;

(ii) where appropriate, other national public

authorities responsible for overseeing payment

systems; 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 the

European System of Central Banks (including the

European Central Bank) where that information is

relevant to their statutory tasks, including the conduct

of monetary policy and related liquidity provision,

oversight of payments, clearing and securities

settlement systems and safeguarding the stability of

the financial system, and to the European Systemic

Risk Board, where such information is relevant to its

tasks.

(c) Such authorities or bodies may also communicate to

the competent authority such information as they may

need for the purposes of article 59(4).

(7) Without prejudice to article 59, the competent authority

may exchange information with other departments of Member

St a t e s c e n t r a l g o v e r n m e n t a d m i n i s t r a t i o n s r e s p o n s i b l e f o r

legislation on the supervision of credit institutions, financial

institutions, investment services and insurance and reinsurance

undertakings and to inspectors acting on behalf of those

departments 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 the

request of, or for the purposes of, assisting a European regulatory

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 of

article 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 an

authorisation;

(d) the power to require information and documentation

under article 29;

(e) the power to appoint inspectors under article 30;

(f)

the power of entry to obtain information and

documentation under article 31;

(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 such

information is the result of any of the above powers or

otherwise; and

(i)

the power to prohibit the free disposal of the

undertaking’s assets located in Malta in the

circumstances referred to in Articles 137 to 139 and

Article 144(2) of the Solvency II Directive; the

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 case of

an undertaking authorised to carry on long term business, its

approved actuary and the competent authority on a bilateral or a

multilateral basis as circumstances may warrant. Such meetings

may be called by any of the parties, and shall in each case be

chaired by the competent authority.

(1) The competent authority shall cooperate with EIOPA

for the purposes of the Solvency II Directive in accordance with

Regulation (EU) No 1094/2010.

(2) The competent authority shall provide EIOPA with all

information necessary to carry out its duties in accordance with

Regulation (EU) No 1094/2010.

(1) The competent authority may enter into co-operation

agreements with overseas regulatory authorities or with such

authorities or bodies as defined in article 55(2), in countries that

are not Member States or EEA States only if the information

disclosed is subject to the guarantees of professional secrecy at

least equivalent to those required under articles 55 and 59. Such

exchange of information must be intended for the performance of

the 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-article (1),

had originated from a European regulatory authority, it may only be

disclosed to an overseas regulatory authority with the express

agreement of such European regulatory authority which had

transmitted it and, where appropriate, solely for the purposes for

which that authority had given its agreement.

(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 his

communicating in good faith to the competent authority, whether or

not in response to a request made by it, any information or opinion

on a matter to which this article applies and which is relevant to

any function of the competent authority under this Act.

(2) In relation to an auditor or an actuary of an authorised

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 becomes

aware in his capacity as the person making the report which relates

to the business or affairs of the undertaking in relation to which his

report is made.

(4) If it appears to the competent authority that any accountants

or class of accountants who are persons to whom sub-article (1)

applies are not subject to satisfactory rules made or guidelines

issued by a professional body specifying circumstances in which

matters are to be communicated to the competent authority as

mentioned in that sub-article, the competent authority may, after

consultation with such bodies as appear to the competent authority

to represent the interests of accountants and authorised

undertakings, make rules for the purposes of this article, applying

to those accountants and specifying such circumstances; and it shall

be the duty of an accountant to whom the rules apply to

communicate a matter to the competent authority in the

circumstances specified by the rules.

(1) For the purpose of this Act, the term "Financial

Services Tribunal" means the tribunal referred to in article 21 of the

Malta Financial Services Authority Act, and the term "Tribunal"

shall be construed accordingly

Provided that for the purpose of proceedings arising under

this Act the members appointed under article 21(4) of the Malta

Financial Services Authority Act, shall be substituted by persons to

be appointed by the Minister under this Act and who, in his

opinion, possess the necessary expertise and experience in the

business of insurance; and the provisions of article 21(5) to (7) of

the said Act shall apply to the persons appointed pursuant to this

proviso in the same manner and to the same extent as they apply to

the members mentioned in article 21(2) of the said Act.

(2) The Financial Services Tribunal shall, in addition to the

functions and powers assigned to it under article 58, have the

function and power to decide applications for transfer of long term

business filed before it under this Act.

(3) Upon determining an application for transfer of long term

business, the Tribunal shall have the power to order the payment of

costs and expenses by any party to the application.

(4) The provisions of article 21 of the Malta Financial Services

Authority Act and of any regulations made thereunder shall, except

in so far as any of them is incompatible with the provisions of this

article or of article 35 or 58, apply to applications for transfer of

long term business and appeals made to the Financial Services

Tribunal under this Act

Provided that regulations made under the said article 21

may distinguish between procedures made for the purposes of the

provisions 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 for

determining an application for transfer of long term business filed

under that article, provided that in the absence of such regulations

the Tribunal shall regulate its own procedure.

(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).

(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.

(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 experts

acting on behalf of the competent authority for the purposes of, or

pursuant to, any of the provisions of this Act, or of any regulations

made thereunder, or of any Insurance Rules, or in the discharge of

any functions under any of the said provisions, shall be treated as

confidential and protected by the duty of professional secrecy.

(2) Without prejudice to cases covered by criminal law, the

persons referred to in sub-article (1) shall not disclose information

obtained from an authorised insurance or reinsurance undertaking

unless such disclosure of information be done in summary or

aggregate form, so as not to enable the identity of such

undertaking, to whom such information relates, to be ascertained

Provided that, such persons may disclose confidential

information in civil or commercial proceedings where an

authorised insurance or reinsurance undertaking has been declared

insolvent or is being compulsorily wound up, as long as such

information does not concern third parties involved in attempts to

rescue that undertaking.

(3) Nothing in this Act shall authorise the competent authority

to enquire or cause an enquiry to be made in an authorised

insurance or reinsurance undertaking into the affairs of any

individual policyholder of the authorised insurance or reinsurance

undertaking except for the purpose of ensuring compliance with

any 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 article

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 to

facilitate the monitoring of the carrying on of such

business especially with regard to the monitoring of

the technical provisions, the Solvency Capital

Requirement, the Minimum Capital Requirement and

the system of governance;

(b) to impose penalties or adopt other administrative

measures and to consider representations received in

their regard;

(c) in appeals against decisions of the competent authority

under article 58; and

(d) in judicial proceedings under the Solvency II

Directive.

(5) When an officer or an employee of an authorised insurance

or reinsurance undertaking has reason to believe that a transaction

or a proposed transaction could involve money laundering or the

funding of terrorism, he shall act in compliance with the reporting

and other obligations set out in the regulations made under article

12 of the Prevention of Money Laundering Act and any procedures

and guidance issued thereunder, and such disclosure shall not

constitute a breach of confidentiality.

(6) In this article, any reference to agents has the meaning

assigned to it in article 30(10).

60. (1) Notwithstanding the provisions of the Professional

Secrecy Act, article 257 of the Criminal Code shall not affect or

prevent the exchange of information about policies, policyholders

potential policyholders, insureds, claimants or other related

parties -

(a) amongst insurance undertakings authorised to carry on

the business of insurance ("insurers");

(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 suppressing

insurance fraud.

(2)

Without prejudice to Regulation (EU) 2016/679 of the

European Parliament and of the Council of 27 April 2016 on the

protection of natural persons with regard to the processing of personal

data and on the free movement of such data, and repealing Directive

95/46/EC (General Data Protection Regulation), as amended from

time to time, the collection, use, storage and transmission of

information for the purposes of the exchanging of personal data

referred to in sub-article (1) is deemed to be a necessary measure for

the prevention, detection or suppression of insurance fraud.

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 known

registered office, of that commercial partnership; or

(e) in the case of any other body of persons, whether

corporate or unincorporate, it has been given or served

in any of the manners aforesaid to or on an officer,

secretary, or a clerk of that body or to any person

designated by that body for that purpose as the case

may be; or

(f)

in the case of a third country insurance or reinsurance

undertaking or Lloyd’s, it has been given or served to

the 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, authorised

to act for that body of persons in the same manner and to the same

extent as an insurance agent.

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 similar

in nature to a company as known under the laws of

Malta and which would, if it were such a company,

qualify to be authorised under this Act as an

undertaking carrying on business of insurance or a

company enrolled to act as an insurance manager or

insurance broker under the Insurance Distribution Act,

to be continued as authorised under this Act or

enrolled under the Insurance Distribution Act; and

(b) an undertaking carrying on business of insurance

authorised under this Act or a company enrolled to act

as insurance manager or insurance broker under the

Insurance Distribution Act to be continued as a body

corporate registered, incorporated or constituted under

the laws of a country outside Malta, in either case by

complying with the regulations;

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 not take

place unless -

(i)

such continuance (or similar process, including

conversion) is permitted by the law of such

foreign jurisdiction and is in accordance with

such provisions thereof as may bring about such

continuance (or similar process); and

(ii) such continuance (or similar process) will

operate the continuation of the corporate

existence of the undertaking or company as, or

its conversion into, a body corporate which will

continue to retain or will succeed to all assets,

rights, and liabilities of such undertaking or

company.

(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 into

shares.

(4) The provisions of this article and of any regulations made

thereunder shall prevail over anything to the contrary contained in

the Companies Act, or regulations made thereunder, with respect to

continuance of undertakings or companies.

63. (Deleted by Act XXXIII. 2015.70).

64. (1) The Minister may, after consultation with the

competent authority, make regulations to give effect to the

provisions of this Act and to amend or revoke any schedule thereto

and may amend or revoke such regulations; and without prejudice

to the generality of the foregoing, the Minister may, by such

regulations, in particular, make provision in respect of any one 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 the

sound and prudent management of its activities;

(c) provide for and regulate the payment by any person,

body or cell created by a cell company, as the case may

be, of any fees, duties and such other charges payable

to the competent authority in respect of any matter

provided for, by or under this Act or any regulations

made under this article;

(d) 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 provision

of any regulation made as aforesaid shall become

liable, being penalties not exceeding one hundred and

fifty thousand euro (€150,000), in respect of any offence

and in respect of a continuing offence of a further penalty

and not exceeding two hundred and thirty euro (€230) for

each day during which the offence continues.

(2) Except where any regulation made under this Act provides

for a lesser penalty, any person acting in contravention of or failing

to comply with or otherwise observe any such regulation shall be

liable to a penalty of not less than two hundred and thirty euro (€230)

and not exceeding one hundred and fifty thousand euro (€150,000), in

respect of each offence and in the case of a continuing offence to a

further penalty not exceeding two hundred and thirty euro (€230) for

each day during which the offence continues.

(3) The Minister may, after consultation with the competent

authority, make regulations for the supervision of insurance and

reinsurance undertakings in a group ("group supervision"). Any such

regulations may provide for cases of application, scope and levels of

group supervision, provisions relating to the solvency of insurance

groups, measures to facilitate group supervision including the

appointment of the group supervisor, the verification of equivalence of

supervision of a parent undertaking with its head office in a third

country, which forms part of a group and for a parent undertaking of

one or more insurance or reinsurance undertakings, which is a mixed-

activity insurance holding company.

(4) The Minister may, after consultation with the competent

authority, make regulations providing for the establishment of

special purpose vehicles within the meaning of the Solvency II

Directive, 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 specified

therein, and in particular may provide that in so far as any of the

provisions of the regulations are inconsistent with the provisions 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 shall, 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 or

any 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 including

the requirement of other forms of authorisation and notification

procedures as may be prescribed.

(6) The Minister may, after consultation with the competent

authority, make regulations applicable to captive insurance

undertakings and captive reinsurance undertakings, exempting

from and modifying any of the provisions of this Act or of any

regulations 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 or

provision as may arise under a Directive, Regulation or Decision of

the European Union or any other similar measure relevant for the

purposes of this Act. Any such regulations made to transpose any

requirement or provision as may arise under a Directive, Regulation or

Decision of the European Union or any other similar measure 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

specified therein, and in particular may provide that in so far as any of

the provisions of the regulations are inconsistent with the provisions 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 shall, 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 general

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 specified

therein in respect of different cases, circumstances or purposes and

may give the competent authority such power of adaptation of the

regulations as may be specified therein.

(10) The exercise of any of the powers assigned under this

article shall be subject to any obligations or restrictions arising

from Malta’s international commitments.

(11) Regulations made under this Act and any amendment or

revocation of such regulations, may be published in the English

language only.

64A. Without prejudice to any provision of this Act granting the

Minister the power to make regulations, the Minister may, subject to

the provisions of the Exclusive Economic Zone Act, from time to

time, make, amend, substitute or repeal regulations for the purpose of

regulating, prescribing or otherwise providing for any matters

regulated by or under this Act or by or under any subsidiary legislation

made thereunder, in respect of an exclusive economic zone area or an

environment protection area as defined in the Exclusive Economic

Zone Act or any activities therein including, but not limited, to the

applicability or otherwise of this Act and, or of any subsidiary

legislation made thereunder.

65. (Deleted by Act XXXIII. 2015.72).

66. Deleted by Act V.2020.46.

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 this

article.

(2)

Any person -

(a) who, for the purpose of obtaining the issue of an

authorisation under this Act or pursuant to any of the

provisions of this Act or any regulations, Insurance

Rules or Conduct of Business Rules made thereunder,

furnishes information or makes a statement or a

declaration which he knows to be inaccurate, false or

misleading in any material particular, or recklessly

furnishes information or makes a statement or a

declaration which is inaccurate, false or misleading in

any material particular; or

(b) who is knowingly a party to, or procures or aids and

abets, any contravention of any provision of this Act

any regulations, Insurance Rules or Conduct of Business

Rules 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 the

provisions of this Act or of any regulations, of

any regulations, Insurance Rules or Conduct of

Business Rules made thereunder, or any

authorisation or permit issued thereunder; or

(ii) fails to take reasonable steps to ensure the

correctness of the statements made or other

information given under any of the provisions

aforesaid; or

(iii) removes, destroys, conceals or fraudulently

alters any book, document or other paper with

intent to avoid detection of the commission of an

offence under any of the provisions aforesaid,

shall be guilty of an offence.

(3) For the purposes of sub-article (2)(f), the expression

"officer", in relation to an undertaking, shall include an insurance

agent, an insurance manager, or a person, other than an insurance

a g e n t o r a n i n s u r a n c e m a n a g e r, a u t h o r i s e d t o a c t f o r t h e

undertaking in the same manner and to the same extent as an

insurance agent.

(4) The Minister shall make regulations under this article

prescribing penalties for offences against this Act, and such

regulations may -

(a) prescribe penalties which are

enforceable

by

prosecution in the courts of Malta;

(b) prescribe different penalties for contraventions of

different provisions of this Act;

(c) prescribe penalties calculated in accordance with the

duration of the commission of the offence,

unless such penalties are otherwise imposed under article 64.

(5) The penalties prescribed by the regulations made under

sub-article (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 infringements, as

may be prescribed, which may be imposed and recovered by the

competent authority without recourse to a court hearing;

administrative penalties shall be due to the competent authority as a

civil debt

Provided that an administrative penalty may not be greater

than a financial penalty of one hundred and fifty thousand euro

(€150,000) in respect of each infringement or failure to comply, as the

case may be, and, where such infringement or failure to comply

continues, a further penalty not exceeding one hundred and sixteen

euro (€116) for each day during which the infringement or failure to

comply continues

68. (1) No proceedings for an offence under this Act and any

regulations made thereunder other than an infringement to which

article 67(6) applies shall be commenced without the sanction of

the Attorney General.

(2) The provisions of this Act and any regulations made

thereunder shall not affect any criminal proceedings that may be

competent under any other law.

69. (1) Subject to sub-article (4), every licence issued or other

action whatever taken or commenced under the Insurance Business

Act * (in this article referred to as "the Act") shall continue in force

and to be valid as if such licence were issued or other action were

taken or commenced under this Act.

(2) Every company licensed under the Act to carry on business

of insurance either as principal or as agent shall, not later than the

ap pointed dat e, conform with the prov isi ons of t his Act or

otherwise cease to carry on the business it was licensed to carry on,

and shall until the appointed date or until it conforms with the

provisions of this Act, whichever is the earlier, continue to be

governed by the provisions of the Act. For the purpose of this

article "appointed date" means a day being six months after the date

of the coming into force of this Act.

(3) Where a company ceases to carry on business of insurance

either as principal or as agent on grounds that such company did

not, on the appointed date, conform with the provisions of this Act,

that company shall be deemed to have given notice to the

competent authority under article 39 on the appointed date to cease

to carry on the business it was licensed to carry on, on the

appointed date, and to have been issued with a permit by the

competent authority under that article on the appointed date to

cease to carry on such business on the appointed date and to service

that business as from that date. The competent authority may

impose such conditions with regard to the servicing of that business

as it may deem proper.

*Repealed by this Act.

(4) Every licence issued or renewed or other action whatever

taken or commenced under the Act in so far as it applies to

insurance brokers and insurance salesmen, shall continue in force

and to be valid as if such licence were a certificate of enrolment

issued or as if such other action were action taken or commenced

under the Insurance Distribution Act.

(5) For the purposes of this article "licence" includes an

authority, permit, approval and appointment.

(6) Without prejudice to the provisions of article 12 of the

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 and

arrangement which were made in virtue of the Act, any regulation,

order or other instrument shall, if and as in force immediately

before the commencement of this article, be deemed to have been

made under or in virtue of this Act and shall continue in force and

m ay be am ended, altered , r epeal ed or otherwise dealt w ith

accordingly.

(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 directive

issued by the competent authority, and any reference in any law or

regulation to an insurance directive shall be deemed to be a

reference 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 established

by article 49 without the need of any formality other than this Act.

INSURANCE BUSINESS