Infringements) Regulations, 2000

L.N.10l of 2000

INSURANCE BROKERS AND OTHER INTERMEDIARIES

ACT, 1998

(ACT NO. XVIII OF 1998)

Insurance Intermediaries (Penalties for Offences and

Infringements) Regulations, 2000

IN exercise of the powers conferred by sections 3 and 48 of the

Insurance Brokers and Other Intermediaries Act, 1998, the Minister of

Finance, after consultation with the Malta Financial Services Centre,

has made the following regulations:-

(1) These regulations may be cited as the Insurance Citationand

Intermediaries (penalties for Offences and Infringements) Regulations, 2000. commencement.

(2) These regulations shall come into force on the 1st

September, 2000.

(Regulation 3)

Penalties which are enforceable by prosecution in the courts of Malta

Second Column

Third Column

First Column

Fine (mulfa)

Imprisonment

Level

not less than Lm 100 but

not more than three months

not more than Lm5,OOO

not less than Lml,OOO but

not less than one month but

not more than LmlO,OOO

not more than six months

not less than Lm5,OOO but

not less than six months but

not more than Lm50,OOO

not more than two years.

In these regulations, unless the context otherwise requires -

Interpretation.

"the Act" means the Insurance Brokers and Other

Intermediaries Act, 1998;

"administrative penalty" means a penalty which may be imposed

and recoverable by the Centre without recourse to a court hearing;

"the Centre" means the Malta Financial Services Centre

established by section 3 of the Malta Financial Services Centre

Act and appointed under section 3 of the Insurance Business Act, Cap. 330.

1998 to be the Competent Authority for the purposes of that Act :-tl~~.xVIl

and, by virtue of subsection (2) of section 3 of the Act, for the

purposes of the Act;

"court penalty" means a penalty which is enforceable by

prosecution in the courts of Malta;

"Financial Services Tribunal" shall be construed in accordance

with section 45 of the Act;

"Insurance Intermediaries Directive" means an Insurance

Intermediaries Directive as may be made by the Centre by virtue

of subsection (2) of section 4 of the Act for the purposes of any

provision of the Act or any rule or regulation made thereunder;

"Schedule" means a schedule to these regulations,

and the words and expressions which are also used in the Act have the

same meanings as in the Act.

(Regulation 3)

Administrative penalties which may be imposed by the Centre

without recourse to a court hearing

First Column

Second Column

Third Column

Penalty

Level

Daily penalty

not less than Lm50 but

not less than Lm5 but

not more than Lm250

not more than Lm 15

not less than Lm 100 but

not less than LmlO but

not more than Lm 1,000

not more than Lm30

not less than Lm 1,000 but

not less than Lm20 but

not more than Lm5,OOO

not more than Lm50.

(1) For the purposes of these regulations, penalties are

divided into court penalties which are enforceable by prosecution in

the courts of Malta and administrative penalties, and -

"court penalties" shall be construed in accordance with the

provisions of the First Schedule; and

"administrative penalties" shall be construed in accordance

with the provisions of the Second Schedule.

(2)

With respect to a penalty of any level specified in the

first column of the First Schedule which is a court penalty, the penalty

shall be either the corresponding fine (mu/fa) specified in the second

column thereof or the corresponding period of imprisonment specified

in the third column thereof or both such fine and imprisonment.

(3)

With respect to an administrative penalty of any level

specified in the first column of the Second Schedule the penalty shall

be the corresponding amount specified in the second column thereof

and the corresponding amount for each day during which the

infringement continues specified in the third column thereof.

(Regulation 4)

Court Penalties

First Column

Second Column

Third Column

Section

Offence

Penalty level

47(1)(a) with

Acting as an insurance broker and carrying

reference to

on business of insurance broking in or from

Malta without registration

47(1)(a) with

Carrying on business as an insurance broker

reference to

without enrolment

47(1)(a) with

Opening a branch or office, or setting up or

reference to

acquiring any subsidiary in a country

15(3)

outside Malta without the consent of the

Centre

47(1)(a) with

Negotiating, arranging or procuring with an

reference to

unauthorised company a contract of

21(1)

insurance relating to a risk situated in Malta

or a commitment where Malta is the country

of the commitment unless otherwise

approved

47(1)(a) with

Disclosing of information relating to the

reference to

affairs of an enrolled company or a client

39(2)

of an enrolled company other than in

specified circumstances

47(1)(d)

Failure to comply with any lawful order or

requirement of the Centre

47(1)(e)

Failure to comply with any order or

requirement of the Financial Services

Tribunal

47(1)(f)

Failure to comply with any lawful order or

requirement of any other person made under

the Act or any rules or regulations made

thereunder

First Column

Second Column

Third Column

Section

Offence

Penalty level

47(l)(g)

Altering, suppressing, concealing,

destroying or refusing to produce any

document which is lawfully required to be

produced by any person under the Act or

under any rules or regulations made

thereunder.

47(2)

Knowingly being a party to, or procuring

The penalty

or aiding and abetting, any contravention

level

of any provision of the Act or any rules or

applicable to

regulations made thereunder or any

the principal

Insurance Intermediaries Directives.

offence.

Any other offence arising under any provision of the Act not

I

specifically provided for in this Schedule.

(1)

Any person found guilty of an offence for having

contravened a provision of the Act mentioned in the first column of the

Third Schedule, with a corresponding general description of the offence

set out in the second column thereof, shall be liable to the corresponding

penalty of the level specified in the third column of the said Schedule.

(2) For any failure by any person to comply with any

provision of the Act mentioned in the first column of the Fourth

Schedule, consisting in the corresponding act or omission described in

the second column thereof, the Centre may by notice in writing impose

by way of an administrative penalty on the person concerned the

corresponding penalty specified in the third column of the said Schedule.

(3) Any description in the second column of the Third and

Fourth Schedules of any offence and failure as respectively referred to

in paragraphs (1) and (2) of this regulation shall not be relied on in

interpreting the provision to which the offence or failure corresponds.

(Regulation 4)

In this Schedule "Administrative Penalties" are those made under and for the purpose

of section 3(3)(d) of the Act.

Administrative penalties

First Column

Third Column

Second Column

Section

Penalty level

Infringement

13(4)

Failure of person or company to comply

with any condition of registration or

enrolment

14(2)

Failure of displaying at the place of business

in a part accessible to public certificate of

registration or enrolment

15(1)

Opening a branch in Malta without making

an application in that regard to the Centre

15(2)

Carrying on business of insurance broking

from a branch under the management of a

person other than a person who is a

registered insurance broker

17(4)

Failure of person having his name struck

off the Brokers Register or company having

its name struck off the Brokers List to

surrender to the Centre certificate of

registration or enrolment or any official

copies thereof

19(1)

Failure of enrolled company to keep in a

separate account monies held in a fiduciary

capacity in accordance with requirements

as may be determined by an Insurance

Intermediaries Directive made for the

purpose of section 19.

Failure of enrolled company to effect and

hold a fidelity bond as respects its business

of insurance broking in accordance with

requirements as may be determined by an

Insurance Intermediary Directive made for I

the purpose of section 20

Third Column

First Column

Second Column

Penalty level

Section

Infringement

Failure of enrolled company to notify the

I

Centre in writing, within a specified period,

the name and the other particulars of the

company's directors and employees who are

registered in the Brokers Register; or to

notify the Centre in writing, within a

specified period, any changes occurring

among such directors and employees

Failure of enrolled company to forward

annually to the Centre a copy of the

company's financial statements; or to

forward such statements within a specified

period or a period as may be authorised by

the Centre; or to forward a copy of such

statements drawn up in accordance with the

provisions of section 23

Failure of enrolled company to forward

annually to the Centre a statement in respect

of the business of insurance braking carried

on by the company; or to forward such

statement in the form, content and manner

as may be determined by an Insurance

Intermediaries Directive made for the

purpose of section 24

Failure of enrolled company to notify the

Centre in writing of ceasing to carryon

business as insurance broker; or to comply

with any condition made by the Centre in

the permit to cease the business

26(2) or (3)

Failure of enrolled company to inform the

Centre in writing of altering its financial

year

27(1)

Failure of enrolled company to appoint

approved auditor

27(5)

Failure of auditor to give notice in writing

to the Centre ifhe resigns, does not seek re-

appointment or qualifies the audit report

Third Column

First Column

Second Column

Penalty level

Section

Infringement

27(6)

Failure of enrolled company to give notice

in writing to the Centre if it receives notice

of a resolution to appoint as auditor a person

other than the retiring auditor or not to re-

appoint the retiring auditor

27(7)

Failure of enrolled company to notify the

Centre in writing, or to notify the Centre in

writing within a specified period, the

reasons for terminating the appointment of

the company's auditor

27(8)

Failure of enrolled company to change

auditor if so required by the Centre

27(12)

Failure of auditor to inform the Centre of

any of the matters provided by section

27(12)

29(1)

Failure of authorised company appointing

persons to act as insurance sub-agents and

to carry out insurance sub-agency activities

on its behalf without establishing and

maintaining the Sub-agents Company

Register of the company; or to establish and

maintain the Sub-agents Company Register

of the company in accordance with

requirements as may be determined by an

Insurance Intermediaries Directive made for

the purpose of section 29

31(2)

Failure of authorised company to enrol in

the Sub-agents List a person registered by

the company as an insurance sub-agent in

the Sub-agents Company Register of the

company

31(3)

Failure of authorised company to furnish a

person in whose name a certificate of

enrolment is issued with that certificate or

a copy thereof

Third Column

First Column

Second Column

Section

Penalty level

Infringement

Failure of person enrolled in the Sub-agents

31(4)

List of displaying at the place of business

in a part accessible to the public the

certificate of enrolment or a copy thereof

Acting as an insurance sub-agent and

carrying out insurance sub-agency activities

without registration in any Sub-agent

Company Register of a company and

enrolment in the Sub-agents List

33(2)

Failure of company enrolled in the Sub-

agents List carrying out sub-agency

activities from more than one place of

business to carry out those activities from

each place of business by a person who is a

fit and proper person to carry out such

activities

33(4)

Seeking appointment and registration in the

Sub-agents Company Register of an

authorised company in a number of registers

exceeding that provided by section 33(4)

33(5)

Seeking appointment and registration in the

Sub-agents Company Register of more than

one company authorised to carry on long

term business in respect of anyone class of

long term business

Seeking appointment and registration in the

33(6)

Sub-agents Company Register of more than

one company authorised to carry on general

business in respect of anyone class, or any

one group of classes, of general business

Failure of person or company to comply

33(9)

with any condition of enrolment

I

Failure of authorised company striking the

35(1)

name of a person off the Sub-agents

Company Register of the company to notify

the Centre in writing of that striking off or

of the date of effect of that striking off

Third Column

First Column

Second Column

Penalty level

Section

Infringement

35(2)

Failure of authorised company to strike the

name of a person off the Sub-agents

Company Register of the company on

grounds of unfitness and improperness or

because the person concerned has acted

fraudulently, or dishonestly, or in such

manner as to cease to be trustworthy

35(2)

Failure of authorised company to notify the

Centre in writing the reasons for striking

offthat name when the company strikes the

name of a person off the Sub-agents

Company Register of the company on

specified grounds

35(4)(a)

Failure of authorised company to strike the

name of a person off the Sub-agents

Company Register of the company if so

required by the Centre

35(7)

Failure of authorised company to comply

with a directive of the Centre to hasten the

process of striking the name of a person off

the Sub-agents Company Register of the

company if so required by the person

concerned

35(8)

Failure of authorised company to surrender

to the Centre the certificate of enrolment,

or any official copies thereof, issued in the

name of a person whose name has been

struck off the Sub-agents Company Register

of the company

36(b)

Failure of authorised company to strike the

name of a person off the Sub-agents

Company Register of the company if so

required by the Centre

40(3)

Failure of authorised company to open for

public inspection the Sub-agents Company

Register of the company; or to open the

Register for inspection free of charge

First Column

Second Column

Section

Infringement

41(1)

Failure of person to use the word

"insurance" as part of his description or title

or to make any such use on any letter paper,

in any notice or advertisement, or in any

other similar manner without the written

permission of the Centre

41(2)

Failure of enrolled company to add any

explanatory particulars to the company's

name as directed by the Centre

43(3)

Failure of enrolled company to register with

the Centre an underwriting agreement made

or entered into by the company

43(4)

Accepting of business of insurance under

an underwriting agreement by an enrolled

company, unless such underwriting

agreement is duly registered by the enrolled

company with the Centre

Failure of enrolled company to notify the

44(1)

Centre in writing of any material change in

documentation provided, or required to be

provided, by or under any provision of the

Act

Failure of enrolled company to submit in

44(2)

writing to the Centre for the Centre's

approval particulars of any proposed

addition or alteration to the company's

memorandum or articles of association or

other instrument constituting the company

Failure of person to satisfy any requirement

47(1)(c)

of, or obligation determined by, any

provision of any Insurance Intermediaries

Directive made for the purpose of any

section of the Act other than a section

mentioned in this Schedule and the Third

Schedule to the regulations.

Any other infringement against any other provision of the Act or

any rules or regulations made thereunder or any Insurance

Intermediaries Directive not specifically provided for in this

Schedule.

Suppliment tal-Gazzetta tal-Gvern ta' Malta, Nru. 16,957, 13 ta' Gunju, 2000

Taqsima B

INSURANCE BUSINESS (COMPANIES ASSETS AND LIABILITIES)

REGULATIONS, 2000

Arrangement of Regulations

PART I - PRELIMINARY

1. Citation

2. Interpretation

PART II - MAINTENANCE OF ASSETS IN MALTA

3. Maintenance of assets in Malta in the case of companies with head office in

Malta

4. Maintenance of assets in Malta in the case of companies with head office outside

Malta

5. Amount of assets to be maintained in Malta in the case of companies with head

office outside Malta

6. Kind of assets to be maintained in Malta

PART III - MARGINS OF SOLVENCY

7. Interpretation

The penalties specified in the Third Schedule to the Insurance Application of

certain penalties

Business (Penalties for Offences and Infringements) Regulations, 2000 prescribed by the

prescribed by virtue of the Insurance Business Act, 1998 with reference ~;~~:i~~ ~;siness

to sections 29, 30, and 38 of the said Act shall apply with respect to a Offences and

person guilty of the offences against the said sections of the said Act as ~:;:I~~i:~;,tsiooo.

made applicable to him by virtue of paragraph (a) of subsection (1) of

section 47 and section 49 of the Act.

In accordance with the provisions of section 45 of the Act any Appeal to the

Financial Services

person upon whom the Centre has imposed an administrative penalty Tribunal.

in accordance with the provisions of paragraph (2) of regulation 4 of

these regulations may appeal in writing to the Financial Services Tribunal

against the decision of the Centre.

Where a notice imposing an administrative penalty is served Recovery of

administrative

on a person and -

penalties.

(a) such person fails to appeal within such time as an appeal

may be entered, and fails to pay the penalty so imposed; or

(b) appeals within such time to the Financial Services

Tribunal and the appeal is withdrawn or the Tribunal confirms the

penalty in the amount fixed by the Centre or in an amount reduced

by it, and the penalty is not paid within fifteen days from the date

of the withdrawal of the appeal or the date when the Tribunal

confirms the penalty as aforesaid,

then, in every case, the Centre shall be entitled to take civil action to

recover the amount due to it.

Determination of margins of solvency

9. Valuation

Implicit items: future profits

Implicit items: zillmerising

Implicit items: hidden reserves

PART IV - GUARANTEE FUND AND MINIMUM GUARANTEE FUND

13. Interpretation

Amount of the minimum guarantee fund

Valuation

PART V- CURRENCY MATCmNG, LOCALISATION

Matching: general requirement

Matching: property linked benefits

Matching: currency of general business liabilities

Matching: exception for certain liabilities

20. Localisation

Exclusions from regulations 16 to 20

PART VI - CUSTODIAN OF ASSETS

22. Interpretation

Custody of assets maintained in Malta

Persons acting as custodian of assets

Assets deemed to be deposited with and held in custody by custodian

PART VII - DEPOSIT OF ASSETS

26. Interpretation

Making and amount of deposit

Increasing the amount of deposit

Replacing assets of a kind with assets of any other kind

Reducing the amount of assets

Cessation of business

Effect of direction

Producing security in lieu of making of deposit

Making deposit of assets maintained in Malta in accordance with the 1999

Regulations

PART VIII - EQUALISATION RESERVE

TITLE I - PRELIMINARY

35. Application

36. Interpretation

Scope

TITLE II - BUSINESS OTHER THAN CREDIT INSURANCE BUSINESS

38. Application

Equalisation reserve

Business groups

Transfers to and from the equalisation reserve

41.

Transfers of business by authorised insurance company

Transfers of business to authorised insurance company

Transfers from equalisation reserve where net premiums written fall below

specified limits

Accelerated start-up

TITLE III - CREDIT INSURANCE BUSINESS

46. Application

Equalisation reserve

PART IX - VALUATION OF ASSETS

Interpretation

49 Application

Shares in and debts due or to become due from dependants

Valuation of assets and liabilities of dependants for the purpose of regulation 50

Debts and other rights

53. Land

54. Equipment

Securities and beneficial interests in commercial partnerships

Beneficial interests in collective investment schemes

Deferred acquisition costs

Reversionary interests etc.

Derivative contracts

Contracts and assets having the effect of derivative contracts

Assets to be taken into account only to a specified extent

PART X - DETERMINATION OF LIABILITIES

62·

Interpretation

63·

Application

64·

Long term business and general business

65·

Provision for adverse changes

66·

General business liabilities

67·

Long term liabilities

68·

Method of calculation

69·

Avoidance of future valuation strain

70·

Valuation of future premiums

71·

Acquisition expenses

72·

Rates of interest

73·

Rates of mortality and disability

74.

75.

Contracts not to be treated as assets

No credit for profits from voluntary discontinuance

Nature and term of assets

PART XI - MISCELLANEOUS PROVISION

LIST OF SCHEDULES

Long term business solvency margin: first and second calculations

General business solvency margin: first method of calculation

General business solvency margin: second method of calculation

Minimum guarantee fund

Persons acting as custodian of assets

Scheduled classes

Seventh Schedule Methods of calculating the equalisation reserve

Method of calculating the equalisation reserve for credit insurance

business

Value of dependants

Assets to be taken into account only to a specified extent