Insurance Undertakings) Regulations, 2004

Suppliment tal-Gazzetta tal-Gvern ta’ Malta, Nru. 17,574, 30 ta’ April, 2004

L.N. 208 of 2004

INSURANCE BUSINESS ACT

(CAP. 403)

Insurance Business (Reorganisation and Winding Up of

Insurance Undertakings) Regulations, 2004

IN exercise of the powers conferred by article 41(6) of the Insurance

Business Act, the Prime Minister and Minister of Finance, after

consultation with the Malta Financial Services Authority, has made the

following regulations:-

(1) These regulations may be cited as the Insurance Business Citation and

commencement.

(Reorganisation and Winding Up) Regulations, 2004.

(2)

These regulations shall come into force on the 1st May, 2004.

PRELIMINARY

(1) In these regulations, unless the context otherwise requires - Interpretation.

“the Act” means the Insurance Business Act;

“administrator” means a special controller or any person or

body appointed in terms of the Companies Act for the purpose of

administering reorganisation measures by the court or by the foreign

administrative or judicial authorities, as the case may be;

“branch” means any permanent presence of an insurance

undertaking in the territory of a Member State or an EEA State

other than the home State which carries on business of insurance;

“the Companies Act” means the Act promulaged by Act No.

XXV of 1995 and as subsequently amended;

“the competent authority” means the Malta Financial Services

Authority appointed under article 3 of the Act;

“court” means the Civil Court, in its contentious jurisdiction

in its role as the judicial authority competent for the purposes of

the reorganisation measures or winding-up proceedings in terms

of Title II of Part V and Part VI of the Companies Act;

“EEA State” means a State, other than Malta, which is a

contracting party to the agreement on the European Economic Area

signed at Oporto on the 2 nd May 1992 as amended by the Protocol

signed at Brussels on the 17 th March 1993 and as amended from

time to time;

“foreign administrative or judicial authorities” means the

administrative or judicial authorities competent for reorganisation

measures or winding-up proceedings in accordance with the

legislation or procedures of any Member State or EEA State, other

than Malta;

“foreign authority” means a competent authority within the

meaning of article 1(k) of Directive 92/49/EEC or article 1(n) of

Directive 2002/83/EC of a Member State or anEEA State;

“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 1 of Directive 73/239/EEC or article 2 of

Directive 2002/83/EC which has received authorisation under

article 6 or article 4 respectively;

“home Member State” means the Member State or EEA State

in which the head office of the insurance undertaking covering the

commitment or risk is situated;

“host Member State” means the Member State or EEA State

other than the home State in which an insurance undertaking has a

branch;

“insurance claims” means

(a) any amount which is owed by an insurance

undertaking to insured persons, policyholders, beneficiaries

or any injured party having direct right of action against the

insurance undertaking and which arises from an insurance

contract or from any operation provided for in paragraphs (2)

and (3) of article 1, of Directive 79/267/EEC in direct

insurance business, including amounts set aside for the

aforementioned persons, when some elements of the debt are

not known; and

(b) the premiums owed by an insurance undertaking

as a result of the non-conclusion or cancellation of these

insurance contracts and operations in accordance with the law

applicable to such contracts or operations before the opening

of the winding-up proceedings;

“insurance creditor” means a person who has an insurance

claim against a Maltese insurance undertaking;

“liquidator” means –

(a) in Malta, a liquidator appointed under the

Companies Act to a Maltese insurance undertaking and

includes the Official Receiver when acting in the capacity of

liquidator;

(b) in another Member State or EEA State, any person

or body appointed by the foreign administrative or judicial

authorities or by the governing bodies, as appropriate, of an

insurance undertaking authorised in that Member State or EEA

State, for the purposes of administering winding up

proceedings

“Maltese insurance undertaking” means a company whose

head office is in Malta and is authorised under the Act to carry on

business of insurance, but excludes an undertaking whose business

is restricted to reinsurance;

“Member State” means a Member State of the European

Communities;

“reorganisation measures” means measures involving any

intervention by the court under Part VI of the Companies Act or

by the foreign administrative or judicial authorities which are

intended to preserve or restore the financial situation of an insurance

undertaking and which affect pre-existing rights of parties other

than the insurance undertaking itself, including but not limited to

measures involving the possibility of a suspension of payments,

suspension of enforcement measures or reduction of claims;

“winding-up proceedings” means the collective proceedings

involving realising the assets of an insurance undertaking and

distributing the proceeds among the creditors, shareholders or

members as appropriate, which necessarily involve any intervention

by the court or by foreign administrative or the judicial authorities,

including where the collective proceedings are terminated by a

composition or other analogous measure, whether or not they are

founded on insolvency or are voluntary or wound up by the court,

(2) Words and expressions which are also used in the Act

shall, in these regulations, have the same meanings as in the Act.

PART I – REORGANISATION MEASURES

(1) The court shall, upon receipt of an application made in

terms of Part VI of the Companies Act, decide on the reorganisation

measures with respect to a Maltese insurance undertaking, including its

branches established in host Member States

Provided that, reorganisation measures shall not preclude the

dissolution and consequential winding up by the court of the Maltese

insurance undertaking concerned.

(2) Reorganisation measures adopted in respect of an

insurance undertaking, including its branches in other Member States

or EEA States, shall be governed by the Companies Act, as appropriate,

unless otherwise provided by regulations 19 to 28.

(3) The reorganisation measures shall be fully effective in

other Member States or EEA States in accordance with the Companies

Act without any further formalities, including against third parties in

other Member States or EEA States, even if the legislation of those

other Member States or EEA States does not provide for such

reorganisation measures, or alternatively makes their implementation

subject to conditions which are not fulfilled.

(4) The reorganisation measures shall be effective in other

Member States or EEA States once they become effective in Malta.

(5) Nothing in these regulations shall prejudice the powers

of the competent authority in relation to reorganisation measures with

respect to a Maltese insurance undertaking including its branches

established in host Member States, where provided for in the Act.

(1) The court shall, upon receipt of an application for any

reorganisation measure, inform the competent authority regarding this

request in order to obtain its views on the adoption of such measures

and the practical effects which it may have

Provided that where the reorganisation measure involves a company

recovery order in terms of the Companies Act, the provisions of article

329B (3) (d) of the Companies Act shall apply.

(2) Where the court makes a decision, order or appointment of -

(a) any compromise or arrangement in terms of article

327 of the Companies Act, or

(b) a company recovery order and appoints a special

controller in accordance with article 329B,

it shall immediately inform the competent authority, or

cause the competent authority to be informed without delay,

of the decision, order or appointment which has been made.

(3) Where the competent authority is informed of a decision,

order or appointment in accordance with this regulation, it shall, in turn

without delay and by any means available, inform the foreign authority

of the decision to adopt reorganisation measures including the possible

practical effects of such measures on -

(a)

the business of the Maltese insurance undertaking; and

(b) the rights of policyholders under contracts of insurance

and carried out by the Maltese insurance undertaking.

Publication.

(1) Where reorganisation measures are subject to a right of

redress, the administrator or any other person appointed by the court

for this purpose shall make public any decision of the court by

(a) publishing a notice of the decision in the Gazette

and publishing such a decision 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

measure shall be in Maltese in the Maltese daily and in English

in the English daily; and

(b) publishing an extract from the document

establishing the reorganisation measure in the Official Journal

of the European Communities at the earliest opportunity.

(2) The foreign authority which has been informed of a

decision on a reorganisation measure pursuant to regulation 4 of these

regulations may require the publication of such a decision within its

territory in the manner it considers appropriate.

(3) (a) The publication made pursuant to sub-regulations

(1) and (2) of this regulation shall specify

(i)

the name of the court;

(ii) a summary of the terms of the decision,

appointment or order, as the case may be;

(iii) the name of the administrator or any other person

involved in the reorganisation measures, if any; and

(iv) the statutory provisions in accordance with which

the decision, appointment or order has been made.

(b) The information set out in paragraph (a) of this sub-

regulation shall be published in the English and Maltese languages.

(4) The reorganisation measures shall apply regardless of

the provisions concerning publication set out in sub-regulations (1), (2)

and (3) of this regulation and fully effective against creditors, unless

the court provides otherwise.

(5) This regulation is without prejudice to any requirement

to publish information imposed upon the administrator in accordance

with Part VI of the Companies Act.

(6) (a) Where the reorganisation measure affects

exclusively the rights of shareholders, members or employees of a

Maltese insurance undertaking considered in those capacities, this

regulation shall not apply unless the Companies Act provides otherwise.

(b) The court shall determine the manner in which

shareholders, members and employees affected by such

reorganisation measures shall be informed in accordance with the

Companies Act.

(1) Where the Companies Act provides that creditors are to

be informed of their right to lodge a claim or submit observations

concerning their claims, the administrator or any other person appointed

for that purpose shall without delay inform in writing all known creditors,

including creditors who have their normal place of residence, domicile

or head office in another Member State, about the commencement of

reorganisation measures.

(2) Where the court makes a decision, order or appointment of -

(a)

any compromise or arrangement in terms of article 327,

or

(b) a company recovery order and appoints a special

controller in accordance with article 329B,

it shall require all known creditors of the Maltese insurance

undertaking to be individually informed, in writing, that

(i) reorganisation measures have commenced in

relation to a Maltese insurance undertaking;

(ii) the date from which that decision, order or

appointment relating to reorganisation measures of the

Maltese insurance undertaking has effect;

(iii) if applicable, the date by which a creditor must

submit his claim in writing;

(iv)

the matters which must be stated in a creditor’s

claim;

(v) details of any category of debt in relation to which

a claim is not required;(vi)the person to whom any such claim

or any observations on a claim must be submitted; and

(vii) the consequence of any failure to submit a claim

by any specified time limit.

(3) In addition to the matters referred to in the sub-regulation

(2) of this regulation, insurance creditors shall be notified of the

following matters –

(a) the effect which the decision will, or is likely to have

on the kind of contract of insurance under, or in connection with

which that creditor’s insurance claim against the Maltese insurance

undertaking is founded; and

(b) the date from which any variation resulting from the

order or decision to the risks covered by, or the sums recoverable

under, that contract has effect.

(4) For the purposes of this regulation, a creditor is a

“known” creditor where the administrator is aware of, or should

reasonably be aware of –

(a)

his identity.

(b) his claim or potential claim, and

(c) a recent address where he is likely to receive a

communication.

(1) The claims of all creditors of the Maltese insurance Right to lodge

claims.

undertaking having their normal residence, domicile or head office in

another Member State or EEA State shall be treated in the same way

and accorded the same ranking as claims of an equivalent nature which

may be lodged by creditors who have their normal place of residence,

domicile or head office in Malta.

(2) A creditor shall send copies of supporting documents,

if any, and shall indicate -

(a)

the nature of the claim;

(b) the date on which it arose;

(c)

the amount of the claim;

(d) whether he alleges preference, security in rem or

reservation of title in respect of the claim; and

(e)

the assets that are covered by his security.

(1) The information in the notice referred to in regulation 6

of these regulations shall be provided in the Maltese and English

languages.

(2) Where a creditor is notified in accordance with sub-

regulation (2) of regulation 6, the notification must be headed with the

words “Invitation to lodge a claim: time limits to be observed”, and in

the case of submission of observations relating to claims, the notification

must be headed “Invitation to submit observations relating to a claim

time limits to be observed” and such heading must be given in either –

(a) the official language, or one of the official languages,

of the Member States in which that creditor is ordinarily resident;

or

(b) every official language.

(3) Where the known creditor is a holder of an insurance

claim, the information in the notice referred to in regulation 6 of these

regulations shall be provided in the official language or one of the official

languages of the Member State or EEA State in which the insurance

creditor has his or her normal place of residence, domicile or head office.

(4) A creditor who submits a claim or observations relating

to his claim may do so in his domestic language, provided that the

requirements of the following paragraphs are complied with

(a) where creditor submits a claim in his domestic language,

the document must be headed with the words “Lodgement of claim”

(in English);

(b) where a creditor submits observations on his claim

(otherwise than in the document by which he submits his claim),

the observations must be headed with the words “Submission of

observations relating to claims” (in English).

(5) For the purposes of this regulation, “domestic language”

in relation in a creditor means the official language, or one of the official

languages of the Member State or EEA State in which he is ordinarily

resident or, if the creditor is not an individual, the place in which the

creditor’s head office is located.

PART II– WINDING-UP PROCEEDINGS

(1) The court shall, upon receipt of an application made in Adoption of

winding up

terms of the Companies Act, take a decision concerning the dissolution proceedings in

and consequential winding up with respect to a Maltese insurance Malta.

undertaking, including its branches established in any Member State or

EEA State

Provided that, the reorganisation measures shall not preclude the

commencement of winding up proceedings

Provided further, the decision to dissolve and wind-up a Maltese

insurance undertaking may be taken in the absence, or following the

adoption of reorganisation measures.

(2) The court shall, upon receipt of an application for

winding up proceedings, inform the competent authority regarding this

request in order to obtain its views on the adoption of such measures

and the practical effects which they may have.

(3) Where the court makes a decision, order or appointment of -

(a)

a winding up order under article 219 of the Companies

Act; or

(b) the appointment of a provisional administrator under

article 228 of the Companies Act ;it shall immediately inform the

competent authority, or cause the competent authority to be

informed without delay of the decision, order or appointment which

has been made.

(4) Where an arrangement has been concluded pursuant to

article 291 of the Companies Act, any person appointed by the Maltese

insurance undertaking or creditors shall inform the competent authority

of the arrangement which has been approved.

(5) Where a liquidator is appointed as mentioned in article

230 of the Companies Act appointment of liquidator in a creditors’

voluntary winding up) the liquidator shall inform the competent authority

of his appointment.

(6) Without prejudice of article 42 of the Act, where in the

case of a member’s voluntary winding up, a liquidator is appointed as

mentioned in article 272 of the Companies Act, the liquidator must

inform the competent authority that he is of the opinion that the Maltese

insurance undertaking will not be able to pay its debts within the period

stated in the declaration of solvency.

(7) A decision concerning the dissolution and winding up

of a Maltese insurance undertaking including its branches in other

Member States or EEA States shall be recognised in other Member

States without any further formalities, and shall be effective as soon as

the decision is effective in Malta.

(8) Where the competent authority is informed of a decision,

order or appointment in accordance with sub-regulation (3), (4), (5) of

this regulation, the competent authority shall in turn, without delay and

by any means available inform the foreign authority in all Member States

or EEA States -

(a) that a decision, order or appointment has been made and

(b) the possible effect of a decision, order or appointment

of that kind on -

(i)

the business of the Maltese insurance undertaking,

and

(ii) the rights of policyholders under contract of

insurance and carried out by the Maltese insurance

undertaking.

(9) Nothing contained in these regulations shall prejudice

the powers of the competent authority in relation to winding up

proceedings with respect to Maltese insurance undertaking, including

its branches established in host Member States, where provided for in

the Act.

(1) This regulation is subject to the provisions of Applicable law in

the winding up of a

regulations 19 to 28 of these regulations.

Maltese insurance

undertaking.

(2) Without prejudice to the provisions of articles 28, 41

and 42 of the Act, a Maltese insurance undertaking shall dissolve and

consequentially wind up, under and in accordance with the Companies

(3) Where a Maltese insurance undertaking is being wound

up, matters determined in paragraph (a) to (m) of this sub-regulation

are to be determined in accordance with the Companies Act. These

matters are

(a) the assets which form part of the estate of the Maltese

insurance undertaking;

(b) the treatment of assets acquired by, or devolving on, the

Maltese insurance undertaking after the making of a winding up

order;

(c) the respective powers of the Maltese insurance

undertaking and the liquidator;

(d) the conditions under which set-off may be invoked;

(e) the effects of the winding up proceedings on current

contracts to which the affected Maltese insurance undertaking is a

party;

(f) the effects of the winding up proceedings brought by

individual creditors, with the exception of lawsuits pending as

provided for in regulation 28 of these regulations.

(g) the claims which are to be lodged against the estate of

the Maltese insurance undertaking;

(h) the treatment of claims against the Maltese insurance

undertaking arising after the making of the winding up proceedings;

(i)

the rules governing –

(i)

the lodging, verification and admission of claims,

(ii) the distribution of proceeds from the realisation of

assets,

(iii) the ranking of claims,

(iv) the rights of creditors who have obtained partial

satisfaction after the opening of the winding up order by virtue

of a right in rem or through set-off;

(j) the conditions for and the effects of closure of winding

up proceedings, in particular by composition.

(k) the rights of creditors after the closure of the winding

up proceedings;

(l) the person who is to bear the cost and expenses incurred

in the winding up proceedings.

(m) the rules relating to the voidness, violability or

unenforceability of legal acts detrimental to all the creditors

Provided that, in so far as the provisions of this sub-regulation

are inconsistent with the provisions of the Act, the provisions of

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

shall to the extent of the inconsistency, not apply to Maltese

insurance undertakings.

Notwithstanding the provisions of any other law, the assets

of the Maltese insurance undertaking which are prohibited under

subarticle (2) of article 41 of the Act or by virtue of or under any other

provision of the said Act, to be freely disposed of, shall be available

only for meeting the liabilities of the insurance undertaking attributable

to its business

Provided that insurance claims shall rank before any other claim

against such assets.

(2) The Maltese insurance undertaking shall be required to

maintain a register showing the assets representing the technical

provisions in accordance with the Act and the Insurance Business

(Companies Assets and Liabilities) Regulations, 2000. The register shall

be maintained at the head office of the insurance undertaking and shall

contain up-to-date details of the assets representing the technical

provisions.

(3) Where the Maltese insurance undertaking is authorised

to carry on both general business and long term business, it must keep

at its head office separate registers for each type of business

Provided that a Maltese insurance undertaking which is

authorised to carry on long term business and general business restricted

to classes 1 and 2 of Part 1 of the Third Schedule (accident and sickness)

to the Act may keep a single register for the whole of their activities.

(4) The total value of the assets entered in the register valued

in accordance with the Insurance Business (Assets and Liabilities)

Regulations, 2000 shall at no time be less than the value of the technical

provisions.

(5) Where an asset entered in the register is subject to a right

in rem in favour of a creditor or a third party, with the result that part of

the value of the assets is not available for the purposes of covering

commitments, that fact shall be recorded in the register and the amount

not available shall not be included in the total value referred to in sub-

regulation (4) of this regulation.

(6) Where an asset employed to cover technical provisions

is subject to a right in rem in favour of a creditor or a third party, without

meeting the conditions of sub-regulation (5) of this regulation, or where

such an asset is subject to a reservation of title in favour of a creditor or

of a third party or where a creditor has a right to demand the set-off of

this claim against the claim of the insurance undertaking, the treatment

of such assets in case of the winding up of the Maltese insurance

undertaking shall be determined by the Act except where regulations

22, 23 and 24 apply to that asset.

(7) The composition of the assets entered in the register or

registers, as the case may be in accordance with sub-regulations (2) to

(6) of this regulation, at the time when winding up proceedings have

commenced, must not thereafter be changed and no alteration other

than the correction of purely clerical errors shall be made in the registers,

except with the authorisation of the court .

(8) Notwithstanding sub-regulation (7) of this regulation,

the liquidator shall add to the said assets the yield therefrom and the

value of the pure premiums received in respect of the class of business

concerned between the opening of the winding-up proceedings and the

time of payment of the insurance claims or until any transfer of portfolio

is effected.

(9) If the product of the realisation of assets is less than

their estimated value in the register, the liquidators shall be required to

justify this to the court.

Where the rights of insurance creditors have been Subrogation to the

subrogated to Protection and Compensation Fund pursuant to the the Protection

Compensation

Protection and Compensation Fund Regulations, 2003, claims by such Fund.

L.N. 435 of 2003.

Fund shall not benefit from the provisions of regulation 11.

(1) Where winding-up proceedings have commenced in Revocation of the

authorisation.

respect of a Maltese insurance undertaking, the authorisation of the

Maltese insurance undertaking shall be automatically revoked in terms

of paragraph (b) of article 25 of the Act, except to the extent necessary

for the purposes of sub-regulation (2) of this regulation, if the

authorisation has not been previously suspended or revoked.

(2) The revocation of authorisation pursuant to sub-regulation

(1) of this regulation shall not prevent the liquidator or any other person

entrusted by the court from carrying on some of the Maltese insurance

undertaking’s activities in so far as that is necessary or appropriate for

the purposes of winding up

Provided that, such activities shall be carried on with the

consent and under the supervision of the competent authority.

Where -

(a) an arrangement has been entered into between a Maltese

insurance undertaking and its creditors in terms of article 291 of

the Companies Act;

(b) an order appointing an provisional administrator in

accordance with article 228 of the Companies Act;

(c) a winding up order has been made by the court under Title

II of Part V of the Companies Act;or

(d) a liquidator has been appointed in terms of article 230

of the Companies Act,

the relevant officer or any person appointed for that purpose

by the court shall publish an extract from the decision or order to

commence winding-up proceedings in the Gazette by means of

(i) a notice published in the Gazette and 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 proceedings shall be in Maltese in the Maltese

daily and in English in the English daily;

(ii) an extract from the winding up decision published

in the Official Journal of the European Communities.

(2) The foreign authority which has been informed of a

decision to wind up the Maltese insurance undertaking pursuant to sub-

regulation (8) of regulation 9 may ensure the publication of such decision

within their territory in the manner they consider appropriate.

(3) The publication of an extract from the decision to

commence winding up proceedings shall specify

(a)

the name of the court ;

(b) a summary of the terms of the decision, appointment or

order, as the case may be;

(c) the statutory provisions in accordance with which

dissolution and consequential winding-up has commenced;

(d) the name of the liquidator or any other person involved

in the winding-up, if any.

(4) This regulation is without prejudice to any requirement

imposed on the relevant officer under the provisions of Title II of Part

V of the Companies Act.

(5) For the purposes of this regulation “relevant officer”

means and includes-

(a) in the case of a arrangement entered into between the

Maltese insurance undertaking and the creditors, the person

appointed by either the Maltese insurance undertaking or creditors;

(b) in the case of a creditors’ voluntary winding up, the

liquidator;

(c)

in the case of a winding up order, the liquidator; and

(d) in the case if an order appointing a provisional

administrator, the provisional administrator.

(1) Subject to regulation (2) of this regulation, where Information to

known creditors.

the Companies Act provides that creditors are to be informed of their

right to lodge a claim or submit observations concerning their claims,

the liquidator or any other person appointed for this purpose by the

court shall without delay individually inform in writing all known

creditors, including creditors who have their normal place of residence,

domicile or head office in another Member States, about the

commencement of winding-up proceedings.

(2) Where -

(a) a winding-up order is made in terms of article 219 and a

liquidator is appointed, or

(b) an order appointing the provisional administrator is made

in terms of article 228, or

(c) a liquidator is appointed in terms of article 230 of the

Companies Act, or

(d) a decision as a result of an arrangement agreed to between

the company and the creditors, a person is appointed by such

parties,

the persons specified in sub-regulation (1) of this regulation

such persons are to notify all known creditors of the Maltese

insurance undertaking in writing

(i) that winding-up proceedings have commenced in

relation to a Maltese insurance undertaking;

(ii) the date from which that decision to wind up the

Maltese insurance undertaking has effect;

(iii) the date, if applicable, by which a creditor must

submit his claim in writing;

(iv)

the matters which must be stated in a creditor’s

claim;

(v) details of any category of debt in relation to which

a claim is not required;

(vi) the person to whom any such claim or any

observations on a claim must be submitted; and

(vii) the consequence of any failure to submit a claim

by any specified time limit.

(3) In addition to the matters referred to in the sub-regulation

(2) hereof, insurance creditors must be notified of the following matters –

(a) the effect which the decision will, or is likely to

have on the kind of contract of insurance under, or in

connection with which that creditor’s insurance claim against

the Maltese insurance undertaking is founded; and

(b) the date from which any variation resulting from

the order or decision to the risks covered by, or the sums

recoverable under that contract has effect.

(4) For the purposes of this regulation, a creditor is a

“known” creditor if the persons mentioned in sub-regulation (2) of this

regulation are aware of, or should reasonably be aware of –

(a)

his identity;

(b) his claim or potential claim; and

(c) a recent address where he is likely to receive a

communication.

(1) The claims of all creditors having their normal Right

claims.

residence, domicile or head office in another Member State or EEA

State shall be treated in the same way and accorded the same ranking as

claims of an equivalent nature which may be lodged by insurance

creditors who have their normal place of residence, domicile or head

office in Malta.

(2) A creditor shall send copies of supporting documents,

if any, and shall indicate -

(a)

the nature of the claim;

(b) the date on which it arose;

(c)

the amount of the claim; and

(d) whether he alleges preference, security in rem or

reservation of title in respect of the claim; and

(e)

the assets that are covered by his security.

(1) The information in the notice referred to in regulation 15 Submission of

claims by creditors

of these regulations shall be provided in the Maltese and English languages. of Member States

or EEA States.

(2) Where a creditor is notified in accordance with sub-

regulation (2) of regulation 15, the notification must be headed with the

words “Invitation to lodge a claim: time limits to be observed”, and in

the case of submission of observations relating to claims, the notification

must be headed “Invitation to submit observations relating to a claim

time limits to be observed” and such heading must be given in either –

(a) the official language, or one of the official languages,

of the Member States in which that creditor is ordinarily resident;

or

(b) every official language.

(3) Where the known creditor is a holder of an insurance

claim, the information in the notice referred to in regulation 15 of these

regulations shall be provided in the official language or one of the official

languages of the Member State or EEA State in which the insurance

creditor has his or her normal place of residence, domicile or head office.

(4) A creditor who submits a claim or observations relating

to his claim may do so in his domestic language, provided that the

requirements of the following paragraphs are complied with

(a) where a creditor submits a claim in his domestic

language, the document must be headed with the words

“Lodgement of claim” (in English);

(b) where an insurance creditor submits observations on his

claim (otherwise than in the document by which he submits his

claim), the observations must be headed with the words

“Submission of observations relating to claims” (in English).

(5) For the purposes of this regulation, “domestic language”

in relation in a creditor means the official language, or one of the official

languages of the Member State or EEA State in which he is ordinarily

resident or, if the insurance creditor is not an individual, in which the

creditor’s head office is located.

Reports to creditors.

(1) Once every twelve months beginning from the date

when his appointment has effect, a liquidator appointed in terms of

article 219 and article 230 of the Companies Act, the provisional

administrator appointed in terms of article 228 or any other person

appointed for this purpose by the court shall send a written report setting

out the position generally as regards the progress of the winding up to

every known creditor.

(2) The requirement in sub-regulation (1) of this regulation

does not apply where a liquidator or provisional administrator is required

by order of the court to send a report to creditors at intervals which are

more frequent than those required by this regulation.

(3) This regulation is without prejudice to any requirement

to send a report to creditors, imposed by the court on the liquidator or

provisional administrator, which is supplementary to the requirements

of this regulation.

PART III – PROVISIONS COMMON TO REORGANISATION

AND WINDING-UP PROCEEDINGS

(1) The effects of a reorganisation measure or winding up Employment

contracts and

proceedings on European employment contracts and employment relationships.

relationships are to be determined in accordance with the laws of the

home Member State to which that contract or relationship is subject.

(2) In this regulation, an employment contract is a European

employment contract, and an employment relationship is a European

employment relationship if it is subject to the law of a Member State or

EEA State.

The effects of a reorganisation measure or winding up Contracts in

proceedings on a contract conferring the right to make use of or acquire connection

immovable

immovable property situated within the territory of the home Member contracts.

State are to be determined in accordance with the law of that State.

The effects of a reorganisation measure or winding up Registrable rights.

proceedings on a right of the Maltese insurance undertaking with respect

to –

(a)

immovable property;

(b) a ship; or

(c)

an aircraft

which is subject to registration in a public register kept under

the authority of a Member State or EEA State are to be determined

in accordance with the law of that State.

(1) The commencement of reorganisation measures or Third parties rights

in rem.

winding-up proceedings of a Maltese insurance undertaking shall not

affect the rights in rem of creditors or third parties in respect of tangible

or intangible, movable or immovable assets including both specific assets

and collections of indefinite assets as a whole which change from time

to time belonging to the insurance undertaking concerned which are

situated within the territory of a Member State or an EEA State at the

time of the opening of such measures or proceedings.

(2) The rights in rem referred to in sub-regulation (1) of

this regulation shall in particular mean –

(a) the right to dispose of assets or have them disposed of

and to obtain satisfaction from the proceeds of or the income from

those assets, in particular by virtue of a lien, or mortgage;

(b) the exclusive right to have a claim met, in particular a

right guaranteed by a lien in respect of the claim or by assignment

of the claim by way of guarantee;

(c) the right to demand the assets from, and,or to require

restitution by, any person having possession or use of them contrary

to the wishes of the party so entitled;

(d) a right in rem to the beneficial use of assets.

(3) A right, recorded in a public register and enforceable

against third parties, under which a right in rem within the meaning of

sub-regulation (1) of this regulation may be obtained, is also to be treated

as a right in rem for the purposes of this regulation.

(4) Sub-regulation (1) of this regulation does not preclude

actions for voidness, voidability or unenforceability of legal acts

detrimental to creditors referred to in paragraph (m) of sub-regulation

(3) of regulation 10 of these regulations.

(1) The commencement of reorganisation measures or

winding-up proceedings in relation to a Maltese insurance undertaking

purchasing an asset shall not affect the seller’s rights based on a

reservation of title where at the time of the commencement of such

measures or proceedings the asset is situated within the territory of

another Member State or EEA State.

(2) The commencement of reorganisation measures or

winding-up proceedings against a Maltese insurance undertaking selling

an asset, after delivery of the asset, shall not constitute grounds for

rescinding or terminating the sale and shall not prevent the purchaser

from acquiring title where at the time of the opening of such measure or

proceedings the asset sold is situated within the territory of a Member

State or EEA State in which such measures or proceedings were

commenced.

(3) Sub-regulations (1) and (2) of this regulation does not

preclude actions for voidness, voidability or enforceability of legal acts

detrimental to creditors referred to in paragraph (m) of sub-regulation

(3) of regulation 10 of these regulations.

(1) The commencement of reorganisation measures or

winding up proceedings shall not affect the rights of creditors to demand

the set-off of their claims against the claims of the Maltese insurance

undertaking where such a set-off is permitted by the law of the Member

State or EEA State which is applicable to the claim of the Maltese

insurance undertaking.

(2) Sub-regulation (1) of this regulation does not preclude

actions for voidness, voidability or unenforceability of legal acts

detrimental to creditors referred to in paragraph (m) sub-regulation (3)

or regulation 10 of these regulations.

(1) Without prejudice to regulation 22 of these regulations, Regulated markets.

the effects of a reorganisation measure or of winding-up proceedings

on the rights and obligations of the parties to a regulated market operating

in a Member State or EEA State must be determined in accordance

with the law applicable to that market.

(2) Sub-regulation (1) of this regulation does not preclude

actions for voidness, voidability or unenforceability of legal acts

detrimental to creditors referred to in paragraph (m) of sub-regulation

(3) or regulation 10 of these regulations.

(3) For the purposes of this regulation, “regulated market”

has the meaning assigned to it in regulation 48 of the Insurance Business

(Companies and Assets and Liabilities) Regulations, 2000.

(1) Where reorganisation measures and winding up Detrimental acts.

proceedings have been instituted, the rules relating to detrimental

transactions shall not apply where a person who has benefited from a

legal act detrimental to all creditors provides that

(a) the said act is subject to the law of the Member State or

EEA State; and

(b) that law does not allow any means of challenging that

act in the relevant case.

(2)

For the purposes of this regulation “the rules relating

to detrimental transactions” means any provisions of the Companies

Act relating to the voidness, voidability or unenforceability of legal

acts detrimental to all creditors, as referred to in paragraph (m) of sub-

regulation (3) of this regulation.

(1) This regulation applies, where, by an act concluded Protection of third

party purchasers.

after the commencement of a reorganisation measure or winding-up

proceedings, the Maltese insurance undertaking concerned disposes for

a consideration of -

(a) an immovable asset situated within the territory of a

Member State or EEA State;

(b) a ship or an aircraft subject to registration in a public

register kept under the authority of a Member State or EEA State;

(c) securities whose existence or transfer presupposes entry

into a register or account laid down by the law of a Member State

or EEA State or which are placed in a central deposit system

governed by the law of a Member State or EEA State.

(2) The validity of that act shall be determined by the law

of the Member State or EEA State within whose territory the immovable

asset is situated or under whose authority the register, account or system

is kept, as the case may be.

(1) The effects of reorganisation measures or winding-up

proceedings on a pending lawsuit concerning an asset or a right of which

the Maltese insurance undertaking has been divested shall be determined

solely in accordance with the law of the Member State or EEA State in

which the lawsuit is pending.

In order to secure the rights of interested third parties, an

administrator or liquidator may request that a reorganisation measure

or the decision to open winding-up proceedings be registered in the

registry of companies and any other public register by whatever name,

in Malta or any other Member States or EEA State.

(1) In the event of an insurance undertaking being wound

up, liabilities arising from participation in Community co-insurance

contracts shall be met in the same way as those arising under that

undertaking’s other insurance contracts without distinction as to the

nationality of the insured and of the beneficiaries.

(2) For the purpose of this regulation “Community co-

insurance” shall be construed in accordance with article 2 of Directive

78/473/EEC, on the coordination of laws, regulations and administrative

provisions relating to Community co-insurance.

All persons required to receive or divulge information in

connection with the procedures of communication laid down in articles

4,9, and 31 shall be bound by professional secrecy in the same manner

as laid down in Article 16 of Directive 92/49/EEC and article 16 of

Directive 2002/83/EEC.

(1) Where an insurance undertaking has its head office

outside a Member State or EEA State and has branches established in

Malta, both the competent authority, as well as the court shall have

jurisdiction to decide on reorganisation measures and winding up

proceedings in relation to the branch of the insurance undertaking.

(2) The competent authority, the foreign authority, the

foreign administrative or judicial authority, shall endeavour to coordinate

their actions.

(3) The administrators and liquidators involved shall

likewise endeavour to coordinate their actions.

(4) The provisions contained in this regulation are without

prejudice to the provisions of subarticle (3) of article 28 of the Act.

PART IV - REORGANISATION MEASURES AND WINDING

Adoption of

reorganisation

UP PROCEEDINGS IN RESPECT OF EUROPEAN

measures and

INSURANCE UNDERTAKINGS EFFECTIVE IN MALTA

winding up

proceedings of a

European insurance

undertaking.

(1) The commencement of a reorganisation measure or

winding-up proceedings of a European insurance undertaking has effect

in Malta in relation to –

(a)

a branch of a European insurance undertaking;

(b) any property or other assets of the European insurance

undertaking;

(c) any debt or liability of such European insurance

undertaking, as if it were commenced under the Companies Act.

(2) Subject to sub-regulation (4) of this regulation, the

administrator, liquidator, or persons appointed to assist, or where

appropriate, represent administrators and liquidators may exercise in

Malta, in relation to a European insurance undertaking which is subject

to a reorganisation measure or winding-up proceedings, any function

which, pursuant to that measure or order, he is entitled to exercise in

relation to a European insurance undertaking.

(3) The appointment of the administrator and liquidator of

the home Member State shall be evidenced-

(a) by a certified copy of the order or decision by the foreign

administrative or judicial authorities responsible for reorganisation

or winding up in the home Member State by or under which the

administrator or liquidator was appointed; or

(b) by any other certificate issued by the foreign

administrative or judicial authorities which have jurisdiction in

relation to a reorganisation measure or winding-up proceedings,and

accompanied by a certified translation of that order, decision or

certificate, as the case may be.

(4) In exercising the functions of the kind mentioned in sub-

regulation (2) of this regulation, the administrator or the liquidator-

(a) may not take any action which would constitute an

unlawful use of force in Malta;

(b) may not rule on any dispute arising from a matter falling

within Parts I, II and III of these regulations;

(c) notwithstanding the way in which functions may be

exercised in the home Member State, shall act in accordance with

the laws or rules as to procedure which are effective in Malta.

(5) For the purposes of paragraph (c) of sub-regulation (4)

of this regulation “laws or rules as to procedure” means -

(a) requirements as to consultation with or notification of

employees of a European insurance undertaking;

(b) laws and procedures relevant to the realisation of assets; or

(c) where the administrator or liquidator is bringing or

defending legal proceedings in the name and on behalf of a

European insurance undertaking, the relevant rules of court.

(1) From the date of coming into force of these

regulations, a court in Malta, may not, in relation to a European insurance

undertaking or any branch of a European insurance undertaking –

(a) make a winding up order pursuant to article 219 of the

Companies Act;

(b) appoint a provisional administrator in terms of article

228 of the Companies Act;

(c) make a company recovery order in terms of article 329B

of the Companies Act.

(2) Paragraph (a) of sub-regulation (1) of this regulation

does not prevent

(a) the court from making a winding up order after the

relevant date in relation to a European insurance undertaking if-

(i) a provisional administrator was appointed in relation

to the European insurance undertaking before the relevant

date; and

(ii) that appointment continues in force until

immediately before that winding up order is made;

(b) the winding up of a European insurance undertaking

after the relevant date pursuant to a winding up order which was

made, and has not been discharged, before that date.

(3) Paragraph (b) of sub-regulation (1) of this regulation

does not prevent a provisional administrator of a European insurance

undertaking appointed before the relevant date from acting in relation

to such undertaking after that date.

(4) Paragraph (c) of sub-regulation (1) of this regulation

does not prevent a special controller before the relevant date from acting

after that date in a case in which the company recovery order under

which he or his predecessor was appointed remains in force after that

date.

(5) Any arrangement entered into between a company and

its creditors in the course of being wound up, shall not have effect in

relation to a European insurance undertaking if a decision, under article

219 of the Companies Act, with respect to the approval of that

arrangement was taken after the relevant date.

(6) Nothing in these regulations shall affect any proceedings

commenced in any court concerning the reorganisation or winding-up

of a Maltese insurance undertaking where such proceedings were

commenced before the 1 st May, 2004.

(7) In this regulation, the expression “relevant date” means

st

the 1 May 2004.

(1) A court may not make a relevant order under article Proposed

compromise or

327 of the Companies Act in relation to a European insurance arrangement in

undertaking which is subject to reorganisation measures or winding-up relation

insurance

proceedings as defined in article 2(c) and article 2(d) respectively in undertakings and

Directive 2001/17/EC or a branch of a European insurance undertaking their branches.

which is subject to such a measure or proceedings unless the conditions

set out in sub-regulation (2) are satisfied.

(2) These conditions are that –

(a) the person proposing a compromise or arrangement in

terms of article 327 has given -

(i) the administrator or liquidator appointed in relation

to European insurance undertaking in relation to which the

proposal is made; and

(ii) the foreign administrative and judicial authorities,

reasonable notice of the details of that proposal; and

(b) no person notified in accordance with paragraph (a) has

objected to the proposal.

(4) Nothing in this regulation invalidates a compromise or

arrangement which was sanctioned by the court by an order made before

the date of coming into force of these regulations.

(5) For the purposes of sub-regulation (2) hereof, a “relevant

order” means an order sanctioning a compromise or arrangement granted

in terms of article 327 of the Companies Act which -

(a) is intended to enable the insurer, and the whole or any

part of its undertaking, to survive as a going concern and which

affects the rights of persons other than the insurer or its

contributories; or

(b) includes among it purposes a realisation of some or all

of the assets of the European insurance undertaking to which the

order relates and the distribution of the proceeds to creditors, with

a view to terminating the whole or any part of the business of that

insurer.

PART V - MISCELLANEOUS

(1) The purpose of these regulations is to implement the

provisions of Directive 2001/17/EC of the European Parliament and of

the Council of 19 th March, 2001 on the reorganisation and winding-up

of insurance undertakings, and shall be interpreted and applied

accordingly.

(2) In the event that any of these regulations conflict with

the provisions of the Directive, the latter shall prevail.

These regulations shall only apply to reorganisation measures

or winding up proceedings adopted immediately after the date of coming

into force of these regulations.

Mitbug[ fl-Istamperija tal-Gvern — Printed at the Government Printing Press