Regulations, 2005

Suppliment tal-Gazzetta tal-Gvern ta’ Malta, Nru. 17,719, 4 ta’ Frar, 2005

L.N. 35 of 2005

INSURANCE BUSINESS ACT

(CAP. 403)

INSURANCE BROKERS AND OTHER INTERMEDIARIES

ACT

(CAP. 404)

European Passport Rights for Insurance Intermediaries

Regulations, 2005

IN exercise of the powers conferred by article 64 of the Insurance

Business Act and article 3 of the Insurance Brokers and Other

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

consultation with the Malta Financial Services Authority, has made the

following regulations>-

PRELIMINARY

(1) The title of these regulations is the European Passport Citation and

commencement.

Rights for Insurance Intermediaries Regulations, 2005.

(2) These regulations shall be deemed to have come into

force on the 15th January, 2005.

(1)

In these regulations, unless the context otherwise Interpretation.

requires –

“the Commission” means the Commission of the European

Community<

“the competent authority” means the Malta Financial Services

Authority appointed under article 3 of the Insurance Business Act Cap. 403.

and under article 3 of the Insurance Brokers and Other

Intermediaries Act<

“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<

“European insurance intermediary” means any natural or legal

person who, for remuneration, takes up or pursues insurance

mediation or reinsurance mediation, as the case may be, within

the meaning of article 2 of the Insurance Mediation Directive and

which is registered under article 3 of the Insurance Mediation

Directive having its head office or place of residence in a Member

State or an EEA State, other than Malta<

“European right” means the entitlement of an insurance

intermediary 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

or place of residence>

(a) in accordance with the Treaty as applied in a

Member State or an EEA State< and

(b) subject to the requirements of the Insurance

Mediation Directive and subject to any rules or regulations

made under the Insurance Business Act or the Insurance

Brokers and Other Intermediaries Act, or insurance directives

or insurance intermediaries directives issued by the competent

authority pursuant to the said Acts, implementing such

requirements<

“foreign authority” means the body or bodies designated by

a Member State or EEA State>

(a) to act as a supervisory authority in relation to the

European insurance intermediary concerned in that Member

State or EEA State within the meaning of the Insurance

Mediation Directive< or

(b) to carry out the duties provided for in the Insurance

Mediation Directive in relation to a Maltese insurance

intermediary exercising or proposing to exercise a European

right<

“home Member State” means

(a) where the intermediary is a natural person, the

Member State in which his residence is situated and in which

he carries on business<

(b) where the intermediary is a legal person, the

Member State in which its registered office is situated or, if

under its national law it has no registered office, the Member

State in which its head office is situated<

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

in which an insurance or reinsurance intermediary has a branch or

provides services<

“insurance directive” means a directive in respect of the

business of insurance issued by the competent authority in terms

of article 4(3) of the Insurance Business Act<

“insurance intermediaries directive” means a directive in

respect of the insurance intermediaries activities issued by the

competent authority in terms of article 4(2) of the Insurance Brokers

and Other Intermediaries Act<

“insurance mediation” shall have the same meaning as is

assigned by article 2 of the Insurance Mediation Directive.

“Insurance Mediation Directive” means Directive 2002#92#EC

of the European Parliament and of the Council of 9 December

2002 on insurance mediation<

“Maltese insurance intermediary”, means an insurance

intermediary authorised, registered or enrolled in terms of the

Insurance Business Act or the Insurance Brokers and Other

Intermediaries Act, as the case may be, entitled to carry on

insurance mediation or reinsurance mediation in a Member State

or EEA State, other than Malta in exercise of a European right<

“Maltese rules” means rules-

(a) made in accordance with the Insurance Mediation

Directive< and

(b) which are the responsibility of the competent

authority (as to implementation, supervision and compliance)

in accordance with the Insurance Mediation Directive and

subject to the provisions of the Insurance Business Act and

Insurance Brokers and Other Intermediaries Act and any rules,

regulations and insurance directives or insurance

intermediaries directive made thereunder<

“Member State” means a member state of the European

Community<

“supervisory authority” means the foreign authority in a

Member State or EEA State<

“Treaty” means Treaty of Rome signed in 1957, establishing

the European Economic Community and as subsequently amended<

“Tribunal” means the Financial Services Tribunal referred to

in article 57 of the Insurance Business Act and in article 45 of the

Insurance Brokers and Other Intermediaries Act.

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

Insurance Business Act and the Insurance Brokers and Other

Intermediaries Act shall, in these regulations, have the same meanings

as in the said Acts.

PART I - EXERCISE OF PASSPORT RIGHTS BY

EUROPEAN INSURANCE INTERMEDIARIES

(1) A European insurance intermediary which is seeking to

establish a branch in Malta in exercise of a European right shall satisfy

the establishment conditions specified in sub-regulation (2) of this

regulation and shall be exempt from the provisions of article 13 of the

Insurance Business Act or articles 13 and 33 of the Insurance Brokers

and Other Intermediaries Act, as the case may be.

(2) The establishment conditions for the purposes of this

regulation are that -

(a) the European insurance intermediary has given the

supervisory authority in its home Member State a notice of intention

to establish a branch in Malta<

(b) the competent authority has received from the

supervisory authority of such European insurance intermediary a

consent notice stating that it has given its consent to the insurance

intermediary to establish a branch in Malta<

(c) the consent notice shall include such information as may

be established by means of an insurance directive or an insurance

intermediaries directive<

(d) the supervisory authority has informed the European

insurance intermediary that the consent notice has been sent to the

competent authority<

(e) one month has elapsed beginning from the date on which

the supervisory authority informed the European insurance

intermediary that a consent notice has been sent to the competent

authority< and

(f) details of any insurance guarantee scheme, if applicable,

which is intended to protect the branch’s policyholders.

(3) Where the competent authority has received such a

notice from the foreign authority and has been informed of the intention

of the European insurance intermediary to establish a branch in Malta,

it shall, notify the insurance intermediary of the applicable provisions,

if any.

(4) A European insurance intermediary may, in exercise of

a European right, only market in Malta insurance products of the

European insurance undertaking which the intermediary represents

through a branch in Malta, if the European insurance undertaking has

exercised its European right in Malta in terms of the European Passport

Rights for Insurance Undertakings Regulations, 2004 to carry on L.N. 89 of 2004.

business of insurance in the class or classes of long term business or

class or classes or part classes of general business through the

establishment of a branch.

(5) For the purpose of this regulation, “applicable

provisions” means the Maltese rules in accordance with which the

European insurance intermediary is required to comply when carrying

on insurance mediation or reinsurance mediation, identified in the

consent notice, through a branch in Malta.

(1) A European insurance intermediary which is seeking to Exercise of

passport rights

provide services in Malta in exercise of a European right shall satisfy by European

the service conditions specified in sub-regulation (2) of this regulation insurance

intermediaries -

and shall be exempt from the provisions of article 13 of the Insurance services.

Business Act and articles 13 and 33 of the Insurance Brokers and Other

Intermediaries Act.

(2) The service conditions for the purposes of this regulation

are that -

(a) the European insurance intermediary has given the

supervisory authority in its home Member State a notice of intention

to provide services in Malta<

(b) the competent authority has received from the

supervisory authority of such European insurance intermediary a

notice of intention stating that it has given its consent to the

insurance intermediary to provide services in Malta<

(c) the notice of intention shall include such information as

may be established by means of an insurance directive or an

insurance intermediaries directive<

(d) the supervisory authority has informed the European

insurance intermediary that the notice of intention has been sent to

the competent authority< and

(e) one month has elapsed beginning with the date on which

the supervisory authority informed the insurance intermediary that

a notice of intention has been sent to the competent authority.

(3) When the competent authority has received such a notice

from the foreign authority and has been informed of the intention of the

insurance intermediary to provide services in Malta, it shall, notify the

insurance intermediary concerned of the applicable provisions, if any.

(4) A European insurance intermediary may, in exercise of

a European right, only market in Malta insurance products of the

European insurance undertaking which the intermediary represents when

providing services in Malta, if the European insurance undertaking has

exercised its European right in terms of the European Passport Rights

for Insurance Undertakings Regulations, 2004 to carry on business of

insurance in the class or classes of long term business or class or classes

or part classes of general business by way of freedom of establishment

or freedom to provide services.

(5) For the purposes of this regulation, “applicable

provisions” means the Maltese rules in accordance with which the

European insurance intermediary is required to comply when providing

services in Malta.

(1) The competent authority may, for statistical purposes,

require an insurance intermediary which has established a branch in

Malta in terms of these regulations, to report periodically on its activities

in Malta.

(2) In discharging its responsibilities under these

regulations, the competent authority may require such insurance

intermediary to provide the same information as Maltese insurance

intermediaries would be required to provide for that purpose.

(3) The competent authority may require such insurance

intermediary carrying on insurance mediation or reinsurance mediation

in Malta, to provide the information necessary for the monitoring of its

compliance with the standards set by the competent authority to the

extent permitted by the Insurance Mediation Directive.

(1) Where a European insurance intermediary carries on On-site

verifications.

insurance intermediaries activities in Malta pursuant to the Insurance

Mediation Directive through a branch in exercise of a European right,

its supervisory authority may, after having first informed the competent

authority, carry out itself or through a person it appoints for that purpose,

on-site verification of the information necessary to ensure the financial

supervision of the European insurance intermediary. The competent

authority may participate in that verification.

(2) The foreign authority may also request the competent

authority to have such on-site verification carried out on its behalf.

(3) This regulation shall not affect the right of the competent

authority, in discharging its responsibilities under the Insurance

Mediation Directive, to carry out on-site verifications of branches

established in Malta.

PART II - EXERCISE OF PASSPORT RIGHTS BY MALTESE

INSURANCE INTERMEDIARIES

(1) Without prejudice to the provisions contained in the Exercise of

passport rights

Insurance Business Act and the Insurance Brokers and Other by Maltese

Intermediaries Act, a Maltese insurance intermediary may exercise a insurance

intermediaries -

European right to establish a branch if it satisfies the requirements set establishment.

out in the following provisions of this regulation.

(2) A Maltese insurance intermediary intending to establish

a branch in exercise of a European right shall give the competent

authority a notice of intention which shall contain -

(a) the Member State or EEA State within the territory of

which the Maltese insurance intermediary proposes to establish a

branch<

(b) a scheme of operations setting out, inter alia, the

activities of insurance mediation or reinsurance mediation it intends

to carry on and the structural organisation of the branch<

(c) the address of the proposed branch from where

documents may be obtained and to which they may be delivered<

(d) the name of the branch’s general representative who

must possess sufficient powers to bind the Maltese insurance

intermediary in relation to third parties and to represent it in

relations with the authorities and courts of the host member state<

(e) such other information as may be specified by means of

an insurance directive or an insurance intermediaries directive.

(3) Without prejudice to sub-regulations (5) and (7) of this

regulation, if the Member State or EEA State in which the Maltese

insurance intermediary intends to establish a branch has notified the

Commission, in accordance with Article 6(2) of the Insurance Mediation

Directive, of its wish to be informed of the intention of any Maltese

insurance intermediary to establish a branch in its territory, the competent

authority shall give a consent notice to the foreign authority within one

month of receiving a complete notice of intention.

(4) The consent notice shall>–

(a) be given in accordance with the Insurance Mediation

Directive<

(b) confirm that the Maltese insurance intermediary is

authorised, registered or enrolled to carry on insurance mediation

or reinsurance mediation which the branch proposes to carry on<

(c) contain the information stated in the notice of intention

of the Maltese insurance intermediary< and

(d) include such other information as may be established

by means of an insurance directive or insurance intermediaries

directive.

(5) Unless the competent authority has reason to doubt the

adequacy of the administrative structure, the financial situation of the

Maltese insurance intermediary or the good repute and professional

qualification or experience of the directors or managers, taking into

account the business planned, it shall, within one month of receiving all

the information referred in sub-regulation (2) of this regulation,

communicate that information to the foreign authority of the branch

and shall inform the insurance intermediary concerned accordingly>

Provided that, in the event of any change in any of the

particulars referred to in this sub-regulation, the competent authority

shall inform the foreign authority accordingly.

(6) A Maltese insurance intermediary shall not establish a

branch in a Member State or EEA State until one month has elapsed

beginning from the date when the insurance intermediary concerned

received notice in accordance with sub-regulation (5), that the competent

authority has given a consent notice>

Provided that, the Maltese insurance intermediary may

commence business immediately after it provides the competent

authority with a complete notice of intention in accordance with sub-

regulation (2) of this regulation if the host Member State does not wish

to be informed of the fact.

(7) Where the competent authority refuses to communicate

the information referred to in sub-regulation (2) of this regulation to the

foreign authority of the branch, it shall give the reasons for its refusal to

the Maltese insurance intermediary concerned within one month of

receiving all the information in question. The refusal or failure to act in

the period stipulated shall be subject to a right of appeal to the Tribunal

and the provisions of article 57 of the Insurance Business Act and article

45 of the Insurance Brokers and Other Intermediaries Act shall apply

mutatis mutandis.

(8) The foreign authority of the branch of a Maltese

insurance intermediary exercising a European right may inform the

competent authority, if appropriate, of the applicable provisions under

which that business must be carried on in the host Member State.

(9) In the event of a change in any of the particulars

communicated in accordance with sub-regulation (2) of this regulation,

the Maltese insurance intermediary shall give written notice of the

change to the competent authority at least one month before

implementing the change.

(10) Where the Member State or EEA State in which the

Maltese insurance intermediary intends to establish a branch has notified

the Commission in accordance with article 6(2) of the Insurance

Mediation Directive that it does not wish to be informed of the intention

of the insurance intermediary to establish a branch in its territory, sub-

regulations (3) and (4) shall not apply.

(11) For the purposes of this regulation, “applicable

provisions” means the host state rules with which the Maltese insurance

intermediary is required to comply when conducting business through

the proposed branch in the host Member State concerned.

(1) A Maltese insurance intermediary which intends to

provide services for the first time in one or more Member States or

EEA States in exercise of a European right shall first submit a notice of

intention to the competent authority indicating>

(a) the nature of the services it intends to provide or

undertake<

(b) the Member State or EEA State in which it intends to

operate< and

(c) such other information as may be specified in an

insurance directive or insurance intermediaries directive.

(2) If the Member State or EEA State in which the insurance

intermediary intends to provide services has notified the Commission,

in accordance with article 6(2) of the Insurance Mediation Directive, of

its wish to be informed of the intention of any Maltese insurance

intermediary to provide services in its territory -

(a) the competent authority shall within one month of

receiving the notice of intention, send a copy of it to the foreign

authority<

(b) the competent authority, when it sends the copy in

accordance with paragraph (a), shall give written notice to the

insurance intermediary that it has done so< and

(c) the insurance intermediary shall not provide the services

to which its notice of intention relates until one month, beginning

with the date on which it receives the notice under paragraph (b)

has lapsed>

Provided that, where appropriate, the foreign authority may, on

receipt of the notice of intention from the competent authority, indicate

to the Maltese insurance intermediary the conditions with which, in the

interest of the general good, the insurance intermediary concerned shall

comply in the host Member State.

(3) In the event of a change in any of the particulars provided

by the Maltese insurance intermediary in the notice of intention, the

Maltese insurance intermediary shall give written notice of that change

to the competent authority and the foreign authority at least one month

before implementing such change.

(4) Where the competent authority refuses to communicate

the information referred to in sub-regulation (2) of this regulation to the

foreign authority of the provision of services, it shall, give the reasons

for its refusal to the Maltese insurance intermediary concerned within

one month of receiving all the information in question. The refusal or

failure to act in the period stipulated shall be subject to a right of appeal

to the Tribunal and the provisions of article 57 of the Insurance Business

Act and article 45 of the Insurance Brokers and Other Intermediaries

Act shall apply mutatis mutandis.

PART III - EUROPEAN INSURANCE INTERMEDIARIES

NOT COMPLYING WITH LEGAL PROVISIONS

(1) Where the competent authority ascertains that a European Contravention by

insurance intermediary which has established a branch in Malta or European

insurance

provides services in Malta has failed to comply with any of the provisions intermediaries.

of these regulations, any applicable provisions or any insurance directive

or insurance intermediaries directive issued pursuant to these regulations,

it shall, in writing, require the insurance intermediary concerned to

remedy and rectify its position.

(2) If the European insurance intermediary concerned fails

to take necessary steps to remedy and rectify its position, the competent

authority shall inform the foreign authority of such failure. The foreign

authority shall, at the earliest opportunity, take all appropriate measures

to ensure that the European insurance intermediary concerned rectifies

its position. The nature of those measures shall be communicated to the

competent authority.

(3) If, despite the actions taken by the foreign authority, or

because those measures prove inadequate or are not available in Malta,

the European insurance intermediary persists in violating the legal or

regulatory provisions referred to in sub-regulation (1) of this regulation

in force in Malta, the competent authority may, after informing the

foreign authority, take appropriate measures to prevent or penalise

further irregularities, including, in so far as is strictly necessary, to

prevent that European insurance intermediary concerned from

continuing to carry on insurance intermediaries activities in Malta.

(4) Any measure adopted pursuant to this regulation shall

be communicated to the European insurance intermediary concerned in

writing, together with reasons justifying such measures and shall be

subject to a right of appeal to the Tribunal and the provisions of article

57 of the Insurance Business Act and of 45 of the Insurance Brokers

and Other Intermediaries Act shall apply mutatis mutandis.

(5) Notwithstanding the provisions of this regulation, the

competent authority may, in exceptional circumstances, take any

precautionary measures necessary to protect the interests of insureds,

policyholders, creditors and other interested persons. The competent

authority shall inform the Commission and the foreign authority

concerned of such measures at the earliest opportunity.

(6) Where a European insurance intermediary which is in

breach of any provisions of these regulations has an establishment or

possesses property of any description in Malta, the competent authority

may, in accordance with national law, impose an administrative penalty

pursuant to article 67 of the Insurance Business Act or article 47 of the

Insurance Brokers and Other Intermediaries Act.

(7) Where the competent authority is informed by the

foreign authority of another Member State or EEA State of the removal

from the register of the registration of a European insurance intermediary

carrying on insurance mediation activities in Malta in exercise of a

European right, it shall take appropriate measures to prevent the

intermediary concerned from continuing to carry on insurance mediation

or reinsurance mediation in Malta under either the right of establishment

or the freedom to provide services and may make or issue public

statements or notices in relation to these measures.

(8) A prohibition under this regulation may be –

(a)

absolute< or

(b) limited, that is, imposed for a specified event or until

specified conditions are complied with,

and any period, event or conditions specified in the case of a limited

prohibition may be varied by the competent authority and any such

notice shall take effect on such date as is specified in the notice.

PART IV – MISCELLANEOUS

The competent authority shall establish and maintain a

register indicating each Member State in which the Maltese insurance

intermediary-

(a)

has established a branch< or

(b) is providing services.

PART V- INTERPRETATION

The purpose of these regulations is to implement in part the

provisions of Directive 2002#92#EC of the European Parliament and of

the Council of 9 December 2002 on insurance mediation which shall be

interpreted and applied accordingly.

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