Undertakings in an Insurance Group)

Suppliment tal-Gazzetta tal-Gvern ta’ Malta, Nru. 17,834,

28 ta’ Ottubru, 2005

Malta Financial Services

Minister of Finance

L.N. 352 of 2005

INSURANCE BUSINESS ACT

(CAP. 403)

Insurance Business (Supplementary Supervision of Insurance

Undertakings in an Insurance Group)

(Amendment) Regulations, 2005

IN exercise of the powers conferred by articles 63 and 64 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>-

The title of these regulations is the Insurance Business Citation and

(Supplementary Supervision of Insurance Undertakings in an Insurance commencement.

Group) (Amendment) Regulations, 2005, and they shall be read and

construed as one with the Insurance Business (Supplementary

Supervision of Insurance Undertakings in an Insurance Group)

Regulations, 2004, hereinafter referred to as “the principal regulations” L.N. 311 of 2004.

.

Regulation 2 of the principal regulations shall be amended as Amends regulation2

of the principal

follows>

regulations.

(a) sub-regulation (1) thereof shall be renumbered as the

whole regulation 2< and

(b) in regulation 2 as renumbered>

(i)

for the definition “insurance holding company”

there shall be substituted the following>

“ “ insurance holding company” means a parent

undertaking, the main business of which is to acquire

and hold participations in subsidiary undertakings, where

those subsidiary undertakings are exclusively or mainly

insurance undertakings, reinsurance undertakings, or

non-EEA insurers, at least one of such subsidiary

undertakings being an insurance undertaking, and which

is not a mixed financial holding company as is assigned

to it in regulation 2 of the Financial Conglomerates

Regulations, 2004<”<

(ii) for the definition “mixed-activity insurance

holding company” there shall be substituted the following>

“ “mixed-activity insurance holding company”

means a parent undertaking, other than an insurance

undertaking, a non EEA insurer, a reinsurance

undertaking, an insurance holding company or a mixed

financial holding company in terms of regulation 2 of

the Financial Conglomerates Regulations, 2004, which

includes at least one insurance undertaking among its

subsidiary undertakings<”<

(iii) for the definition “non-EEA insurer” there shall

be substituted the following>

“ “non-EEA insurer” means an insurer, other than

a pure reinsurer, whose head office is not in an EEA

State<”<

(iv)

for the definition “participating undertaking”

there shall be substituted the following>

“ “ participating undertaking” means an undertaking

which is either a parent undertaking or other undertaking

which holds a participation or an undertaking linked with

another undertaking by a relationship within the meaning of

Article 12(1) of Seventh Council Directive 83#349#EEC of

the 13 th June, 1983 based on the Article 54(3)(g) of the Treaty

on consolidated accounts<”<

(v)

for the definition of “related undertaking” there

shall be substituted the following>

“ “related undertaking” means either a subsidiary

or another undertaking in which a participation is held,

or an undertaking linked with another undertaking by a

relationship within the meaning of Article 12(1) of the

Seventh Council Directive 83#349#EEC of the 13 th June,

1983 based on the Article 54(3)(g) of the Treaty on

consolidated accounts<”< and

(vi) in the definition of “reinsurance undertaking”,

for the words “a non-member-country insurance

undertaking”, there shall be substituted the words “a non-

EEA insurer”.

Sub-regulation (7) of regulation 4 of the principal regulations Amends regulation

4 of the principal

shall be amended as follows>

regulations.

(a) Paragraph (a) thereof shall be substituted by the

following -

“(7) (a) Where a foreign authority wishes to verify

information concerning an undertaking situated in Malta

which is a related insurance undertaking, a subsidiary

undertaking, a parent undertaking or a subsidiary undertaking

of a parent undertaking of the insurer subject to supplementary

supervision, the foreign authority may request the competent

authority to have that verification carried out on its behalf<”<

(b)

paragraph (b) thereof shall be deleted<

(c)

paragraph (c) shall be renumbered as paragraph

(b)<

(d)

in paragraph (b) of as renumbered for the words

“foreign authorities”, there shall be substituted the words

“foreign authority”< and

(e)

immediately after paragraph (b) thereof, there

shall be added the following new paragraph>

“(c) The foreign authority making the request may

participate in the verification when it does not carry out

the verification itself.”.

Regulation 5 of the principal regulations shall be amended Amends

5 of the principal

as follows>

regulations.

(a) in sub-regulation (8) thereof, for the words “with the

requirements of Part X of the Regulations”, there shall be

substituted the words “with the requirements of Part IX of the

Regulations”< and

(b) immediately after sub-regulation (11) thereof, there shall

be added the following new sub-regulation>

“(12) Without prejudice to sub-regulation (3) of

regulation 4, and for the purposes of sub-regulations (1) and

(2) of this regulation, insurers shall have in place adequate

risk management processes and internal control mechanisms,

including sound reporting and accounting procedures, in order

to identify, measure, monitor and control transactions.”.

For regulation 7 of the principal regulations, there shall be

substituted the following>

“Implementation

The purpose of these regulations is to implement

the

provisions

of Directive 98#78#EC of the European

Parliament and of the Council of the 27 th October, 1998, and

Directive 2002#87#EC of the European Parliament and of the

Council of the 16 th December, 2002 on the supplementary

supervision of credit institutions, insurance undertakings and

investment firms in a financial conglomerate and amending

Council Directives 73#239#EEC, 79#267#EEC, 92#49#EEC,

92#96#EEC, 93#6#EEC and 93#222#EEC, and Directives

98#78#EC and 2002#12#EC of the European Parliament and

of the Council, and shall be interpreted and applied

accordingly.”.

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