Notice) (Amendment) Regulations, 2006

L.N. 321 of 2006

INSURANCE BUSINESS ACT

(CAP. 403)

Insurance Business (Long Term Business Contract Statutory

Notice) (Amendment) Regulations, 2006

IN exercise of the powers conferred by articles 44 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>–

(1) The title of these regulations is the Insurance Business

(Long Term Business Contract Statutory Notice) (Amendment)

Regulations, 2006, and shall be read and construed as one with the

Insurance Business (Long Term Business Contract Statutory Notice)

Regulations, 2000, hereinafter referred to as “the principal regulations”.

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

January, 2007.

Regulation 2 of the principal regulations shall be amended as

follows>

(a) immediately after the definition “the Authority”, there

shall be added the following new definition>

“linked long term contract of insurance” means a contract

of insurance falling within the meaning of class III of the

Second Schedule to the Act<”<

(b) in the definition “long term business contract”, for the

words “long term business class, other than class III, linked long

term,” there shall be substituted the words “long term business

class”.

Regulation 3 of the principal regulations shall be amended as

follows>

(a) subregulation (2) thereof shall be substituted by the

following>

“(2) A statutory notice is a notice which>

(a) in relation to long term business contracts,

other than linked long term contracts of insurance,

contains such matters (and no others) and is in the form

set out in the First Schedule and complies with the

requirements specified in the following subregulations<

(b) in relation to linked long term contracts of

insurance, contains such matters (and no others) and is

in the form set out in the Second Schedule and complies

with the requirements specified in the following

subregulations< and

(c) in each case, has annexed to it a form of notice

of cancellation as set out in the Third Schedule.”<

(b) in subregulation (4) thereof, for the words “set out in

the First Schedule (and, in so far as it relates to the notice of

cancellation, that set out in the Second Schedule)” there shall be

substituted the words “set out in the First or Second Schedule, as

the case may be, (and, in so far as it relates to the notice of

cancellation, that set out in the Third Schedule)”< and

(c) in subregulation (5) thereof, for the words “set out in

the said First Schedule” there shall be substituted the words “set

out in the First or Second Schedule”.

Regulation 4 of the principal regulations shall be amended as Amends

regulation 4

of the principal

regulations.

(a) in subregulation (4) thereof, immediately after the words

“shall operate so as to cancel the contract” there shall be added the

words “as if that contract was never issued or signed by the

insurer.”<

(b) in subregulation (5) thereof>

(i) in paragraph (b) therein, for the words “shall be

refunded by such person to the insurer.”, there shall be

substituted the words “shall be refunded by such person to

the insurer<”<

(ii) immediately after paragraph (b) therein, there shall

be added the following new paragraph>

“(c) any adverse market movement in the value

of the property represented by a linked long term contract

of insurance shall be borne by the party serving the notice

of cancellation.”.

Immediately after subregulation (4) of regulation 5 of the

principal regulations, there shall be added the following subregulation>

“(5) In the event that the insurer alleges that the right of

cancellation has not been exercised by the party within the periods

established by these regulations, the burden of proof shall lie with

the insurer.”.

In paragraph 1 of the First Schedule to the principal regulations,

for the words “entered into#is being entered into” there shall be

substituted the words “entered into”<

(1) The Second Schedule to the principal regulations shall

be renumbered as the Third Schedule.

(2) Immediately after the First Schedule to the principal

regulations, there shall be inserted the following new Second Schedule>

“SECOND SCHEDULE

(Regulation 3)

LINKED LONG TERM CONTRACTS OF INSURANCE -

STATUTORY NOTICE

To>.............................................................................................

(Insert name and address of the person to whom this Notice is

sent)

IMPORTANT - READ THIS NOTICE CAREFULLY

YOUR RIGHT TO CHANGE YOUR MIND

(Identify the contract to which the notice relates or state how it

may be identified, e.g. by reference to an accompanying contract note)

1. You have entered into a Linked Long Term Contract of

Insurance with

(name and address of the insurer with whom the contract has been

entered into)

2. The purpose of this Statutory Notice is to ensure that you are

aware that you have a legal right to reconsider the matter and to change

your mind if you wish.

Points to consider

3. Before you decide whether you want to change your mind,

ask yourself>

* If you received personal advice on your investment or policy of

insurance, are you clear whether that advice was given by an independent

person working on your behalf or by someone representing the insurer^

* Have you received all the information you want in order to

understand your investment or policy of insurance^

* Are you satisfied that the investment or policy of insurance is

suitable for your needs^

* Do you, for example>

- understand how much you will pay now and in future^

- understand what benefits will be paid under the policy - either

at the end of the policy term or if you die before the end of the policy

term^

Do you also understand to what extent the benefits are guaranteed

and to what extent they depend on how well the investment or policy of

insurance performs^

- understand that if you stop the policy in the early years you could

lose money^

- understand the effect that any expenses or charges will have on

your investment or policy of insurance^

If the answer to any of these questions is NO, you should consult

your adviser or the insurer as quickly as possible. There is no extension

to the cancellation period if you ask for further information or if the

reply is delayed.

Your right to withdraw from the transaction

4. The law gives you 30 days beginning from the day on which

you are served with this notice, to consider the matter again and, if you

so wish, to withdraw from the transaction.

5. If you wish to go ahead with the transaction you should do

nothing with the attached notice of cancellation. But if you wish to

withdraw and to have back the money you have paid to the insurer or to

his representative in connection with the contract, you should serve

notice of cancellation (either on the form attached to this notice or

otherwise in writing to the same effect) to the insurer whose particulars

are given in paragraph 1 of this notice within the period of 30 days>

Provided that you will have to repay any amounts already paid to

you by the insurer or his representative under the contract, and any

adverse market movement in the value of the property represented by

the contract shall be at your risk.

Acknowledgment

6. You are asked to acknowledge receipt of this notice by signing

the sub-joined form hereunder.

(Signed)

(Name in block capitals)

(Office)

MAKE SURE THAT YOU KEEP THIS NOTICE AND THAT

YOU ONLY RETURN A COPY THEREOF, DULY SIGNED AND

DATED, TO THE PERSON WHO HAS SERVED IT ON YOU.

RECEIPT

I, the undersigned, hereby declare that I have been served with a

Statutory Notice relating to the linked long term contact of insurance,

of which the above is a copy.

(Signed)

(Name in block capitals)

(Date)”.

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