Management) (Amendment) Regulations, 2007

Suppliment tal-Gazzetta tal-Gvern ta’ Malta, Nru. 18,046, 8 ta’ Marzu, 2007

L.N. 41 of 2007

INSURANCE BUSINESS ACT

(CAP. 403)

Insurance Business (Criteria of Sound and Prudent

Management) (Amendment) Regulations, 2007

IN exercise of the powers conferred by article 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 Citation.

(Criteria of Sound and Prudent Management) (Amendment) Regulations,

2007, and shall be read and construed as one with the Insurance Business

(Criteria of Sound and Prudent Management) Regulations, 1999, L.N. 158 of 1999.

hereinafter referred to as “the principal regulations”.

(2) These regulations shall come into force on the 15 th

March, 2007.

For subregulation (1) of regulation 3 of the principal Amends regulation

3 of the principal

regulations there shall be substituted the following>–

regulations.

“(1) The Authority shall not issue an authorisation under

the Act to any applicant to carry on the business of insurance, nor

shall the Authority permit such applicant to hold an authorisation

issued thereunder if it appears to it that the criteria of sound and

prudent management are not or will not be fulfilled with respect to

the applicant.”.

The Schedule to the principal regulations shall be amended as Amends the

Schedule to the

follows>

principal

regulations.

(a) for paragraph 1 thereof, there shall be substituted the

following>

“1. (1) The business of the company is carried on

with integrity, due care, diligence and the professional skills

appropriate to the nature and scale of its activities.

(2) Each director, controller or officer of the

company is fit and proper to hold that position.

(3) In the case of a company whose head office

is in a country outside Malta>

(a) the representative referred to in article

11(1)(d)(i) of the Act< or

(b) where the representative is not an individual,

the individual representative referred to in article 12(1)(d)

of the Act,

is in each case, a fit and proper person to hold that position.”<

(b) paragraph 3 thereof, shall be amended as follows>

(i) in indent (a) of subparagraph (2) thereof, for the

words “and other records of its business” there shall be

substituted the words “and orderly records of its business and

internal organisation”<

(ii) in subparagraph (3) thereof, for the words

“regarded as adequate” there shall be substituted the words

“regarded as adequate and orderly”<

(iii) for subparagraph (5) thereof, there shall be

substituted the following>

“(5) The company shall not be regarded as

conducting its business in a sound and prudent manner

if -

(a) it fails to conduct its business with due

regard to the interests of policyholders and potential

policyholders<

(b) it fails to satisfy an obligation to which

it is subject by virtue of the Act<

(c) in the case of a company whose head

office is in Malta carrying on business of insurance

in or from a country outside Malta, it fails to satisfy

an obligation to which it is subject by virtue of any

provision of the law of that country which applies

to its business of insurance in that country<

(d) it fails to supervise the activities of a

subsidiary undertaking or branch>

(i) with due care and diligence< and

(ii) without detriment to the company’s

business<

(e) it fails to supervise the activities of any

of its tied insurance intermediaries<

(f) it fails to set controls and monitor on an

ongoing basis all outsourced services< and

(g) it fails to operate compliance

arrangements that are robust and reliable, including

safeguards against participating in or being used

by others as a vehicle for financial crimes.”< and

(c) for subparagraph (6) thereof, there shall be substituted

the following>

“(6) For the purpose of this Schedule “subsidiary

undertaking” shall be construed in accordance with article 2

of the Companies Act, 1995.”.

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

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