Insurance) (Amendment) Regulations, 2007

Suppliment tal-Gazzetta tal-Gvern ta’ Malta, Nru. 18,162, 14 ta’ Diçembru, 2007

L.N. 412 of 2007

COMPANIES ACT

(CAP. 386)

Companies Act (Cell Companies Carrying on Business of

Insurance) (Amendment) Regulations, 2007

IN exercise of the powers conferred by article 84A of the

Companies 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 Companies Act (Cell Citation.

Companies Carrying on Business of Insurance) (Amendment)

Regulations, 2007, and they shall be read and construed as one with the

Companies Act (Cell Companies Carrying on Business of Insurance)

Regulations, 2004, hereinafter referred to as “the principal regulations”. L.N. 218 of 2004.

Regulation 2 of the principal regulations shall be amended as Amends

regulation

follows>

2 of the

principal

regulations.

(a) in the definition “business of insurance”, for the words

“the business of insurance manager, as well as the business of

insurance broking under the Insurance Brokers and Other

Intermediaries Act<”, there shall be substituted the words “the Cap. 404.

business of an insurance manager and the business of insurance Cap. 487.

broking under the Insurance Intermediaries Act<”<

(b) for the definition “competent authority”, there shall be

substituted the following>

“ “competent authority” means the body appointed under Cap. 403.

article 3 of the Insurance Business Act<”<

(c) for the definition “insurance directive”, there shall be

substituted the following>

“ “insurance rule” has the same meaning as is assigned

to it by article 2 of the Insurance Business Act<”.

In the proviso to sub-regulation (2) of regulation 3 of the

principal regulations, for the words “Insurance Brokers and Other

Intermediaries Act”, wherever they appear, there shall be substituted

the words “Insurance Intermediaries Act”.

Regulation 5 of the principal regulations shall be amended as

follows>

(a) in sub-regulation (1) thereof, for the words “and

authorised in terms of article 13 of the said Act to carry on business

of insurance manager, or a company enrolled in the Brokers List

in terms of the Insurance Brokers and Other Intermediaries Act”,

there shall be substituted the words “or a company enrolled in the

Managers List or Brokers List in terms of the Insurance

Intermediaries Act”< and

(b) in sub-regulation (3) thereof, for the words “by an

insurance directive”, there shall be substituted the words “by an

insurance rule”.

Regulation 12 of the principal regulations shall be amended

as follows>

(a) in sub-regulation (2) thereof, the words “(except in so

far as the same is expressly excluded in writing)” shall be deleted<

and

(b) in sub-regulation (6) thereof, for the words “or non-

cellular assets of a cell company wherever situated”, there shall be

substituted the words “or non-cellular assets of a cell company

wherever such assets are situated”.

Regulation 14 of the principal regulations shall be amended

as follows>

(a) in sub-regulation (1) thereof, for the words “Where any

liability arises which is attributable to a particular cell of a cell

company-”, there shall be substituted the words “Subject to the

provisions of regulation 14A, where any liability arises which is

attributable to a particular cell of a cell company -”< and

(b) in sub-regulation (4) thereof, for the words “or non-

cellular assets of the company wherever situated”, there shall be

substituted the words “or non-cellular assets of the company

wherever such assets are situated”.

Immediately after regulation 14, there shall be added the Adds

regulation 14A in

following new regulation 14A>

the principal

regulations.

(1) Notwithstanding the provisions of

cells carrying

regulation 14, where a cell exclusively carries on business of

exclusively affiliated insurance or business of reinsurance and provided

that it is specifically permitted by the memorandum and

articles of association of the cell company, the company may,

reinsurance. by specific written agreement to that effect, provide that only

the cellular assets of that cell may be utilised to satisfy the

cellular liability of such cell>

Provided that, where the business of the cell in question

relates to compulsory insurance, the cell company shall be

obliged to establish to the satisfaction of the competent

authority sufficient guarantees for the protection of insureds,

policyholders, creditors or other interested parties.

(2)

For the purposes of this regulation>

(a) “business of affiliated insurance” means the

business of a cell which carries on business of insurance

or reinsurance restricted to risks originating from>

(i) an undertaking being the sole holder of

the cell shares of the particular cell< or

(ii) undertakings in which the undertaking

referred to in sub-paragraph (i) holds a participating

interest< or

(iii) an undertaking being the sole user of

the particular cell< or

(iv) undertakings which are the sole users

of the particular cell and in which the undertaking

referred to in sub-paragraph (iii) holds a

participating interest<

(b) “business of reinsurance” means the business

of a cell which carries on an activity consisting in

accepting risks ceded by an insurance undertaking or by

another reinsurance undertaking< and

(c) “compulsory insurance” means any insurance

which a person is required by law to have in effect.

(3) Specific written agreements entered into in

terms of sub-regulation (1) shall be operative as between the

contracting parties, and shall not be of prejudice or advantage

to third parties.”.

8. In sub-regulation (2) of regulation 16 of the principal

regulations, for the words “by an insurance directive”, there shall be

substituted the words “by an insurance rule”.

9. In sub-regulation (2) of regulation 17 of the principal

regulations, for the words “The provisions of article 21 of the Malta

Financial Services Authority Act and article 57 of the Insurance Business

Act”, there shall be substituted the words “The provisions of article 21

of the Malta Financial Services Authority Act, article 57 of the Insurance

Business Act and article 50 of the Insurance Intermediaries Act”.

10. Immediately after regulation 17 of the principal regulations,

there shall be added the following new regulation 18>

Cell companies and their cells shall comply with

“Compliance

by cell

these regulations and any agreement incompatible with these

companies

regulations shall, to the extent of such incompatibility, be null

and their

cells with the

regulations. and void.”.

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