Insurance) (Amendment) Regulations, 2024

Suppliment tal-Gazzetta tal-Gvern ta’ Malta Nru. 21,307, 30 ta’ Awwissu, 2024

L.N. 201 of 2024

COMPANIES ACT

(CAP. 386)

Companies Act (Cell Companies Carrying On Business Of

Insurance) (Amendment) Regulations, 2024

IN EXERCISE of the powers conferred by 84A of the

Companies Act, the Minister responsible for the registration of

commercial partnerships, in consultation with the Minister

responsible for finance, acting on the advice of 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, 2024 and these regulations shall be read and construed as

one with the Companies Act (Cell Companies Carrying on Business of S.L. 386.10.

Insurance) Regulations, hereinafter referred to as the "principal

regulations".

(Regulation 17)

Declaration of Solvency or Insolvency of a cell

Reg. No. of Cell Company........................

Name of Cell Company.....................................................................................

Name of Cell.....................................................................................................

Delivered by......................................................................................................

To the Registrar of Companies

I/We <Name & Surname> being the director/s (a) of (b) <Name

of cell company>. hereby declare in accordance with regulation 17(3)

of the Companies Act (Cell Companies Carrying on Business of

Insurance) Regulations (S.L. 386.10) that cell <NAME OF THE

CELL> is being wound up and that I/we have made a full inquiry into

the affairs of the said cell and have formed the opinion that the said

cell is solvent/ insolvent*.

A statement of the cell’s assets and liabilities made up to <Day>

………....day of <Month>………… of the year <Year>……………..

is being attached as part of this declaration.

Signature...............................................................................................................

<Name>

Director/s

Dated this ………………….<Day> day of …………………..<Month> of the

year <Year>.

This form must be completed in typed form.

This declaration is to be delivered together with the notice of dissolution.

(a)

In the case of a cell company having more than two directors, this declaration

is to be submitted and signed by the majority of directors.

(b)

State cell company name.

* Delete as necessary".

€0.36

In the definition "cell transfer approval" in regulation 2 of Amends

the principal regulations, the words "under regulation 15" shall be regulation

the principal

substituted by the words "under regulation 16".

regulations.

Immediately after sub-regulation (3) of regulation 15 of the Amends

principal regulations there shall be added the following new sub- regulation

the principal

regulations.

"(4) A cell which exclusively carries on business

of affiliated insurance or business of reinsurance and

which has entered into a specific written agreement

which provides that only the cellular assets of that cell

may be utilised to satisfy the cellular liability of such

cell, in line with this regulation, before the entry into

force of the Companies Act (Cell Companies Carrying

on Business of Insurance) (Amendment) Regulations,

2024 may continue to pursue the business on the basis

of the said specific written agreement entered into in

accordance with sub-regulation (1), as approved by the

competent authority prior to the entry into force of the

Companies Act (Cell Companies Carrying on Business

of Insurance) (Amendment) Regulations, 2024 in line

with this regulation, until ten (10) years from the date

of the coming into force of the said regulations, without

prejudice to anything done or omitted to be done under

the provisions of these regulations, the Insurance

Business Act, and regulations and Insurance Rules

issued thereunder

Provided that where a cell continues to

pursue the business of affiliated insurance or business

of reinsurance on the basis of the specific written

agreement entered into in accordance with sub-

regulation (1), such cell shall continue to comply with

and adhere to the provisions of these regulations during

the specified ten (10) years

Provided further that, for the purposes of this

regulation, during the specified ten (10) years, the

provisions of paragraph 5.5.95 of Chapter 5 of the

Insurance Rules shall not apply.

(5) Without prejudice to sub-regulation (4), this

regulation shall cease to have effect on the date of

coming into force of the Companies Act (Cell

Companies Carrying on Business of Insurance)

(Amendment) Regulations, 2024 and shall only remain

applicable to those specific written agreements entered

into in accordance with sub-regulation (1) before the

entry into force of the Companies Act (Cell Companies

Carrying on Business of Insurance) (Amendment)

Regulations, 2024.".

Immediately after regulation 15 of the principal

regulations, as amended, there shall be added the following new

(1) Notwithstanding the

provisions of

exclusively business regulations 14 and 15, where a cell

of affiliated insurance

(a) exclusively carries on business of

affiliated insurance;

(b) holds eligible basic own funds to

cover the Solvency Capital Requirement which

shall not be less than the Minimum Capital

Requirement as though the said cell were an

authorised insurance undertaking or an

authorised

reinsurance

undertaking,

in

accordance with the requirements of article 15

and 17 of the Insurance Business Act, and any

regulations and Insurance Rules made for the

purposes of the said articles; and

(c) is specifically permitted by the

memorandum and articles of association of the

cell company,

the cell company may, 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

"business of affiliated insurance" means the

business of a cell which carries on business of

insurance or reinsurance restricted to risks originating

from

(a) an undertaking being the sole holder

of the cell shares of the particular cell; or

(b) undertakings

in

which

the

undertaking referred to in paragraph (a) holds a

participating interest; and

"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.".

5. Regulation 16 of the principal regulations shall be amended

as follows

(a) sub-regulation (1) thereof shall be substituted by the

following new sub-regulation

"(1) It shall be lawful, subject to the provisions of

sub-regulation (3)

(a) for the cellular assets attributable to any

cell of a cell company, but not the non-cellular

assets of a cell company, to be transferred to

(i) another cell company authorised

under article 7 of the Insurance Business

Act;

(ii) an

authorised

insurance

undertaking or a European insurance

undertaking or a European reinsurance

undertaking as defined in the Insurance

Business Act;

(iii) a third country insurance

undertaking as defined in the Insurance

Business Act; or

(iv) another cell of the same cell

company

Provided that the cellular assets

attributable to a cell of a cell company may

be transferred to another cell of the same

cell company, only where

(aa) the transferring cell does

not apply the provisions of regulation

15; and

(bb) the shareholders of the

transferring cell and the receiving cell

are the same persons;

(b) for the cellular assets attributable to

any cell of a cell company, enrolled in the

Managers List, as defined in the Insurance

Distribution Act, but not the non-cellular assets of

a cell company, to be transferred to

(i) a cell company enrolled as an

insurance manager under the Insurance

Distribution Act; or

(ii) an insurance manager enrolled

under the Insurance Distribution Act;

(c) for the cellular assets attributable to

any cell of a cell company, enrolled in the Brokers

List, as defined in the Insurance Distribution Act,

but not the non-cellular assets of a cell company,

to be transferred to

(i) a cell company enrolled as an

insurance broker under the Insurance

Distribution Act; or

(ii) an insurance broker enrolled

under the Insurance Distribution Act.";

(b) sub-regulation (4) thereof shall be substituted by the

following new sub-regulation

"(4) For the purpose of this regulation, the

competent authority may, by Insurance Rules, determine

the procedure to be adopted for the transfer of cellular

assets from a cell company.";

(c)

sub-regulation (5) thereof shall be deleted; and

(d) immediately after sub-regulation (9) thereof, there

shall be added the following new sub-regulations

"(10) For the purposes of sub-regulations 1(a)(i),

1(b)(i) and 1(c)(i), article 83 of the Act shall not apply. In

such case, immediately after having sought the competent

authority’s approval in terms of sub-regulation (3), but

before the cell transfer approval is granted, the cell

company intending to transfer the cellular assets of a cell

shall deliver to the Registrar for registration, a notice in

accordance with Schedule I, and the Registrar shall publish

such notice on a website maintained by him in accordance

with Insurance Rules issued hereunder.

(11) Where the competent authority has granted a

cell transfer approval, for the purposes of sub-regulation

(1) and (3), the cell company transferring the cellular assets

shall deliver to the Registrar for registration a copy of the

cell transfer approval issued by the competent authority.

(12) Where all the cellular assets of a cell of a cell

company have been transferred to another company, the

Registrar shall

(a) proceed with striking off the name of the

cell from under the name of the cell company;

(b) register the name of the cell under the

other company; and

(c) inform

the

competent

authority

accordingly.".

6. Regulation 17 of the principal regulations shall be amended

as follows

(a) in the marginal note thereof the words "Liquidation of

cells", shall be substituted by the words "Ceasing, run-off or

servicing and winding up of cells.";

(b) in sub-regulation (1) thereof, the words: "the

liquidation of a cell" shall be substituted by the words "the

ceasing of a cell, the run-off or servicing of a cell; and the

winding up of a cell";

(c) in sub-regulation (2) thereof, the words "adopted for

the liquidation of a cell." shall be substituted by the words

"adopted for the ceasing, run-off or servicing and winding up of

a cell."; and

(d) immediately after sub-regulation (2) thereof, as

amended, there shall be added the following new sub-regulation

"(3) Where the cell company informs the competent

authority that one of its cells intends to cease to carry on

business, the said cell company shall deliver to the

Registrar for registration, a notice in accordance with

Schedule II informing the Registrar that one of its cells

shall be wound up, together with a confirmation of

solvency or insolvency of such cell.".

7. Paragraph (d) of sub-regulation (1) of regulation 19

thereof, shall be substituted by the following new paragraph

"(d) to refuse to issue a cell transfer approval under

regulation 16,".

8. Regulation 19 of the principal regulations, having the Amends the

marginal note "Compliance by cell companies and their cells with the second

regulation 19 of

regulations.", shall be renumbered as regulation 19A.

the principal

regulations.

9. Immediately after regulation 20 of the principal Addition of new

Schedule I and

regulations, there shall be added the following new Schedules

Schedule II.

"SCHEDULE I

(Regulation 16)

Notification to the Registrar

Reg. No. of Cell Company........................

Notice of approval for the transfer of the cellular assets of a cell

company to another cell company

Name of Cell Company.....................................................................................

Name of Cell.....................................................................................................

Delivered by......................................................................................................

To the Registrar of Companies

I/We hereby give you notice that the draft terms of agreement

have been delivered to the competent authority in terms of Insurance

Rules made specifically for the purposes of the Companies Act (Cell

Companies Carrying on Business of Insurance) Regulations (S.L.

386.10). It is being proposed, and approval is being sought from the

competent authority, that the Cell Company transfers the cellular

assets attributable to any one of its cells [include name of cell/s] to

another cell company [include name of Cell Company] authorised

under Article 7 of the Insurance Business Act (Cap. 403)/ enrolled as

an insurance manager under the Insurance Distribution Act (Cap.

487)/ enrolled as an insurance broker under the Insurance Distribution

Act (Cap. 487)*.

Signature of Director/s (a).................................................................................

This form must be completed in typed form.

(a)

In the case of a company having more than two directors, this declaration is to

be submitted and signed by the majority of directors.

*Delete as necessary