INSURANCE BUSINESS (PHASING-IN) REGULATIONS (phasing-in)

INSURANCE BUSINESS (PHASING-IN)

SUBSIDIARY LEGISLATION 403.20

INSURANCE BUSINESS (PHASING-IN)

REGULATIONS

1st April, 2015;

1st July, 2015 *

LEGAL NOTICE 120 of 2015.

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

(Phasing-in) Regulations.

(2) The purpose of these regulations is to implement

Article 308a of the Solvency II Directive and they shall be

interpreted and applied accordingly.

In these regulations, unless the context otherwise requires -

"the Act" means the Insurance Business Act;

"competent authority" means the Malta Financial Services

Authority established by the Malta Financial Services Authority

Act;

"the Solvency II Directive" means Directive 2009/138/EC of the

European Parliament and of the Council of 25 November 2009 on

the taking-up and pursuit of the business of Insurance and

Reinsurance (Solvency II) (recast), as amended from time to time,

and includes Directive 2014/51/EU of the European Parliament and

of the Council of 16 April 2014 amending Directives 2003/71/EC

and 2009/138/EC and Regulations (EC) No 1060/2009, (EU) No

1094/2010 and (EU) No 1095/2010 in respect of the powers of the

European Supervisory Authority (European Insurance and

Occupational Pensions Authority) and the European Supervisory

Authority (European Securities and Markets Authority) (“Omnibus

II”), any delegated acts and any technical standards that have been

or may be issued thereunder;

and the words and expressions which are used in these regulations

have the same meanings as in the Solvency II Directive.

As from 1st April 2015, for the purposes of the phasing-in

under the Solvency II Directive

(a) the competent authority shall have the power to decide

on the approval of

(i) ancillary own funds in accordance with Article

90 of the Solvency II Directive;

(ii) the classification of own funds items referred to

in the third paragraph of Article 95 of the

Solvency II Directive;

(iii) undertaking specific parameters in accordance

with Article 104(7) of the Solvency II Directive;

*see regulation 1(3) of these Regulations, as originally promulgated.

INSURANCE BUSINESS (PHASING-IN)

(iv)

a full or partial internal model in accordance

with Articles 112 and 113 of the Solvency II

Directive;

(v) ancillary own funds of an intermediate insurance

holding company in accordance with Article

226(2) of the Solvency II Directive;

(vi) a group internal model in accordance with

Articles 230, 231 and 233(5) of the Solvency II

Directive;

(vii) the use of the duration based equity-risk sub-

module in accordance with Article 304 of the

Solvency II Directive;

(viii) the use of the matching adjustment to the

relevant risk-free interest rate term structure in

accordance with Articles 77b and 77c of the

Solvency II Directive;

(ix) the use of the transitional measure on the risk-

free interest rates in accordance with Article

308c of the Solvency II Directive;

(x) the use of the transitional measure on technical

provisions in accordance with Article 308d of

the Solvency II Directive;

(b) the competent authority shall have the power to

(i) determine the level and scope of group

supervision in accordance with Title III, Chapter

I, Sections 2 and 3 of the Solvency II Directive;

(ii) identify the group supervisor in accordance with

Article 247 of the Solvency II Directive; and

(iii) establish a college of supervisors in accordance

with Article 248 of the Solvency II Directive.

As from 1st July 2015, for the purposes of the phasing-in

under the Solvency II Directive, the competent authority shall have

the power to

(a) decide to deduct any participation in accordance with

the second sub-paragraph of Article 228 of the

Solvency II Directive;

(b) determine the choice of method to calculate group

solvency in accordance with Article 220 of the

Solvency II Directive;

(c) make the determination on equivalence, where

appropriate, in accordance with Articles 227 and 260

of the Solvency II Directive;

(d) permit authorised insurance and reinsurance

undertakings to be subject to Articles 238 and 239, in

accordance with Article 236 of the Solvency II

Directive;

(e) make the determinations referred to in Articles 262

and 263 of the Solvency II Directive; and

INSURANCE BUSINESS (PHASING-IN)

(f)

determine, where appropriate, the application of

transitional measures in accordance with Article 308b

of the Solvency II Directive.

The decisions taken by the competent authority on

applications submitted by authorised insurance or reinsurance

undertakings for approval or permission in accordance with

regulations 3 and 4 shall not become applicable before 1st January

2016.

(1) For the better carrying out of the provisions of these

regulations, the competent authority may issue Insurance Rules for

the purpose of implementing the guidelines issued by the European

Insurance and Occupational Pensions Authority under Article 16 of

Regulation (EU) No. 1094/2010 of the European Parliament and of

the Council of the 24 November 2010 establishing a European

Supervisory Authority amending Decision No. 716/2009/EC and

repealing Commission Decision 2009/79/EC, for the phasing-in of

the Solvency II Directive.

(2) Such Insurance Rules may contain such incidental,

supplementary and consequential provisions as appear to the

competent authority to be expedient for the purposes of these

regulations.