INSURANCE BUSINESS (PROTECTION AND COMPENSATION FUND) REGULATIONS

COMPENSATION FUND)

SUBSIDIARY LEGISLATION 403.25

INSURANCE BUSINESS (PROTECTION AND

COMPENSATION FUND) REGULATIONS

22nd November, 2024

LEGAL NOTICE 318 of 2024.

PART I

PRELIMINARY

(1)

The title of these regulations is the Insurance

Business (Protection and Compensation Fund) Regulations.

(2)

The scope of these regulations is to partially transpose

the relevant provisions of Directive 2009/103/EC of the European

Parliament and of the Council of 16 September 2009 relating to

insurance against civil liability in respect of the use of motor vehicles

and the enforcement of the obligation to insure against such liability,

as amended by Directive (EU) 2021/2118 of the European Parliament

and of the Council of 24 November 2021 amending Directive 2009/

103/EC relating to insurance against civil liability in respect of the use

of motor vehicles, and the enforcement of the obligation to insure

against such liability, as may be amended from time to time, and

includes any binding legal instruments, guidelines and any other

measures that have been or may be issued thereunder.

(1) In these regulations, unless the context otherwise

requires

''Act'' means the Insurance Business Act;

"administrator" means

(a)

in Malta, any person or body appointed by

the relevant authorities for the purpose of administering

reorganisation measures; or

(b)

in another Member State or EEA State, any

person or body appointed by the foreign administrative

or judicial authorities or by the governing bodies of an

insurance undertaking authorised in such Member State

or EEA State for the purposes of administering

reorganisation measures

Provided that "relevant authorities" shall

have the same meaning as assigned to it in the Insurance

Business (Reorganisation and Winding up of Insurance

Undertakings) Regulations;

"authorised reinsurance undertaking" shall have the same

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meaning as assigned to it in the Act;

"binding legal instruments" means any directly

applicable measures, including but not limited to any

implementing technical standards, regulatory technical

standards or any similar measures issued under European Union

legislation;

''business of motor insurance'' means the business of

insurance of group 2 as specified in Part II of the Third

Schedule to the Act or any class or part class thereof;

''competent authority'' shall have the same meaning as

assigned to it in the Act;

"European compensation body" means a body set up or

authorised by a Member State other than Malta, with the task of

providing compensation to injured parties who are resident

within its territory for damage to property or personal injuries

caused by a vehicle, in terms of Articles 10a(1) and 25a(1) of

the Motor Insurance Directive;

"European insurance undertaking" shall have the same

meaning as assigned to it in the Act;

"European regulatory authority" shall have the same

meaning as assigned to it in the Act;

''Financial Services Tribunal'' shall have the same

meaning as assigned to it in article 57 of the Act;

"from Malta" shall be construed as the carrying on of

motor vehicle liability insurance business by an insurer in

another Member State outside of Malta, and excludes any motor

vehicle liability insurance business carried on exclusively in

Malta;

"Fund A" means the fund which is composed of

contributions made by insurers which carry on

(a) long term business in Malta in any one (1)

or more of the following classes specified in the Second

Schedule to the Act: I, II, IV, VII and IX; and, or

(b) general business in Malta in any one (1) or

more of the following classes or part classes specified in

the Third Schedule to the Act: 1, where the insured is an

individual, 2, 3, 8, 9, 13, 16, 17 and 18; and, or

(c)

class 10 in terms of the Third Schedule to

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the Act, also referred to as motor vehicle liability

insurance business which is carried on in Malta until the

day preceding the initiation date;

"Fund B" means the fund which is composed of

contributions made by insurers which carry on motor vehicle

liability insurance business in Malta on, or after the initiation

date as the case may be;

"Fund C" means the fund which is composed of

contributions made by insurers which carry on motor vehicle

liability insurance business from Malta on, or after the initiation

date, as the case may be;

"Fund D" means the fund in relation to any civil liability

in terms of Part V;

''gross premiums'', in relation to an insurer and a calendar

year, means premiums after deduction of discounts, refunds and

rebates of premium and premiums receivable by the insurer

under reinsurance contracts accepted by the undertaking but

before deduction of premiums for reinsurance ceded and before

deduction of commission payable by the undertaking

Provided that, in the case of an insurer which is an

undertaking whose head office is in a country outside Malta, or

an undertaking whose head office is in Malta and carries on

business of insurance in a country outside Malta, excluding

motor vehicle liability insurance business on, or after the

initiation date, the gross premium income relates to premium

income attributable to business of insurance carried on by the

insurer in Malta

Provided further that in the case of an insurer

which is an undertaking whose head office is in Malta and

which carries on motor vehicle liability insurance business in

Malta and, or from Malta, after the initiation date, the gross

premium income relates to premium income attributable to

motor vehicle liability insurance business carried on by the

insurer in Malta and from Malta, after the initiation date;

"home Member State" shall have the same meaning as

assigned to it in regulation 2(1) of the European Passport Rights

for Insurance and Reinsurance Undertakings Regulations;

"initiation date" means the 10th July 2024, being the date

of entry into force of the agreements referred to in the first

paragraph of Article 10a (13) and the first paragraph of Article

25a (13) of the Motor Insurance Directive;

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"injured party" and "party injured" means any person

entitled to compensation in respect of any loss or injury caused

by vehicles;

''insolvent insurer'' shall, for the purposes of Part III, be

construed in accordance with regulation 19(1), and for the

purposes of Part IV shall mean an insurer or a European

insurance undertaking subject to bankruptcy, winding up

proceedings or any other equivalent proceedings;

''insurer'' means

(a)

for the purposes of Fund A, in terms of Part

III, an insurance undertaking authorised under the Act to

carry on in Malta long term business or general business

or an insurance undertaking which is authorised

thereunder to carry on both long term business and

general business whether or not such business is, in each

case, combined with business of reinsurance. An

insurance undertaking whose business is restricted to

reinsurance and an undertaking which only in so far as it

carries on motor vehicle liability insurance business on

or after the initiation date shall be excluded;

(b)

for the purposes of Fund B, in terms of Part

IV, an insurance undertaking authorised under the Act to

carry on motor vehicle liability insurance business in

Malta on or after the initiation date;

(c)

for the purposes of Fund C, in terms of Part

IV, an insurance undertaking authorised under the Act to

carry on motor vehicle liability insurance business from

Malta on or after the initiation date;

(d)

for the purposes of Fund D in terms of Part

V, an insurance undertaking authorised under the Act to

carry on motor vehicle liability insurance business in

Malta

Provided that for the purposes of Fund A, Fund B and

Fund D, an insurer shall include a branch of a third country insurance

undertaking authorised under article 11 of the Act;

''insurer concerned'' shall have the meaning as assigned

to it in regulation 40;

"liquidator" means

(a)

in Malta, a liquidator appointed under the

Companies Act or the Act, as applicable, to an insurer

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and includes the official receiver when acting in the

capacity of liquidator; or

(b)

in another Member State or EEA State, any

person or body appointed by the foreign authorities,

foreign administrative or judicial authorities or by the

governing bodies of a European insurance undertaking

authorised in that Member State or EEA State, for the

purposes of administering winding-up proceedings;

''Management Committee'' means the Protection and

Compensation Fund Management Committee established by

regulation 5;

"Motor Insurance Directive" means Directive 2009/103/

EC of the European Parliament and of the Council of 16

September 2009 relating to insurance against civil liability in

respect of the use of motor vehicles and the enforcement of the

obligation to insure against such liability, as amended from time

to time, and includes any binding legal instruments, guidelines

and any other measures that have been or may be issued

thereunder;

"motor vehicle liability insurance business" means

business of insurance of class 10 as specified in Part I of the

Third Schedule to the Act;

''protected commitment'' shall be construed in accordance

with regulation 3(4)(a)(ii);

''protected liability'' shall be construed in accordance

with regulation 3(4)(d);

''protected risk'' shall be construed in accordance with

regulations 3(4)(a)(i) and 3(4) (b);

''the Protection and Compensation Fund" shall be

interpreted and construed in terms of Part XI of the Act and

shall comprise of Funds A, B, C and D as established by article

49 of the Act;

"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 any binding legal instruments, guidelines

and any other measures that have been or may be issued

thereunder;

"third country insurance undertaking" shall have the

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same meaning as assigned to it in the Act;

"vehicle" shall have the same meaning as assigned to

"motor vehicle" in article 2 of the Motor Vehicles Insurance

(Third Party Risks) Ordinance, and the term "vehicle" shall be

construed accordingly;

"winding-up proceedings" means

(a)

for an insurer, the collective proceedings

involving the realisation of the assets of an insurance

undertaking and the distribution of the proceeds among

the insurance creditors, creditors, shareholders or

members as appropriate, which necessarily involve any

intervention by the relevant authorities or by foreign

authorities or foreign administrative or judicial

authorities, including where the collective proceedings

are terminated by a composition or other analogous

measure, whether or not they are founded on insolvency

or are voluntary or wound up by the court;

(b)

for a European insurance undertaking, the

winding-up proceedings as defined in Article 268(1)(d)

of the Solvency II Directive.

(2)

The words and expressions which are used in the Act

shall, unless defined otherwise in these regulations, have the same

meanings as assigned to it in the Act.

(3)

These regulations shall not apply to an authorised

reinsurance undertaking.

PART II

THE PROTECTION AND COMPENSATION FUND

(1)

The Protection and Compensation Fund shall

consist of different funds as may be prescribed by these regulations,

and of all contributions made thereto and of all other assets and

revenues pertaining to it. Without prejudice to the proviso to

regulation 6(3), the assets of every fund shall be kept separate and

separately identifiable from the assets of the other funds. The assets

and liabilities of each fund shall be treated for all intents and purposes

of law as a patrimony separate from the assets and liabilities of each of

the other funds. The liabilities incurred in respect of each fund shall be

paid out from the assets forming part of the patrimony of the said fund.

No creditor shall seek, whether in any proceedings or by any other

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means whatsoever, to attempt to use any assets attributable to any one

fund to satisfy the liability which is not attributable to such fund.

(2)

The purposes of the Protection and Compensation Fund

shall be

(a)

for the payment of any claims in respect of risks

situated in Malta, excluding the payment of claims of motor

vehicle liability insurance business made on or after the

initiation date, and of commitments where Malta is the country

of the commitment, in the amounts prescribed by these

regulations against an insurer, remaining unpaid by reason of

the insolvency of such insurer;

(b)

for the payment of any claims in respect of risks

relating to motor vehicle liability insurance business, whether

such business is carried on in Malta or from Malta, against an

insurer, remaining unpaid by reason of insolvency of such

insurer;

(c)

for the payment of compensation to victims of

road traffic accidents in circumstances prescribed by these

regulations.

(3)

For the purposes of sub-regulation (2)

(a)

Parts III and IV make provision with respect to

payment of claims in the event of an insolvent insurer; and

(b)

Part V makes provision with

respect

to

compensation to victims of road traffic accidents.

(4)

There shall hereby be prescribed

(a)

in relation to Fund A in Part III

(i)

in respect of risks situated in Malta, the

following classes or part classes specified in Part I of the

Third Schedule to the Act as a protected risk, in classes

or part classes 1 where the insured is an individual, in

classes or part classes 2, 3, 8, 9, 10, 13, 16, 17 and 18,

and shall exclude class 10 as from the initiation date;

(ii)

in respect of commitments where Malta is

the country of the commitment, classes I, II, IV, VII and

IX specified in the Second Schedule to the Act as a

protected commitment;

subject, in each case, to such limitations and restrictions

prescribed by such Part;

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(b)

in relation to Fund B in Part IV, in respect of risks

situated in Malta, in class 10 as specified in Part I of the Third

Schedule to the Act as a protected risk carried on by an insurer

in Malta on or after the initiation date;

(c)

in relation to Fund C in Part IV, in respect of risks

situated outside Malta in class 10 as specified in Part I of the

Third Schedule to the Act carried on by an insurer from Malta

on or after the initiation date;

(d)

in relation to Fund D in Part V, any civil liability

to any person who is required to be covered by a policy of

insurance under compulsory insurance legislation as a protected

liability, subject to such limitations and restrictions prescribed

by such Part.

(1)

The Protection and Compensation Fund shall have

the power to delegate to any body or person any of its functions as the

Management Committee deems necessary.

(2)

The Management Committee shall have in place sound

and transparent governance practices.

(3)

The legal and judicial representation of the Protection

and Compensation Fund shall vest in the chairperson of the

Management Committee

Provided that, the Management Committee may appoint

any one (1) or more of its members or of the officers or agents of the

Protection and Compensation Fund to appear in the name and on

behalf of the Protection and Compensation Fund in any legal or

judicial proceedings and in any act, contract, instrument or other

document whatsoever. Where Part III, Part IV or Part V is in operation,

in respect of any powers and duties of the Protection and

Compensation Fund exercisable by any body or person as provided in

regulation 6(4), the legal representation of the Protection and

Compensation Fund may also vest in such body or person or in the

legal representative thereof.

(1)

There shall be a Management Committee to be

known as the Protection and Compensation Fund Management

Committee which shall consist of a chairperson and seven (7)

members to be appointed by the competent authority and which shall

include among its members

(a)

an officer, performing duties with the competent

authority possessing the necessary expertise and experience in

business of insurance;

(b)

three (3) persons nominated by an association or

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other body representing insurers and recognised for such

purpose by the competent authority, of whom

(i)

one (1) person shall represent insurers

whose head office is in Malta which carries on general

business in Malta;

(ii)

one (1) person shall represent insurers

whose head office is in Malta and which carries on long

term business in Malta; and

(iii) one (1) person shall represent insurers

whose head office is in Malta and which carries on motor

vehicle liability insurance business in Malta;

(c)

a person who, because of experience,

qualifications or activities is considered as being able to state

and represent the point of view of consumers of financial

services;

(d)

an independent person who, in the opinion of the

competent authority, possesses the necessary expertise and

experience in financial services; and

(e)

a person who represents insurers whose head

office in Malta and which carries on motor vehicle liability

insurance business from Malta

Provided that such members of the Management

Committee shall serve the Protection and Compensation Fund in their

own personal capacity and shall not represent or receive directives or

instructions from the person or entity nominating them. All members

of the Management Committee shall work in the best interest of the

Protection and Compensation Fund and shall pursue and promote its

purposes.

(2)

Whenever, for any reason whatsoever, the association or

other body representing insurers referred to in sub-regulation (1)(b)

fails to nominate, within the time given to it for such purpose by the

competent authority the persons, or any of the persons, which it is

required to nominate under the said sub-regulation, the competent

authority shall appoint the persons, or the remaining persons, having

regard to the nomination provisions of sub-regulation (1).

(3)

A person nominated by an association or other body

representing insurers shall not be eligible for appointment if he has a

financial or other interest that is likely to affect the discharge by him of

his functions under these regulations.

(4)

Every member of the Management Committee shall hold

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office, including the office of chairperson, for such period and upon

such terms and conditions as may be determined by the competent

authority and indicated in the letter of appointment, such term of office

being not less than one (1) year and not more than three (3) years.

Every member of the Management Committee, including the

chairperson, shall be eligible for re-appointment.

(5)

A member of the Management Committee may be

relieved from office by the competent authority on the grounds of

inability to perform the functions of his office, whether due to

infirmity of mind or of body, or to any other cause, or of misbehaviour.

For the purposes of this sub-regulation, repeated and unjustified non-

attendance of the meetings of the Management Committee may be

deemed to amount to misbehaviour.

(6)

A member of the Management Committee may resign

from office by letter addressed to the competent authority.

(7)

The competent authority shall fill any vacancy occurring

in the Management Committee for any reason whatsoever as early as

the vacancy occurs. In so doing, the competent authority shall have

regard to the nomination provisions of sub-regulation (1).

(8)

Notice of the names of the members of the Management

Committee and of any resignation, dismissal and new appointment

shall be published in the Gazette.

(9)

The Management Committee may act notwithstanding

any vacancy among its members but shall conduct business only if at

least four (4) members are present.

(10) Whenever at any meeting of the Management Committee

the chairperson is absent, the members present for that meeting shall

elect from among themselves a person to act as chairperson and to

conduct the proceedings of such meeting.

(11) Decisions of the Management Committee shall be taken

by a majority of votes of the members present. The chairperson shall

have an original vote and, in the event of an equality of votes, a second

or casting vote.

(12) Subject to the provisions of the Act and of these

regulations, the Management Committee shall have the power to

regulate its own proceedings and may also establish such procedures

or make such rules as it may deem appropriate for the better fulfilment

of its purposes.

(13) Subject to sub-regulation (14), the Management

Committee shall pay to the chairperson and each member of the

Management Committee such remuneration as it may determine.

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(14) Any determination of the Management Committee with

respect to the remuneration to be paid to the chairperson and to any

member of the Management Committee shall be subject to the

approval of the competent authority.

(15) The competent authority shall appoint one (1) of its

officers to serve as secretary to the Management Committee. Such

person shall be responsible to make the necessary preparations for the

meetings of the Management Committee and to keep the minutes

thereof.

(1)

The Protection and Compensation Fund shall be

administered by and be under the general control of the Management

Committee.

(2)

The Management Committee may invest contributions

made by insurers in terms of regulations 17 and 27 in a prudent

manner.

(3)

It shall be the duty of the Management Committee to

keep the assets of Fund A, Fund B, Fund C and Fund D separate and

separately identifiable

Provided that the Management Committee may cause or

permit the assets of Fund A, Fund B or Fund C or a combination of the

same to be collectively invested or collectively managed provided that

the assets in question remain separately identifiable.

(4)

Subject to the provisions of sub-regulation (1), the

Management Committee shall have the power to appoint officers or

agents of the Protection and Compensation Fund and to grant them

such powers or authority as it may deem appropriate. In consultation

with the competent authority, the said Committee may, for the better

fulfilment of its purposes, delegate any part of its business to be

conducted on its behalf by such body or person and under such

arrangements or agreements as it may deem appropriate.

(5)

The Management Committee shall not enter into an

arrangement or agreement as is envisaged in sub-regulation (4) in

respect of the purpose set out in regulation 3(2)(c), unless there is in

force and in a manner satisfactory to the Management Committee, an

agreement among insurers carrying on business of motor insurance in

Malta, binding on all parties thereto and requiring them to act as

insurers concerned, and where any such agreement between insurers

ceases to be operative or to be satisfactory to the Management

Committee, any agreement or arrangement entered into by the

Management Committee under this regulation shall cease to have

effect upon notice in writing by the Management Committee to such

person as may lawfully receive such notices on behalf of the body with

which the arrangement or agreement was made.

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(6)

Where an arrangement or agreement as is envisaged in

sub-regulation (5) has been entered into by the Management

Committee, and for so long as such arrangement or agreement is in

operation, Part III shall have effect if the arrangement or agreement

relates to the purpose set out in regulation 3(2)(a), Part IV shall have

effect if the arrangement or agreement relates to the purpose set out in

regulation 3(2)(b) on or after the initiation date, and Part V shall have

effect if the arrangement or agreement relates to the purpose set out in

regulation 3(2)(c).

(7)

The competent authority may issue Insurance Rules to

determine such incidental, supplementary and consequential

provisions as appear necessary for the performance of the

Management Committee’s functions and conduct of its business under

any provisions of these regulations.

(1)

Other than for the proper discharge of their duties

or functions under the Act, these regulations or as may be otherwise

provided in any other law, the Management Committee, including its

members and any former members of the said Committee, shall treat

any information acquired in the discharge of its duties as confidential,

and shall not, directly or indirectly, disclose such information to any

other person, except with the consent of the person who had divulged

the information

Provided that information may be disclosed by the

Management Committee for the purposes of any proceedings before

any court or tribunal.

(2)

Notwithstanding the provisions of sub-regulation (1), the

Management Committee shall have the power to co-operate with,

request from, and exchange information with the competent authority

where that information is necessary for the performance of its duties.

(1)

Every insurer shall, when satisfying its

obligations under regulations 17 and 27, furnish the Protection and

Compensation Fund with a statement of the gross premium income of

the undertaking liable to the contribution

(a)

in respect of Fund A, for general business, in any

one or more of the following classes or part classes as specified

in Part I of the Third Schedule of the Act: classes or part classes

1, where the insured is an individual, classes or part classes 2, 3,

8, 9, 10, 13, 16, 17 and 18, under regulation 17(5)(a), and

excluding motor vehicle liability insurance business carried out

on or after the initiation date;

(b)

in respect of Fund A, for long term business, in

any one or more of the following classes as specified in the

Second Schedule to the Act: classes I, II, IV, VII and IX, under

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regulation 17(5)(b);

(c)

in respect of Fund B, for motor vehicle liability

insurance business carried on in Malta on or after the initiation

date, under regulation 27(5)(a);

(d)

in respect of Fund C, for motor vehicle liability

insurance business carried on from Malta on or after the

initiation date, under regulation 27(5)(b).

(2)

Where an insurer is required under this regulation to

provide the Protection and Compensation Fund with a statement in

respect of the gross premium income of more than one kind of

business mentioned in sub-regulations (1)(a) and (b) the insurer shall

provide a separate statement in respect of gross premium income of

each kind of business.

(3)

Any person who causes or permits to be included in a

statement furnished to the Protection and Compensation Fund in

accordance with this regulation, any information which he knows to be

inaccurate, false or misleading in any material respect, or recklessly

furnishes information or makes a statement which is inaccurate, false

or misleading in any material respect shall, be guilty of an offence and

liable, on conviction, to a fine (multa) of not less than one thousand

and two hundred euro (€1,200) but not exceeding two thousand and

four hundred euro (€2,400).

(4)

Any insurer that infringes or fails to comply with sub-

regulations (1) or (2) shall be liable to an administrative penalty not

exceeding five thousand euro (€5,000) in respect of each infringement

or failure to comply, as the case may be, and where such infringement

or failure to comply continues, a further penalty not exceeding one

hundred and sixteen euro (€116) for each day during which the

infringement or failure to comply continues.

(5)

Any administrative penalty imposed by the competent

authority under sub-regulation (4) shall be recoverable by the

Protection and Compensation Fund in the same manner and to the

same extent as an administrative penalty is recoverable by the

competent authority under regulations made for the purposes of article

67(6) of the Act and, in any recovery, any reference to the ''competent

authority'' made in the said regulations shall be deemed to be a

reference to "the Protection and Compensation Fund''.

(1)

The Management Committee shall review the

adequacy of the contributions every three years, or whenever serious

events or future changes in economic conditions that may have adverse

effects on the overall financial standing of the insurers occur, or

whenever requested by the competent authority. The said review of the

adequacy of the contributions to Fund A, B and C, as stipulated in

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regulations 17 and 27, shall take into account inter alia

(a)

the contributions made to the respective Fund;

(b)

the technical provisions

of

every

insurer

contributing to the respective Fund;

(c)

the solvency ratio of every insurer contributing to

the respective Fund;

(d)

any long term inflation;

(e)

an increase in the amount of insurers contributing

to the respective Fund;

(f)

the nature, type and mix of business carried on by

the insurers contributing to the respective Fund, and

(g)

any such other information

which

the

Management Committee deems appropriate.

(2)

The competent authority shall provide the Management

Committee with all the information necessary for the Management

Committee to conduct its review. Once the review is completed, the

Management Committee shall draw up a report on the adequacy of

such funds stating the reasons for its consideration and shall submit

that report to the competent authority

Provided that where the Management Committee

requires information from the competent authority which is not

publicly available, such information shall be provided to the said

Committee in an anonymised format.

(3)

Whenever the competent authority receives information

or a report as is provided for in sub-regulation (2), the competent

authority shall, after consultation with the Management Committee

and the auditor of the Protection and Compensation Fund, direct the

Management Committee in writing

(a)

to continue to exercise its functions and powers

under regulation 17 and 27 with respect to contributions to

Funds A, B and C made in accordance with sub-regulation (6)

and to require the contributions payable thereunder to continue

to be paid

(i)

according to the percentage specified in the

abovementioned regulations; or

(ii) according to a percentage that is higher or

lower than the percentage specified in the

abovementioned regulations as the competent authority

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shall specify in the directive, or

(b) to suspend exercising its functions and powers

under regulations 17 and 27 with respect to contributions to

such funds in respect of such business and to suspend the

contributions payable thereunder, for a period of one or more

years, as the competent authority shall specify in the directive

Provided that where the competent authority directs the

Management Committee in writing to increase the percentage of

contributions stipulated in these regulations, the competent authority

shall ensure that any additional contribution does not unduly prejudice

the financial sustainability of the insurers contributing to the

respective Fund.

(4)

(a)

Whenever, and for so long as, payment of the

contributions under regulation 17 or 27 is suspended, every insurer,

other than an insolvent insurer, to which that directive applies shall pay

to the Protection and Compensation Fund a contribution of seven

hundred euro (€700) and such contribution shall be paid in the month

of January of each year and be at the disposal of the Management

Committee to meet ordinary expenses incurred by the administration of

the Protection and Compensation Fund as indicated in regulations

17(6) and 27(6).

(b)

For the purpose of this sub-regulation ''insurer''

shall include an insurer which was licensed under the Insurance

Business Act, 1981, repealed by the Act, or is authorised under

the Act to carry on business of long term insurance, whether or

not such business constitutes, in whole or in part, business of a

protected commitment and which ceased to carry on that

business and is carrying on servicing of such business, or which

ceases to carry on that business and shall carry on servicing of

such business.

(5)

Whenever payment of contributions under regulations 17

or 27 is suspended, every insurer authorised under the Act to carry on

business of insurance in Malta, on or after the date of enforcement of

such suspension, shall pay to Fund A, B or C respectively, the

contribution established by regulations 17(5) or 27(5) for a period to

be determined by the Management Committee in consultation with the

competent authority.

(6)

If, for so long as the directive issued by the competent

authority under sub-regulation (3) is in operation, whenever it appears

to the Management Committee that the circumstances which led to the

issuing of the said directive have changed substantially or materially

so that the funds held by the Protection and Compensation Fund are

inadequate for the Management Committee to exercise its functions

for the purpose of regulation 3(2)(a) and (b), the Management

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Committee shall without delay, inform the competent authority of such

change and of the new circumstances and, on receiving such

information, the competent authority shall forthwith modify or revoke

its directive with respect to contributions to those funds.

(1)

Notwithstanding any provisions of these

regulations, if the Management Committee is required to make any

payment or to incur any other expenditure under any provision of Part

III, Part IV or Part V at a time when the Protection and Compensation

Fund makes available to it for expenditure under any such provision,

together with any other funds which are available to it from other

sources, including funds borrowed in terms of regulation 4(1) and

which might be applied to such expenditure, fall short of what is

prescribed or required by these regulations, the Management

Committee may then, in such a case, request every insurer to make

good the shortfall by such amount and within such time as it may

determine, subject to the provisions of regulations 17(2), 17(3), 27(3),

27(5), 28 and 39.

(2)

The Management Committee shall notify the competent

authority where an insurer fails to comply with the obligations

imposed on it under sub-regulation (1) and the competent authority

shall take all the appropriate measures including the imposition of an

administrative penalty in accordance with regulation 8(4), to ensure

that the insurer meets such obligations.

(1)

The Management Committee shall every calendar

year, and not later than five months after the end of its financial year,

submit to the competent authority a report on the discharge of its

functions, activities and operation of the Protection and Compensation

Fund during such year. Such report shall include inter alia

(a)

a statement showing the payments in and

payments out of the Protection and Compensation Fund during

its immediate previous year; and

(b)

annual financial statements prepared in

accordance with International Accounting Standards on

Auditing by approved auditors appointed for this purpose by the

Management Committee.

(2)

A copy of the report of the Management Committee

together with all documents attached referred to in this regulation,

shall upon request be made available to insurers contributing to the

Protection and Compensation Fund.

The financial year of the Protection and Compensation

Fund shall be an accounting period of twelve months ending on the

thirty-first day of December of each year.

COMPENSATION FUND)

(1)

The Management Committee shall cause proper

books of account to be kept with respect to

(a)

all sums of money received and disbursed by the

Protection and Compensation Fund and the matters in respect of

which the receipt and disbursements take place; and

(b)

the assets and liabilities of the Protection and

Compensation Fund.

(2)

Subject to the provisions of article 50 of the Act and

without prejudice to any separate treatment to be given under the said

provisions, separate accounts shall also be kept in respect of Funds A,

B, C and D. For the purposes of Fund A, separate accounts shall be

kept for contributions levied for general business and contributions

levied for long term business. All contributions and any income

derived in respect of any of Fund A, B, C and D respectively, as the

case may be, shall be utilised exclusively for disbursements relating to

each of the respective Fund

Provided that, notwithstanding the provisions of

regulations 17(6), 27(6) and 9(4), nothing in this sub-regulation shall

prevent the payment of sums belonging to the Protection and

Compensation Fund to meet administrative, legal, judicial or other

costs common to two or more Funds, subject to such costs being

properly apportioned between such Funds.

(3)

The books of account shall be kept at the offices of the

Protection and Compensation Fund or at such other place as the

Management Committee deems fit.

(4)

The provisions of article 181 of the Companies Act shall,

in so far as they are not incompatible, apply to the balance sheet and

profit and loss account of the Protection and Compensation Fund by

the substitution for references to ''company'' and ''directors'' in the said

provisions with references to ''the Protection and Compensation Fund''

and ''members of the Management Committee'' respectively.

(1)

Once at least in every financial year, the accounts

of the Protection and Compensation Fund shall be examined and the

correctness of every balance sheet and profit and loss account shall be

certified by an approved auditor appointed by the Management

Committee.

(2)

A copy of the audited financial statements or an extract

thereof, together with a copy of the auditor’s report, shall be published

in a manner determined by the Management Committee within five (5)

months from the end of the financial year and shall, together with the

report on the activities of the Protection and Compensation Fund for

such year made under regulation 11(1), be made available to the public

COMPENSATION FUND)

on request.

An insurer on whom an administrative penalty has been

imposed under any provisions of these regulations, may within a

period of thirty (30) days beginning from the date of service of a notice

imposing such penalty, appeal to the Financial Services Tribunal and

the provisions of article 58 of the Act shall apply mutatis mutandis.

PART III

CONTRIBUTIONS AND PAYMENT OF CLAIMS IN THE EVENT

OF INSOLVENT INSURERS FOR FUND A

For the purposes of this Part

(a)

unless specified otherwise, any reference in this

Part to "general business" shall mean general business carried

on in Malta in any one or more of the following classes or part

classes of Part I of the Third Schedule to the Act: classes or part

classes 1 where the insured is an individual, classes or part

classes 2, 3, 8, 9, 10, 13, 16, 17 and 18, however, in respect of

the said class or part class 10, also referred to as motor vehicle

liability insurance business, such motor vehicle liability

insurance business shall fall under "general business", for the

purposes of this Part, only with respect to such motor vehicle

liability insurance business carried on in Malta before the

initiation date;

(b)

unless specified otherwise, any reference in this

Part to "long term business" shall mean long term business

carried on in Malta in classes I, II, IV, VII and IX of the Second

Schedule to the Act

Provided that for the purposes of regulation 17(4) the

terms "general business" and "long term business" shall have the same

meaning as assigned to them in article 5(1) of the Act.

(1)

The contributions to Fund A to be made by

insurers pursuant to article 50 of the Act are those prescribed by this

regulation.

(2)

Subject to the provisions of the following sub-

regulations, the Management Committee shall in every calendar year

for the purpose of Fund A

(a)

in so far as that purpose relates solely to general

business, require every insurer carrying on general business in

Malta, whether or not such business constitutes, in whole or in

part, business of a protected risk, to pay a contribution to Fund

COMPENSATION FUND)

A to be utilised exclusively for the payment of claims relating

to protected risks situated in Malta as defined in regulation

3(2)(a); and

(b)

in so far as that purpose relates solely to long term

business, require every insurer carrying on long term business

in Malta, whether or not such business constitutes, in whole or

in part, business of a protected commitment, to pay a

contribution to Fund A to be utilised exclusively for the

payment of claims relating to protected commitments as

defined in regulation 3(2)(a) where Malta is the country of the

commitment.

(3)

The obligation to pay contributions under sub-regulation

(2) shall also apply to an insurer, other than an insolvent insurer which

was licensed under the Insurance Business Act, 1981, repealed by the

Act, or is authorised under the Act to carry on business of long term

insurance, whether or not such business constitutes, in whole or in

part, business of a protected commitment and which ceased to carry on

that business and is carrying on servicing of such business, or which

ceases to carry on that business and shall carry on servicing of such

business. The obligation to pay contributions shall continue until the

insurer proves to the satisfaction of the competent authority that it has

no further liability arising from such business.

(4)

Without prejudice to sub-regulation (3), where an insurer

is authorised to carry on both long term business and general business

in Malta, separate treatment shall be given to contributions paid by the

insurer into Fund A under this regulation

(a)

in respect of long term business, to be utilised

exclusively for the payment of claims relating to protected

commitments where Malta is the country of the commitment, as

construed in regulation 3(4)(a)(ii); and

(b)

in respect of general business, to be utilised

exclusively for the payment of claims relating to protected risks

situated in Malta as construed in regulation 3(4)(a)(i).

(5)

Subject to the provisions of regulations 8 and 9, the

amount every insurer shall be required to contribute to Fund A, in

accordance with sub-regulation (2) shall be

(a)

if the contribution is made in accordance with

sub-regulation 2(a), zero point one two five per centum

(0.125%) of, and calculated by reference to, the gross premium

income by the insurer for the year ending last before the

beginning of such calendar year in respect of general business

relating to risks situated in Malta; and

COMPENSATION FUND)

(b)

if the contribution is made in accordance with

sub-regulation 2(b), zero point one two five per centum

(0.125%) of, and calculated by reference to, the gross premium

income by the insurer for the year ending last before the

beginning of such calendar year in respect of long term

business effected after 30 June 1986 relating to commitments

where Malta is the country of commitment.

(6)

A sum not exceeding five (5) per centum from the total

amount of contributions payable to the Protection and Compensation

Fund under sub-regulation (2), as may be determined by the

Management Committee, shall be at the disposal of the Management

Committee to meet ordinary expenses incurred by the administration

of the Protection and Compensation Fund, other than extraordinary

expenses incurred in relation to Fund A.

(7)

Expenses incurred with respect to Fund A pursuant to, or

in consequence of, regulation 3(2)(a) shall be paid out as follows

(a)

in relation to protected risks situated in Malta as

defined in regulation 3(2)(a), from the contributions made in

respect of general business; and

(b)

in relation to protected commitments where Malta

is the country of the commitment as defined in regulation

3(2)(a), from the contributions made in respect of long term

business.

(8)

The contributions payable by every insurer under sub-

regulation (2) shall be due on the first day of July of each calendar year

but may be paid on any working day during such month.

(9)

Any contribution payable under this regulation

remaining unpaid by any insurer for any reason whatsoever, other than

by reason of the insolvency of the insurer, shall be recoverable by the

Protection and Compensation Fund from the said insurer in the same

manner as an administrative penalty is recoverable by the competent

authority under the regulations made for the purposes of article 67 of

the Act, and, in any such recovery, any reference to "the competent

authority" made in those regulations shall be deemed to be a reference

to "the Protection and Compensation Fund".

Where a third country insurance undertaking establishes

a branch in Malta in accordance with article 11 of the Act, and the said

branch carries on general business and, or long term business in Malta,

such branch shall contribute to Fund A in the same amounts and the

same manner as stipulated in regulation 17.

(1)

Whenever an insurer is unable to meet its

obligations, the Management Committee may, in respect of the said

COMPENSATION FUND)

obligations arising from a claim under a policy of insurance covering a

protected risk situated in Malta, or a protected commitment where

Malta is the country of the commitment, make payments out of Fund

A, under and in accordance with the provisions of this Part, to a

qualifying person.

(2)

Payment shall also be made out of Fund A under this Part

if the insolvent insurer is, at the time that it is unable to meet its

obligations, servicing or running-off the business of insurance it was

licensed to carry on under the Act.

(3)

No payment shall be made out of Fund A under this Part

unless the Management Committee is satisfied that the name of the

insolvent insurer is struck off the register in terms of the provisions of

the Companies Act, or that the insolvent insurer is definitely wound

up.

(4)

For the purposes of these regulations, a person is a

qualifying person in relation to an insolvent insurer if

(a)

he is an insured of the insolvent insurer, eligible

for protection under this regulation;

(b)

he is a person, other than the policyholder, to

whom payment in respect of any sums falling due under the

policy could have been made in accordance with the policy; or

(c)

he is a person to whom the insolvent insurer is

liable to pay any sum or other consideration in respect of the

insured’s legal liability to such person under the policy of

insurance.

In the case of long term business protected commitments,

payment shall be made out of Fund A to every qualifying person, and

in the case of general business protected risks in terms of regulation

3(2)(a), payment shall be made to every qualifying person who is an

individual and, or to every non-corporate body or association of

persons if all such persons are individuals.

(1)

Where the Protection and Compensation Fund

receives a claim on or after the initiation date from a qualifying

person, in order to process the said claim, it may require further

information from

(a)

the qualifying person;

(b)

the insolvent insurer;

(c)

the administrator or liquidator of the insolvent

insurer; and, or

COMPENSATION FUND)

(d)

any other party which may be privy to information

relevant to the claim.

(2)

Where an insolvent insurer or their respective

administrator or liquidator compensates or denies liability, it shall

inform the Protection and Compensation Fund, in a timely manner.

In respect of a protected liability which is a liability

required to be covered by the Motor Vehicles Insurance (Third-Party

Risks) Ordinance, payment under this Part in respect of protected

104. liabilities aforesaid incurred by the insured of an insolvent insurer

shall cover the whole of such liabilities. In respect of all other

protected liabilities, payment under this Part in respect of

(a)

long term business protected commitments in terms of

regulation 3(2)(a), shall be limited to seventy-five per centum (75%) of

the actuarial valuation of the contract of insurance at the time the

undertaking concerned ceased to carry on such business, adjusted for

any premiums paid till date of payment, remaining unpaid, or twenty-

three thousand and five hundred euro (€23,500), whichever is less;

(b)

general business protected risks in terms of regulation

3(2)(a), shall be limited to seventy-five per centum (75%) of the

liabilities incurred remaining unpaid in any one case or twenty-three

thousand and five hundred euro (€23,500), whichever is less

Provided that in each case, the total amount of payments

to be made by Fund A under this Part with respect to any one insolvent

insurer shall not exceed two million and three hundred and fifty

thousand euro (€2,350,000).

(1)

In no case shall any payment be made under this

Part

(a)

where the claim is in respect of unearned

premiums;

(b)

where the claim is by or in respect of a person

who holds directly or indirectly twenty per centum (20%) or

more of the issued shares of such insolvent insurer; and, or

(c)

for claims in relation to motor vehicle insurance

liability business carried on by an insurer in Malta on or after

the initiation date.

(2)

Where the Management Committee is of the opinion that

an applicant is not entitled to compensation in whole or in part, the

Management Committee shall give notice in writing of such opinion to

such applicant and the reasons therefor.

COMPENSATION FUND)

In considering compensation to any applicant for

payment from Fund A under this Part, the Management Committee

shall take into account any other amount of compensation paid to the

applicant in respect of the same liability under the Act or any other

law, and in calculating the amount in respect of which the insolvent

insurer is unable to meet its liabilities, deduct from the insolvent

insurer’s liability any such amount of other compensation paid.

No payment from Fund A shall be made under this Part

unless and until the applicant for payment has assigned to the

Protection and Compensation Fund any right to any payment to which

he may be entitled to in respect of the same liability, and where such

liability is covered by reinsurance, Fund A shall in addition, be entitled

to pursue any reinsurance recoveries as if it were the insolvent insurer.

This Part shall not apply

(a)

to an insolvent insurer who carries on solely and

exclusively business of insurance restricted to any one class or

part class and such class or part class is, under these

regulations, neither a protected risk nor a protected

commitment; or

(b)

to a branch of a European insurance undertaking

carrying on business of insurance in accordance with the

European Passport Rights for Insurance and Reinsurance

Undertakings Regulations, and which provides to the

satisfaction of the competent authority that equivalent

protection is available to policyholders of protected risks in

terms of regulation 3(2)(a) and protected commitments in a

manner not being less favourable than that prescribed by this

Part, in the event of the insolvency of the European insurance

undertaking.

PART IV

CONTRIBUTIONS TO FUND B AND FUND C AND PAYMENT OF

CLAIMS FROM FUND B AND FUND C IN THE EVENT OF

INSOLVENT INSURERS CARRYING ON MOTOR VEHICLE

LIABILITY INSURANCE BUSINESS ON OR AFTER THE

INITIATION DATE

(1)

The contributions to Fund B and Fund C to be

made by insurers pursuant to article 50 of the Act are those prescribed

by this regulation.

(2)

Fund B and Fund C shall have sufficient funds available

to compensate injured parties when compensation payments are due

under this Part in situations where

(a)

the insurer is subject to winding-up proceedings

or any other equivalent proceedings, on or after the initiation

COMPENSATION FUND)

date; or

(b)

the European insurance undertaking, is subject to

bankruptcy proceedings, winding up proceedings or any other

equivalent proceedings, on or after the initiation date

Provided that for the avoidance of doubt, in no case shall

any claim against Fund B or Fund C be paid out, where any bankruptcy

proceedings, winding up proceedings or any other equivalent

proceedings of an insurer or of a European insurance undertaking,

regardless of whether there was a declaration of insolvency or

otherwise of such insurer or of such European insurance undertaking,

were commenced before the initiation date.

(3)

Subject to the provisions of the following sub-

regulations, the Management Committee shall in every calendar year

for the purpose of Fund B and Fund C, require

(a)

every insurer carrying on motor vehicle liability

insurance business in Malta on and, or after the initiation date,

to pay a contribution to Fund B, to be utilised exclusively for

the payment of claims relating to motor vehicle liability

insurance business carried on in Malta; and

(b)

every insurer carrying on motor vehicle liability

insurance business from Malta on and, or after the initiation

date, to pay a contribution to Fund C, to be utilised exclusively

for the payment of claims relating to motor vehicle liability

insurance business carried on from Malta.

(4)

Where an insurer is authorised to carry on motor vehicle

liability insurance business both in Malta and from Malta, separate

treatment shall be given to contributions paid by the insurer under this

regulation with respect to motor vehicle liability insurance business

(a)

carried on in Malta, contributions shall be utilised

exclusively for the payment from Fund B of claims relating to

motor vehicle liability insurance business carried on in Malta;

and

(b)

carried on from Malta, contributions shall be

utilised exclusively for the payment from Fund C of claims

relating to motor vehicle liability insurance business carried on

from Malta.

(5)

Without prejudice to regulation 8, and subject to

regulation 9, the amount every insurer shall in every calendar year be

required to contribute under sub-regulation (3) shall be

(a)

where the contribution is made to Fund B, zero

COMPENSATION FUND)

point five per centum (0.5%) of, and calculated by reference to,

the gross premium income by the insurer, or where the insurer

is not actively carrying on new motor vehicle liability insurance

business or is subject to winding-up proceedings or any other

equivalent proceedings, zero point one two five per centum

(0.125%) of, and calculated by reference to, the technical

provisions of the insurer, for the year ending last before the

beginning of such calendar year in respect of class 10 in Part I

of the Third Schedule to the Act in respect of risks situated in

Malta;

(b)

where the contribution is made to Fund C, zero

point five per centum (0.5%) of, and calculated by reference to

the gross premium income by the insurer, or where the insurer is

not actively carrying on new motor vehicle liability insurance

business or is subject to winding-up proceedings or any other

equivalent proceedings, zero point one two five per centum

(0.125%) of and calculated by reference to the technical

provisions of the insurer, for the year ending last before the

beginning of such calendar year in respect of class 10 in Part I

of the Third Schedule to the Act in respect of risks situated

outside of Malta.

(6)

A sum not exceeding 5 per centum (5%) from the total

amounts of respective contributions payable to Fund B and Fund C

under sub-regulation (3), as may be determined by the Management

Committee, shall be at the disposal of the Management Committee to

meet ordinary expenses incurred by the administration of the said

Funds, other than extraordinary expenses incurred in relation to the

purposes specified in regulation 3(2)(b).

(7)

Expenses incurred by Fund B and Fund C respectively,

pursuant to, or in consequence of, regulation 3(2)(b) shall be paid out

(a)

in respect of Fund B, in relation to risks situated in

Malta, from the contributions made in respect of motor vehicle

liability insurance business carried on in Malta; and

(b)

in respect of Fund C, in relation to risks situated

outside of Malta, from the contributions made in respect of

motor vehicle liability insurance business carried on from

Malta.

(8)

The contributions payable by every insurer in accordance

with sub-regulation (3) shall be due on the first (1) day of July of each

calendar year but may be paid on any working day during that month

COMPENSATION FUND)

Provided that the contribution due under sub-regulation

5(a), only to the extent of the first contribution payable in 2024 under

these regulations, shall be fully due by the thirty first (31 st ) day of

December of the year two thousand and twenty four (2024). No part

thereof shall be refundable. Notwithstanding, when calculating the

amount of the contribution due under sub-regulation 5(a), account shall

be had of any amounts that may have already been paid by the insurer

to the Protection and Compensation Fund under regulation 7(5) of the

Protection and Compensation Fund Regulations, when assessing the

contributions due under regulation 17(5) and regulation 27(5)(a) of

these regulations

Provided further that for the purposes of the contribution

due under sub-regulation 5(b), only to the extent of the first annual

contribution payable in 2024 under these regulations, this shall be fully

due by the thirty first (31 st ) day of December of the year two thousand

and twenty four (2024). No part thereof shall be refundable.

(9)

Any contribution payable under this regulation

remaining unpaid by any insurer for any reason whatsoever, other than

by reason of the insolvency of the insurer, shall be recoverable by the

Protection and Compensation Fund from the insurer in the same

manner as an administrative penalty is recoverable by the competent

authority under the regulations made for the purposes of article 67(6)

of the Act and, in any such recovery, any reference to ''the competent

authority'' made in the said regulations shall be deemed to be a

reference to ''the Protection and Compensation Fund''.

Where a third country insurance undertaking establishes

a branch in Malta in accordance with article 11 of the Act, and the said

branch carries on motor vehicle liability business in Malta, such

branch shall contribute to Fund B in the same amounts and the same

manner as stipulated in regulation 27.

(1)

Where an insurer or a European insurance

undertaking, as the case may be, which carries on motor vehicle

liability insurance business is subject to or winding up proceedings or

any other equivalent proceedings and where

(a)

the accident occurs in Malta and

(i)

the injured party resides in Malta, and the

policyholder of the vehicle causing the injuries is insured

by a European insurance undertaking, and the injured

party is entitled to compensation, the injured party may

present a claim for compensation, directly to the

Protection and Compensation Fund, and the Management

Committee shall pay the claim out of Fund B; or

COMPENSATION FUND)

(ii)

the injured party resides in Malta, and the

policyholder of the vehicle causing the injuries is insured

by an insurer, and the injured party is entitled to

compensation, the injured party may present a claim for

compensation, directly to the Protection and

Compensation Fund, and the Management Committee

shall pay the claim out of Fund B; or

(b)

the accident occurs in a Member State other than

Malta and

(i)

the injured party resides in Malta and the

policyholder of the vehicle causing the injuries is insured

by the European insurance undertaking authorised in the

Member State in which the accident occurred, and the

injured party is entitled to compensation, the injured

party may present a claim for compensation, directly to

the Protection and Compensation Fund, and the

Management Committee shall pay the claim out of Fund

C; or

(ii)

the injured party resides in Malta and the

policyholder of the vehicle causing the injuries is insured

by an insurer, and the injured party is entitled to

compensation, the injured party may present a claim for

compensation, directly to the Protection and

Compensation Fund, and the Management Committee

shall pay the claim out of Fund B

Provided that notwithstanding anything contained in this

regulation, where an insurer which carries on motor vehicle liability

insurance business in Malta is subject to winding up proceedings or

any other equivalent proceedings after the initiation date, but the claim

relates to a risk which is situated in Malta, which occurred before the

initiation date, such injured party may make a claim to the Protection

and Compensation Fund and the Management Committee shall pay the

claim out of Fund A

Provided further that notwithstanding anything contained

in this regulation, where an insurer which carries on motor vehicle

liability insurance business from Malta is subject to winding up

proceedings or any other equivalent proceedings, after the initiation

date, but the claim relates to a risk which is situated in a Member State

outside Malta which occurred before the initiation date, such injured

party may make a claim to the Protection and Compensation Fund and

the Management Committee shall pay the claim out of Fund C.

(2)

Without prejudice to any obligation under regulation 14

of the Insurance Business (Reorganisation and Winding Up of

Insurance Undertakings) Regulations, whenever an order is made or a

COMPENSATION FUND)

decision is taken by the Maltese Courts or the competent authority or

any other competent body to commence winding-up proceedings or

any other equivalent proceedings in respect of an insurer carrying on

motor vehicle liability insurance business in Malta or from Malta, the

competent authority shall ensure that such order or decision is made

public. The Management Committee shall ensure that all the European

compensation bodies are promptly informed about such order or

decision

Provided that where the claim is in respect of damage

resulting from motor vehicle liability accidents occurring outside

Malta, the Management Committee shall ensure that the compensation

bodies referred to in Article 24 of the Motor Insurance Directive, in all

Member States are promptly informed about such order or decision.

(1)

Where an insurer or a European insurance

undertaking, as the case may be, which carries on motor vehicle

liability insurance business is subject to bankruptcy proceedings,

winding up proceedings or any other equivalent proceedings, and the

Management Committee receives a claim from the European

compensation body in accordance with Articles 10a(10) and 25a(10) of

the Motor Insurance Directive, the Management Committee shall,

where

(a)

the accident occurs in a Member State outside

Malta and the injured party resides in such Member State, and

the policyholder of the vehicle causing the injuries is insured by

an insurer, fully reimburse the European compensation body the

sum paid by way of compensation to the injured party out of

(i)

Fund B, where the policy was issued by an

insurer which carries on motor vehicle liability insurance

business in Malta; and, or

(ii)

Fund C, where the policy was issued by an

insurer carrying on motor vehicle liability insurance

business from Malta;

(b)

the accident occurs in Malta and the injured party

resides in a Member State outside Malta, and the policyholder

of the vehicle causing the injuries is insured by an insurer, fully

reimburse the European compensation body of the sum paid by

way of compensation to the injured party out of

(i)

Fund B, where the insurer carries on motor

vehicle liability insurance business in Malta; and, or

(ii)

Fund C, where the insurer carries on motor

vehicle liability insurance business from Malta.

COMPENSATION FUND)

(2)

The Protection and Compensation Fund shall, after it has

received a claim for reimbursement make payment to the European

compensation body pursuant to sub-regulation (1) within a reasonable

time not exceeding six (6) months, unless otherwise mutually agreed

to in writing, which period shall start to run from the date it has

received the claim for reimbursement.

(1)

Where the Protection and Compensation Fund

receives a claim from an injured party resident in Malta, and the

policyholder of the vehicle causing the injuries is insured by the

European insurance undertaking it shall inform

(a)

the European compensation body in the home

Member State of the European insurance undertaking; and

(b)

the European insurance undertaking subject to

bankruptcy proceedings, winding up proceedings, or any other

equivalent proceedings, or its administrator or liquidator

respectively;

that a claim from an injured party has been received.

(2)

Where the Protection and Compensation Fund receives a

claim from an injured party resident in Malta, and the policyholder of

the vehicle causing the injuries is insured by an insurer, the said Fund

shall inform the insurer which is subject to winding up proceedings, or

any other equivalent proceedings, its administrator or liquidator

respectively, that a claim from an injured party has been received.

(1)

With regards to a claim that has also been

received by the Protection and Compensation Fund, an insurer subject

to winding up proceedings or any other equivalent proceedings, or the

administrator or the liquidator of the said insurer shall inform the

Protection and Compensation Fund in a timely manner, where the said

insurer, or their respective administrator or liquidator compensates or

denies liability.

(2)

With regards to a claim that has also been received by the

Protection and Compensation Fund, an insurer subject to winding up

proceedings or the administrator or the liquidator of the said insurer, or

any other equivalent proceedings, the said insurer, the administrator or

the liquidator of the said insurer shall inform the respective European

compensation body in a timely manner where the said insurer

compensates or denies liability.

(3)

With regards to a claim that has also been received by the

Protection and Compensation Fund, a European insurance undertaking

subject to bankruptcy proceedings, winding up proceedings or any

other equivalent proceedings, the said European insurance

undertaking, the administrator or the liquidator of the said undertaking

COMPENSATION FUND)

shall inform the Protection and Compensation Fund where it

compensates or denies liability of a claim.

(1)

Where the Protection and Compensation Fund

has received a claim from an injured party resident in Malta, it shall on

the basis of information which it holds, including any other

information provided by the injured party at the Protection and

Compensation Fund’s request, provide the injured party with a

reasoned offer of compensation or a reasoned reply, as provided in

sub-regulation (2), within three (3) months from the date that the

injured party would have submitted the claim for compensation in

accordance with regulation 29.

(2)

Where the Protection and Compensation Fund has

established that it is

(a)

liable to provide compensation pursuant to

regulation 27(2) (a) or (b), that the claim is not contested, and

the damages have been partially or fully quantified, the

Protection and Compensation Fund shall make a reasoned offer

of compensation; or

(b)

not liable to provide compensation pursuant to

regulation 27(2) (a) or (b), or where liability is denied or

liability has not been clearly determined or the damages have

not been fully quantified, the Protection and Compensation

Fund shall provide a reasoned reply to the points made in the

claim.

(1)

Where the Protection and Compensation Fund has

established that compensation is due and a reasoned offer of

compensation is made in accordance with regulation 33(2)(a), the

Protection and Compensation Fund, shall pay compensation to the

injured party without undue delay, and in any event within three (3)

months of the acceptance by the injured party of the reasoned offer of

compensation made in accordance with the said regulation.

(2)

Where the damage has only been partially quantified, the

Protection and Compensation Fund, shall apply the requirements

concerning the payment of the compensation set out in sub-regulation

(1), in respect of such partially quantified damage, and from the

moment of acceptance of the corresponding reasoned offer of

compensation.

(3)

The Protection and Compensation Fund shall not make

the payment of compensation under this regulation subject to any

requirements apart from those established in these regulations.

Furthermore, the Protection and Compensation Fund shall not make

the payment of compensation subject to the requirement that the

injured party establishes that the legal or natural person liable for the

COMPENSATION FUND)

accident, is unable to, or refuses to pay.

Where the policyholder of the vehicle causing the

injuries is insured by a European insurance undertaking which is

subject to bankruptcy, winding up proceedings or any other equivalent

proceedings, and the injured party is resident in Malta, and the

Protection and Compensation Fund has compensated the injured party

in accordance with regulation 34, the said Protection and

Compensation Fund shall be entitled to claim full reimbursement of

the sum paid by way of compensation, from the European

compensation body in the home Member State of the said European

insurance undertaking.

(1)

Where the Protection and Compensation Fund has

provided compensation to an injured party resident in Malta and the

policyholder of the vehicle causing the injuries is insured by a

European insurance undertaking which is subject to bankruptcy,

winding up proceedings or any other equivalent proceedings, the said

Fund shall be subrogated in the rights of the injured party against the

person who caused the accident or the said European insurance

undertaking

Provided that such subrogation shall not take place with

respect to rights against the policyholder or other injured person who

caused the accident in so far as the liability of the policyholder or of

the injured person would be covered by the European insurance

undertaking subject to bankruptcy, winding up proceedings or any

other equivalent proceedings in accordance with applicable national

law

Provided further that, to the extent that the European

compensation body shall reimburse the Protection and Compensation

Fund in terms of Articles 10a(10) or 25a(10), as the case may be, of

the Motor Insurance Directive, the right of subrogation shall be

assigned to the European compensation body, for any such sum so

reimbursed.

(2)

Any subrogation made by a European compensation

body in pursuance of Articles 10a(10) and 25a(10) of the Motor

Insurance Directive, shall be acknowledged and recognised by the

Protection and Compensation Fund.

(1)

The Protection and Compensation Fund shall have

the power to co-operate in due time with

(a)

European compensation bodies;

(b)

interested parties, including insurers, European

insurance undertakings subject to bankruptcy, winding up

proceedings or any other equivalent proceedings, its

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administrator or liquidator;

(c)

the European regulatory authority; and

(d)

bodies set up or authorised under Article 24 of the

Motor Insurance Directive;

at all stages during the proceedings referred to in this Part.

(2)

Cooperation in accordance with sub-regulation (1) shall

include requesting, receiving and providing information, including

details of specific claims, where relevant.

PART V

CONTRIBUTION AND COMPENSATION TO VICTIMS OF ROAD

TRAFFIC ACCIDENTS UNDER FUND D

(1)

In this Part, unless the context otherwise requires

''applicant'' means an injured party who applies for

compensation;

''Bureau'' means the association or other body established

by insurers carrying on a business of motor insurance with

which the Management Committee has made arrangements or

an agreement as provided in regulation 6(6);

''civil liability'' means any liability which may be

incurred in respect of the death of, or bodily injury to, any

person or in respect of any loss of, or damage to, any property

of any person which is required to be covered by a policy of

insurance in accordance with compulsory insurance legislation;

''compulsory insurance legislation'' means the Motor

Vehicles Insurance (Third-Party Risks) Ordinance, or any other

legislation substituting such law, and any regulations made

thereunder;

''debtor'' means a person responsible for the accident

which gave rise to civil liability;

''insurance'' means insurance against civil liability

effected by or under a policy of insurance, a cover note,

correspondence or any other means, whether or not a certificate

of insurance as required by compulsory insurance legislation

has been issued or delivered;

''judgement'' means a judgement of a competent court

having jurisdiction in Malta or in any Member state, which has

become res judicata.

COMPENSATION FUND)

(2)

To the extent of any powers and duties arising from any

arrangements or agreement entered into by the Management

Committee and the Bureau in accordance with regulation 6, ''Protection

and Compensation Fund'' in this Part shall include the Bureau.

An insurer carrying on a motor vehicle insurance liability

business in Malta shall pay a contribution to Fund D, of such amount

and at such time, as the Management Committee may determine,

taking into account the sums required, or expected to be required, for

the purpose of the said Fund. The contribution shall be utilised

exclusively for the payment of compensation relating to protected

liabilities to make payment of compensation to victims of road traffic

accidents in circumstances prescribed by these regulations.

(1)

Subject and without prejudice to the other

provisions of this regulation, ''insurer concerned'' means the insurer

who at the time of the accident which gave rise to a civil liability was

providing insurance against such liability in respect of the vehicle

arising out of the use of which the liability of the debtor was incurred.

(2)

An insurer is the insurer concerned notwithstanding that

(a)

the insurance was issued after the accident giving

rise to a civil liability but purported to be effective at the time of

such accident;

(b)

the insurance was obtained by fraud,

misrepresentation, non-disclosure of material facts or mistake;

(c)

a condition, description, limitation, exception or

some other term, whether expressed or implied, of the insurance

or of the proposal form on which it is based expressly or by

implication excludes the insurer’s liability whether generally or

in the particular circumstances which gave rise to the liability

of the debtor;

(d)

the debtor was in unauthorised possession of the

vehicle out of the use of which the liability of the debtor was

incurred;

(e)

the vehicle out of the use of which the civil

liability of the debtor arose was, at the time when the liability

was incurred

(i)

being used for a purpose not authorised

under the terms of the insurance; or

(ii)

being used by a person not authorised to

drive the vehicle under the terms of the insurance

Provided that an insurer shall not be considered as

COMPENSATION FUND)

the insurer concerned in the circumstances referred to in sub-

paragraph (ii), if the death, bodily injury or damage to property

is sustained by a person who voluntarily entered the vehicle

which caused such death, bodily injury or damage to property

when the insurer concerned proves that such person knew it was

uninsured; or

(f)

the driver of the vehicle out of the use of which

the civil liability of the debtor was incurred was, at the time

when the liability was incurred, disqualified from holding or

obtaining a licence to drive the vehicle or had his licence

suspended or had never validly held such licence.

(3)

An insurer is not the insurer concerned when

(a)

the insurance was cancelled before the date on

which the civil liability was incurred by agreement between the

insurer and the policy holder and with the prior written

permission of the Commissioner of Police;

(b)

the civil liability was incurred after the

cancellation of the insurance under a power of cancellation

clause or condition contained in such insurance and after notice

of such cancellation was given to the Commissioner of Police in

accordance with compulsory insurance legislation;

(c)

the insurance has ceased to be operative before the

date on which the civil liability was incurred by reason of a

transfer of interest in the vehicle which the insurance purports

to cover;

(d)

the civil liability was incurred after a decision

from a court having jurisdiction which has become res judicata

and declared the insurance void and, or unenforceable; or

(e)

the civil liability was incurred after the date on

which the insurance has lapsed.

(4)

For the purposes of these regulations, an insurer of a

motor trade road risk insurance covering unspecified vehicles shall, in

respect of such vehicles and irrespective of the basis of the insurance,

be the insurer concerned

(a)

in respect of vehicles not the property of the

insured, insofar as the vehicle in respect of which the claim

arises was in the custody or control of the insured or was only

removed from such custody or control without the authority of

the insured; and

(b)

in respect of vehicles which are at all times the

COMPENSATION FUND)

property of the insured except in respect of any vehicle

specifically excluded from the cover of the insurance by

reference to its registration mark and number, or specifically

insured in the name of the motor trader with another insurer

Provided that where an insurer concerned under a motor

trade risk insurance as aforesaid and an insurer concerned under a

specified vehicle insurance are both involved in circumstances in

which neither insurance is liable under its insurance, each of them

shall be liable jointly and severally for any amount due by way of

damages and costs in respect of any civil liability, such amount being

due in the internal relations between such insurers as to one half each.

(5)

Where a third country national entering Malta is insured

or holds a policy purporting to provide insurance against civil liability

and such insurance was lawfully issued in or from a country outside

Malta by an insurer, or a subsidiary or associated company of an

insurer, the company issuing the insurance shall be the insurer

concerned in the event of the person insured becoming a debtor.

(6)

For the purposes of this regulation, ''motor trade road risk

insurance'' means a policy of insurance provided to a person engaged

in the purchase, sale, repair, upkeep, servicing or maintenance of

motor vehicles which indemnifies him in respect of liabilities to third

parties arising out of the use of vehicles owned by him or in his

custody or control whilst being used on the road.

(1)

In cases where

(a)

a judgement in respect of any civil liability which

is required to be covered by a policy of insurance under

compulsory insurance legislation is given against any person

and;

(b)

either at the time of the accident giving rise to

such liability there is not in force a policy of insurance as

required by the said compulsory insurance legislation or such

policy of insurance is ineffective for any reason other than the

inability of the insurer to make payment; and, or

(c)

any such liability is not satisfied in full within

twenty-eight (28) days from the date the judgement may be

enforced,

in such cases, if there is no insurer concerned, the Protection

and Compensation Fund shall, subject to the provisions of these

regulations, make payments to the person in whose favour such

judgement was given, out of its funds set aside for utilisation for the

payment of compensation relating to protected liabilities

COMPENSATION FUND)

Provided that no payments shall be made under this

regulation where the judgement relates to a vehicle the use of which is

covered by a security, or instead of such security by a deposit, in

accordance with compulsory insurance legislation unless there is also

in force, in respect of such vehicle, a policy of insurance purporting to

cover such use of the vehicle.

(2)

Payment shall not be made in accordance with this

regulation unless the following conditions are satisfied

(a)

where the plaintiff has given notice of the

proceedings in which the judgement is given by registered post

or by means of a judicial letter, within seven (7) days after the

commencement of such proceedings

(i)

to the insurer, in any case in which there

was in force at the time of the accident a policy of

insurance purporting to cover the use of the vehicle, and

such fact was known to the said plaintiff; or

(ii)

to the Bureau in any other case;

(b)

the plaintiff has complied with all the

requirements of the Protection and Compensation Fund in

relation to any matter which may affect the payment of

compensation by the Protection and Compensation Fund in

accordance with these regulations;

(c)

the judgement and all rights thereunder have been

ceded to the Protection and Compensation Fund; and

(d)

the plaintiff in any of the aforesaid proceedings

had given credit to the Protection and Compensation Fund for

any amount paid to him by or on behalf of the defendant in such

proceedings with regard to any civil liability arising out of the

accident in respect of which compensation may be payable by

the Protection and Compensation Fund.

(3)

In the case of payments relating to damage to property

caused by an uninsured vehicle, the Protection and Compensation

Fund shall apply an excess of five hundred euro (€500) with respect to

each and every payment.

(1)

Without prejudice to any other practice which is

more favourable to the injured party, payment of compensation in

respect of civil liability to any person, caused by or arising out of the

use of a motor vehicle, other than payment of compensation falling

within the provisions of regulation 41, may be made out of funds set

aside by the Protection and Compensation Fund for the payment of

compensation relating to protected liabilities, if the following

COMPENSATION FUND)

conditions are satisfied

(a)

the applicant for payment is unable to trace any

person responsible for the civil liability;

(b)

the civil liability was caused in such

circumstances that on the balance of probabilities the

unidentified person would be liable to pay damages to the

applicant in respect of such civil liability;

(c)

the liability of the unidentified person to pay

damages to the applicant is one which is required to be covered

by insurance or security under compulsory insurance

legislation, it being assumed for this purpose, in the absence of

evidence to the contrary, that the vehicle was being used in

circumstances in which the user was required by the said

legislation to be insured or secured against third party risks;

(d)

the civil liability was not caused by the use of the

vehicle by the unidentified person as a weapon, that is to say in

a deliberate attempt to run down the deceased or injured person;

and

(e)

the application for compensation is made in

writing within two (2) years from the date of the occurrence of

the accident giving rise to the civil liability.

(2)

Where an application for compensation is made in

accordance with this regulation, the payment that may be made by the

Protection and Compensation Fund as referred to in sub-regulation (1)

shall be of such amount as a court in Malta applying Maltese law

would assess as damages which the applicant would have been entitled

to recover from the unidentified person in respect of such civil

liability, if proceedings to enforce a claim for damages in respect

thereof had been successfully brought by the applicant against the

unidentified person. The Protection and Compensation Fund shall only

be liable to pay up to such limits of liability as may be prescribed by

these regulations, under compulsory insurance legislation. The

Protection and Compensation Fund when assessing an application for

compensation shall

(a)

have the power to require any applicant to provide

such information as it may deem necessary for the purposes of

determining an application for granting compensation; and

(b)

on the basis of information provided at its request

by the applicant, give him a reasoned reply regarding the

payment of any compensation.

(3)

Payment in accordance with this regulation shall not be

COMPENSATION FUND)

made unless

(a)

the applicant has given all such assistance,

including information required under sub-regulation (2) as may

be reasonably required by or on behalf of the Protection and

Compensation Fund to enable any investigation to be carried

out; and

(b)

the applicant has assigned to the Protection and

Compensation Fund any right to any payment in respect of the

civil liability to which his application relates.

(4)

Payments relating to damage to property shall only be

made where the Protection and Compensation Fund has paid

compensation for significant personal injuries to any party injured as a

result of the same accident in which damage to property was caused by

the use of a vehicle by an unidentified person. In such cases, the

Protection and Compensation Fund shall apply an excess of five

hundred euro (€500) to be borne by the injured party suffering such

damage to property.

(5)

For the purposes of determining the conditions in which

personal injuries are to be considered significant, there shall be taken

into account, inter alia, whether the injury required hospital care.

(6)

The Protection and Compensation Fund shall determine

an application for compensation in accordance with this regulation

within three (3) months of receiving the information required to be

submitted under this regulation and if it refuses to effect

compensation, it shall inform the applicant in writing of the reasons

for its refusal.

In the case of an accident arising from the use of a stolen

vehicle or a vehicle obtained by violence and which gives rise to civil

liability, compensation by the Protection and Compensation Fund to

the injured party shall be made in the circumstances referred to in

article 12(3) of the Motor Vehicles Insurance (Third-Party Risks)

Ordinance

Provided that if the civil liability relates to damages to

property, the Protection and Compensation Fund shall apply an excess

of two hundred and fifty euro (€250) with respect to each and every

payment.

Payment for compensation in respect of civil liability

may not be made in accordance with these regulations where

(a)

at the time of the accident the person

(i)

being the owner of or being a person using

COMPENSATION FUND)

the vehicle, was using, or causing or permitting the

vehicle to be used, without there being in force in

relation to such use a policy of insurance or such security

as would comply with the compulsory insurance

legislation, knowing or having reason to believe that no

such policy or security was in force;

(ii)

was allowing himself to be carried in a

vehicle knowing or having reason to believe that the

vehicle had been taken without the consent of the owner

or other lawful authority, unless he believed or had

reason to believe that he had lawful authority to be

carried or would have had the owner’s consent if the

owner had known of the fact and the circumstances of his

carriage, or unless he had learned of the circumstances of

the taking of the vehicle after the journey had

commenced and he could not reasonably be expected to

alight from the vehicle; or

(iii) who sustained the death, bodily injury or

damage to property, voluntarily entered the vehicle

which caused such death, bodily injury or damage when

the Protection and Compensation Fund can prove that

such person knew it was uninsured;

(b)

pursuant to the Insurance Business Security Fund

Regulations 1986, repealed by the Protection and Compensation

Fund Regulations, the death or injury in respect of which

compensation would otherwise be payable occurred before the

1st of July, 1986.

Where the Protection and Compensation Fund is of the

opinion that an applicant is not entitled to compensation, in whole or

in part, in accordance with this Part, it shall communicate in writing

the reasons for its decision to the said applicant.

(1)

The competent authority may issue Insurance

Rules to insurers for the purposes of these regulations.

(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.

PART VI

MISCELLANEOUS

(1)

Notwithstanding any other provision of these

regulations

COMPENSATION FUND)

(a)

the Protection and Compensation Fund

Management Committee appointed by the competent authority

in regulation 5 of the Protection and Compensation Fund

Regulations, shall continue in office as if the Protection and

Compensation Fund Management Committee were appointed

by the competent authority under regulation 5 of these

regulations;

(b)

the agreement entered into with the Bureau by the

Management Committee under regulation 6(2) of the Protection

and Compensation Fund Regulations, shall also continue for all

intents and purposes of the law, as if the Management

Committee appointed in accordance with these regulations had

entered into the said agreement with the Bureau in terms of

regulation 6(4);

(c)

all assets and liabilities of the Security Fund,

transferred to the Protection and Compensation Fund by virtue

of the Act, which as from the date of coming into force of the

Protection and Compensation Fund Regulations have been kept

separate from other assets and liabilities of the Protection and

Compensation Fund, shall continue to remain separate in the

Protection and Compensation Fund established under these

regulations, and the administration of the assets and liabilities

which were kept separate in virtue of Protection and

Compensation Fund Regulations shall continue to be governed

by regulation 10 of the Insurance Business Security Fund

Regulations 1986 until all obligations of the Security Fund

under the 1986 Regulations are discharged in full;

(d)

once the obligations of the Security Fund which

were kept separate under the Protection and Compensation

Fund established under the Protection and Compensation Fund

Regulations and these regulations, have been discharged in full,

any remaining assets in the Security Fund established under the

1986 Regulations shall be aggregated to Fund D and continue to

be used under these regulations exclusively for the same

purpose which they were used under the Insurance Business

Security Fund Regulations 1986;

(e)

the assets of the Protection and Compensation

Fund established under the Protection and Compensation Fund

Regulations shall be aggregated to the assets of, and shall form

part of Fund A and, or Fund D established under these

regulations, as may be determined by the Management

Committee.

(2)

For the purpose of this regulation, ''Security Fund'' means

the fund established by article 26 of the Insurance Business Act, 1981,

repealed by the Act.

COMPENSATION FUND)

The Protection and Compensation Fund Regulations are

hereby repealed, without prejudice to anything done or omitted to be

done thereunder. Nothing in these regulations shall be deemed to affect

the liability in respect of any contribution or other payments or

obligations due or arising under the Protection and Compensation Fund

Regulations, prior to the coming into force of these regulations.

These regulations are being published in the English

language only in accordance with article 64(11) of the Act.