INSURANCE BUSINESS (APPROVED AUDITOR) REGULATIONS (approvedauditor)

INSURANCE BUSINESS (APPROVED AUDITOR)

SUBSIDIARY LEGISLATION 403.09

INSURANCE BUSINESS

(APPROVED AUDITOR) REGULATIONS

1st January, 2001

LEGAL NOTICE 105 of 2000, as amended by Legal Notices 426 of 2007,

145 of 2009 and 393 of 2015.

The title of these regulations is the Insurance Business

(Approved Auditor) Regulations.

(1)

In these regulations, unless the context otherwise

requires -

"the Act" means the Insurance Business Act;

"approved auditors list" means the list of audit firms acting as

approved auditor established and maintained under regulation 3;

"approved auditors register" means the approved auditors

register established and maintained under regulation 3;

''audit firm'' shall have the same meaning as is assigned to it by

article 2 of the Accountancy Profession Act;

''competent authority'' means the Malta Financial Services

Authority established by the Malta Financial Services Authority

Act;

"Insurance Rules" has the same meaning as is assigned to it by article

2 of the Act for the purposes of carrying into effect certain provisions of

article 21 of the Act and of these regulations,

and the words and expressions which are also used in the Act have

the same meanings as in the Act.

(2) In these regulations any reference to an ''insurance

undertaking'' shall be deemed to be a reference to an authorised

insurance undertaking or authorised reinsurance undertaking which

has received authorisation pursuant to article 7 of the Act to carry

on business of insurance in or from Malta, or in or from a country

outside Malta, or a person enrolled in the Agents List, Managers

List or Brokers List in terms of the Insurance Distribution Act.

The competent authority shall establish and maintain -

(a) a register of individual persons authorised to act as

approved auditor, in these regulations referred to as

"the approved auditors register", and

(b) a list of audit firms authorised to act as approved

auditor, in these regulations referred to as "the

approved auditors list",

in every case, containing the names, principal places of business

and such other particulars as the competent authority may, from

time to time, by Insurance Rules determine, of all persons and audit

firms who are entitled under these regulations to be registered in

INSURANCE BUSINESS (APPROVED AUDITOR)

the approved auditors register or enrolled in the approved auditors

list in the manner determined for such purpose by Insurance Rules.

(1) No person who is qualified to be an auditor in

accordance with the Companies Act shall accept an appointment to

audit insurance undertakings accounts unless that person holds an

authorisation to act as approved auditor issued by the competent

authority under these regulations.

(2) Any individual person who holds a warrant to act as auditor

issued under the Accountancy Profession Act and satisfies the

qualifications determined for such purpose by Insurance Rules and

any audit firms duly registered under the said Act which satisfies

the requirements determined for such purpose by Insurance Rules

may make application in writing to the competent authority in the

form and manner determined for such purpose by Insurance Rules

and providing the information required to be provided therein for

the issue under these regulations of an authorisation to act as

approved auditor.

(3) Any person who acts in contravention of the provisions of

sub-regulation (1) shall be guilty of an offence and shall be liable

on conviction for each offence, in respect of the first offence to a

fine (multa) not exceeding one thousand and two hundred euro

(€1,200) and in respect of a second or subsequent offence to a fine

(multa) not exceeding six thousand euro (€6,000), and in the case

of a continuing offence, to an additional fine (multa) not exceeding

one hundred and twenty euro (€120) for each day during which the

offence continues.

(1) The competent authority may under these regulations

grant an applicant authorisation to act as approved auditor only if it

is satisfied, on the basis of the information provided by the

applicant under these regulations and any information received by

it, that authorisation ought to be granted.

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

regulations, the competent authority may subject any authorisation

issued or held under these regulations to such conditions and

limitations as it may, from time to time, deem fit to impose.

(3) On granting an applicant authorisation to act as approved

auditor under these regulations, the competent authority shall -

(a) in the case of an applicant who is an individual,

register the applicant in the approved auditors register;

and

(b) in the case of an applicant which is an audit firm, enrol

the applicant in the approved auditors list.

(4) Any person who, for the purpose of obtaining an

authorisation under these regulations, gives any wrong information

or otherwise acts in a deceitful or fraudulent manner, or any person

who fails to comply with any condition or limitation imposed in the

authorisation by the competent authority under subregulation (2),

shall be guilty of an offence and shall be liable on conviction for

each offence to a fine (multa) not exceeding one thousand and one

hundred and sixty-four euro and sixty-nine cents (€1,164.69) or to

INSURANCE BUSINESS (APPROVED AUDITOR)

imprisonment not exceeding six months or to both such fine and

imprisonment.

(1) The competent authority may, at any time, suspend or

revoke an authorisation issued or held under these regulations if

(a) the person, in applying for the authorisation, has given

any false or incorrect information which was material

to the application referred to in regulation 4 or has

obtained otherwise the authorisation by fraud or

misrepresentation;

(b) the person has failed to fulfil or comply with the

requirements prescribed by these regulations or as

determined by Insurance Rules or any of the terms,

conditions or limitations attached to the authorisation;

(c) the person has shown incompetence in the conduct of

his responsibilities under the authorisation or has in

any manner acted fraudulently, or dishonestly or

otherwise in such manner as to cease to be

trustworthy;

(d) the warrant to act as auditor issued to the person under

the Accountancy Profession Act is suspended or

revoked under that Act, or the registration of an audit

firm under that Act is suspended or cancelled

thereunder;

(e) at any time, in the case of an audit firm, no longer has

any two partners/directors, or any one partner/director

and one employee, who hold an authorisation to act as

approved auditor;

(f) the person who holds an appointment to audit

insurance undertakings accounts is no longer covered

by an indemnity insurance contract for the amount

specified in Insurance Rules; and

(g) the person is disciplined or convicted under any

provision of these regulations.

(2) The name of an individual person or audit firm whose

authorisation is revoked under these regulations shall be struck off

the approved auditors register or the approved auditors list, as the

case may be, and a name struck off the register or the list shall be

restored thereto only where the revocation is declared void and of

no effect by order of the Financial Services Tribunal on an appeal

made to it by the aggrieved person under article 58 of the Act.

(3) Without prejudice to anything contained in any other

provision of the Act, the competent authority may at any time

suspend or revoke an authorisation issued or held under these

regulations and strike off the name of the approved auditor from the

approved auditors register or the approved auditors list, as the case

may be, if such approved auditor fails to pay the annual supervisory

fee, when due, to continue to act as an approved auditor.

(4) The competent authority may, after the expiration of one

year from the date of revocation of an authorisation, issue a fresh

INSURANCE BUSINESS (APPROVED AUDITOR)

authorisation under the provisions of these regulations.

(1) Without prejudice to any other action which the

competent authority may consider appropriate under any provision

of the Act or these regulations, where, in the circumstances

specified in regulation 6, the competent authority intends to

suspend or revoke an authorisation issued or held under these

regulations, it shall give the person concerned notice in writing

specifying the reasons for its intention to do so.

(2) Every notice given under sub-regulation (1) shall state that

the person concerned may, within such reasonable period after the

service thereof as may be stated in the notice (being a period of not

less than forty-eight hours and not longer than thirty days), make

representations in writing to the competent authority giving reasons

why the authorisation should not be suspended or revoked and the

competent authority shall consider any representations so made

before arriving at a final decision.

(3) The competent authority shall notify in writing its final

decision to the person concerned and, where the authorisation is

revoked, the notification shall also state that the name of the person

concerned has been struck off the approved auditors register or the

approved auditors list, as the case may be.

(1) The competent authority shall by Insurance Rules

determine the arrangements governing the audit of insurance

u n d e r t a k i n g s a c c o u n t s a n d d i ff e r e n t a r r a n g e m e n t s m a y b e

determined with respect to the audit of different insurance

undertakings accounts.

(2) Any person who acts as approved auditor and holds an

appointment to audit insurance undertakings accounts who fails to

satisfy any arrangement as determined by the directive for the

purposes of this regulation shall, without prejudice to any action

which the competent authority may take against that person under

regulation 6, be guilty of an infringement against this regulation

and shall be liable for each infringement to an administrative

penalty of not less than one hundred and sixteen euro and forty-

seven cents (€116.47) and not exceeding two hundred and thirty-

two euro and ninety-four cents (€232.94).

For the purposes of these regulations, a person shall not be

deemed to act as approved auditor if he acts simply as an employee

of, or assistant to, a person or audit firm who acts as approved

auditor and does not issue any accounting or financial statements

over his name.