Financial Services in Malta
Stockholm – 5th October 2011
Overview
Currency: Euro (€)
EU Member: May 2004
Unemployment Rate: 6.4% (June 2011) – EU 10%
GDP growth: 2.5% (anticipated 2011)
Inflation: 2.3% (August 2011)
Economic sectors: Services (73%) Industry (24%)
Agriculture (3%)
Main trading partners: Italy, Germany, UK
Sovereign rating: A2 (Moody’s – Sept 2011)
Key Facts
Licensed Insurance operators
Currently 14 licensed insurance managers including
the major international players
Currently 7 licensed PCCs, of which 3 write business
through the Core, and which operate 16 cells writing
business in and outside of Malta.
Currently 28 insurance companies licensed in Malta
but operating outside of Malta
Currently 10 licensed Captive insurance and
reinsurance companies
Licensed Insurance operators
Of these 37 are fully or partly managed by insurance
managers
12 are fully or partly self managed
The cells are all managed by insurance managers
Total premium volumes for 2010 were €923million
Some large names: BMW, Vodafone, Renault, Peugot,
Munich Re to name a few
Insurance Regulations•
• The Insurance Business Act, 1998 and the variousRegulations and Directives issued in terms of the Act
• Insurance Business (Companies Carrying on Business ofAffiliated Insurance) Regulations, 2003 makes specificprovisions for captive companies;
• MFSA Insurance Rule 21 of 2003 on Business of AffiliatedInsurance determines the risk that may be insured bycaptive companies;
Insurance Regulations•
• Insurance Business (Continuance of Companies carrying onBusiness of Insurance) Regulations, 2003 governs theredomiciliation process for insurance companies.
• The Companies Act (Cell Companies Carrying on Business ofInsurance) Regulations, 2004 and 2010 provide theregulatory regime for Protected Cell Companies (PCCs)and Incorporated Cell Companies (ICCs).
Minimum Capital: €2.3m but €3.5m in respect of Life,
Liability, Credit & Guarantee classes, Reinsurance captives
€1.1m
Own Funds: the components making up the own funds
must consist of:
• at least 50% as paid up share capital
• the remaining 50% can be a mixture of reserves, share
capital (including preference shares), subordinated loans
and retained profits
Insurance Regulations
Insurance Regulations
The Insurance licence holder must meet the following
criteria on an on-going basis:
• Fit and proper criteria
• Sound and prudent management
• Financial soundness;
Insurance Regulations
Other criteria to be met are:
• Own funds
• Margin of Solvency
• Technical Provisions
• Minimum guarantee fund
• Submission of annual audited accounts
• Adherence to Prevention of Money Laundering
Act
Solvency: Currently in accordance with EU Solvency I
Directive, higher of MGF and 18% (27% in the case of liability
business) of premium written or 26% (39% in the case of
liability business) of claims incurred over a rolling 3 year
period. Companies can take credit for reinsurance when
calculating their RMM (up to 50%).
The MFSA currently requires a buffer of 150% over the RMM
where the RMM is higher than the MGF
Insurance Regulations
Reserves: Insurance companies are required to maintain
adequate technical provisions covered at all times by
equivalent admissible assets
Taxation: Insurance companies are subject to the normal
corporate tax rate of 35%. However under the Maltese
imputation system, on distribution of dividends, the
shareholder is entitled to a 6/7th refund of the tax paid by
the company.
Insurance Regulations
Benefits
• Passporting rights to carry on life and non-life insurance
and reinsurance business in other EU/EEA member
states;
• Knowledgeable and accessible regulatory body;
• Comparatively lower costs;
• Experienced professional workforce
• Excellent telecommunications infrastructure;
• Efficient application and approval process;
• PCC/ICC/Migration legislation;
Benefits
• Favorable tax system approved by the EU (on the
OECD White List) including a network of over 50
double tax treaties;
• Availability of regulated insurance managers to
outsource insurance back-office functions;
• No entrance or exit barriers
Benefits
Insurance Managers
• Workforce experienced in insurance business –
underwriting, claims handling, accounting, Regulatory
matters
• Very good working relationship with the MFSA
• Opens doors in doing business in Malta
• Cost efficient
• Economies of scale
Benefits
Target Market and feasibility Studies
• Regulatory environment
• Market specific analysis
• Penetration option analysis
• Feasibility studies
• Business plans
Services
Captive Feasibility Studies
• Business strategy
• Assess risks
• Limits and risk appetite
• Assess reinsurance needs
• Cost benefit analysis
• Tax analysis
Services
• Licensing and Company registration
• Underwriting, claims handling, reinsurance reporting
• Accounting and Finance
• Company Secretariat
• Compliance/MLRO
• Risk Management
• Solvency II
• Administration
Services
THANK YOU
www.bee.com.mtwww.mima-malta.com