INSURANCE IN MALTA
Over recent years¸ Malta has built up a reputation for innovative financial services and products. Building on the country’s EU membership and a carefully crafted programme of legislative and regulatory reform¸ the country has proven attractive for companies that want to self-insure or reinsure through captives¸ or cells of Protected Cell Companies. Malta’s insurance industry has seen exorbitant growth in recent years. Insurance business is a licensable activity in Malta. To date¸ 52 insurance vehicles have been licensed in Malta¸ of which 10 are captive insurance or affiliated insurance companies¸ and seven are Protected Cell Companies (PCCs). Only eight insurance companies licensed in Malta are active in the local market¸ a figure that reflects the international orientation of Malta’s insurance sector. One
insurance broker has also converted to the PCC model in 2011.
Star performer insurance sector: key reasons for Malta’s success
The insurance sector is one of the star performers of Malta’s financial services industry. A number of Fortune 100 companies already have captives in Malta¸ among them multinationals such as BMW¸ Peugeot¸ Citroen and Vodafone. The key to Malta’s success in this sector lies in its EU membership¸ which allows companies licensed in Malta to write business in any of the other member states.
- EU and EEA Passporting Rights
The majority of insurance vehicles were established in Malta after the country joined the European Union. Due to the passporting regime¸ insurance companies as well as brokers and other intermediaries can offer their services in any other EU or EEA member state. This has added to Malta’s attraction as an insurance domicile and has attracted insurers seeking a more cost-effective jurisdiction as well as non-EU insurance companies or intermediaries seeking to tap into the EU insurance market. They can provide insurance directly across Europe avoiding fronting costs and collateral requirements.
- Variety of insurance structures
Maltese law recognises the differing requirements of business operators and provides a framework for general insurance business and captive insurance. Captive insurance companies¸ which are referred to as ‘Affiliated Insurance Companies’ (AICs) under Maltese law¸ enjoy a fast track application procedure and have attracted international companies wishing to selfinsure or reinsure. Malta is also the only full EU member state with legislation that allows for Protected Cell Companies (PCC) and Incorporated Cell Companies (ICC). Both structures allow companies to write risks through cells within the core company and provide businesses a cost-effective alternative to setting up a stand alone insurance company.
- Solid legal foundation
As a result of Malta’s colourful history¸ the country’s legal system is rooted both in the An