The Insurance Manager: an Overview of the Maltese Situation
Insurance Managers are deemed to fall within the category of Insurance Intermediaries which are regulated by the Insurance Distribution Act, Chapter 487 of the laws of Malta (hereinafter referred to as the Act), the Insurance Distribution Directive (EU) 2016/97and the Insurance Distribution Rules issued by the Malta Financial Services Authority (MFSA). The requirements of the Conduct of Business Rulebook are also relevant to the regulations.
In Malta, an insurance manager is deemed to be an ‘insurance intermediary’ which term is defined in the Act as referring to ‘any natural or legal person, other than an authorised insurance undertaking or an authorised reinsurance undertaking or their employees, and other than an ancillary insurance intermediary, who, for remuneration, takes up or pursues insurance distribution activities’.. Insurance distribution activities refer to the activities of introducing, proposing or carrying out other work preparatory to the conclusion of contracts of insurance, or of concluding such contracts, or of assisting in the administration and performance of such contracts of insurance. In the Act’s definition, the event of a claim is also included within such definition, including the provision of information concerning one or more contracts of insurance in accordance with criteria selected by the clients, through a website or other media. Furthermore, the compilation of an insurance product ranking list is included in the legal definition. This would include activities such as price and product comparison, or a discount on the price of a contract of insurance, when the client is able to directly or indirectly conclude a contract of insurance using a website or other media. The activities listed in paragraphs (1) to (5) of the Third Column of the Schedule to the Act, the distribution activities carried out by an authorised insurance undertaking and any other activities as may be prescribed are also included in the definition.
A natural or legal person is classified as an insurance manager under the Maltese Insurance Distribution Act provided the activities carried out are listed in the Schedule to the Act, namely:
- accepting an appointment from an insurer or reinsurer to manage any part of its business, or to exercise managerial functions therein, or to be responsible for maintaining accounts or other records of such insurer or reinsurer. Management includes authority to enter into contracts of insurance on behalf of the insurer or reinsurer under the terms of the appointment;
- accepting an appointment from an insurance broker enrolled under the Act, restricted to contracts of insurance relating to risks situated outside of Malta or commitments where Malta is not the country of commitment, to manage any part of its business, or to exercise managerial functions therein, or to be responsible for maintaining accounts or other records for the broker;and
- accepting an appointment from a reinsurance special purpose vehicle authorised in accordance with any regulations that may be made under the Insurance Business Act, to manage any part of its business, or to exercise managerial functions in relation thereto.
Registration or Enrolment of Insurance Managers in Malta
Insurance managers desirous of conducting insurance intermediaries activities, in or from Malta, must be registered in the Managers Register or enrolled in the Managers List which are maintained by the MFSA.
The Act binds the MFSA to determine an application for registration or enrolment within three months of receiving the information required to be submitted under the Act and any regulations or Insurance Distribution Rules. If the MFSA refuses to grant the registration or enrolment it is bound to inform the applicant in writing of the reasons for the refusal.
A certificate of registration or enrolment granted or an official copy thereof is to be prominently displayed by the insurance manager concerned at his or its place or places of business, in a part to which the public has access.
Setting up an Insurance Management company in Malta: The ‘Fit and Proper’ criteria
The criteria of Fitness and Properness of Insurance Intermediaries as defined in the Act applies to persons desirous of applying for registration in the Managers Register and to all qualifying shareholders, directors, controllers and all persons who effectively manage the affairs and carry out the activities of an enrolled person desirous of applying for enrolment in the Managers List .
