Insurance: Post-licensing Compliance
The Malta Financial Services Authority (MFSA) which is the Maltese regulatory and supervisory as regards the business of insurance requires that every insurance company, protected cell company, incorporated cell company and every branch of a company whose head office is in a country outside Malta which is desirous of applying for authorisation to carry on business of insurance in or from Malta is to identify an individual who will act as an Insurance Compliance Officer.
An applicant company must conduct its own due diligence checks on the proposed individual and notify in writing the MFSA of the proposed appointment. The MFSA will invariably revert to confirm that the proposed individual understands the responsibilities attached to the compliance role and accepts the proposed appointment.
The MFSA requires very high standards of conduct and compliance from all licensed companies. A breach of any condition of authorization, evidence of bad faith, lack of care and concern for the interests of policyholders, potential policyholders and the general public, deceptive acts and behaviour, and incompetence are considered to be serious matters of non-compliance.
Malta Insurance Compliance Officers: Responsibilities
The Insurance Compliance Officer’s responsibilities are as defined as follows:
- The Insurance Compliance Officer is responsible for all aspects of compliance and the licensed company’s adherence to all the applicable insurance legislation, rules and licence conditions;
- The Insurance Compliance Officer is expected to exercise independent judgement and to exercise proper day-to-day supervision and control over the activity of the Company;
- The Insurance Compliance Officer must familiarise himself thoroughly with Insurance Legislation and the conditions of authorization and take the steps to ensure that the company’s staff are familiar with those conditions that are relevant to their role within the Company. The CO must be aware in particular of the Insurance Business (Criteria of Sound and Prudent Management) Regulations, 1999 which require the Company to have adequate operational, administrative and financial procedures and controls to ensure compliance with the regulatory requirements and to supervise the activities of its tied insurance intermediaries;
- The Insurance Compliance Officer is expected to not to breach, or to permit breaches by others, of internal control procedures and systems or conditions of authorisation to which the company is subject;
- The Insurance Compliance Officer is expected to draw the attention of the person concerned and, where appropriate, to the attention of the board of directors upon becoming aware of any breaches;
- The Insurance Compliance Officer is expected to record in writing any breaches and course of action taken as a result;
- The Insurance Compliance Officer is expected to notify the Authority of any breach of conditions of the company’s authorisation upon being aware of such a breach;
- The Insurance Compliance Officer is to ensure, as far as possible, that incorrect or misleading information is not provided deliberately or recklessly to it, either in supervisory returns or in other way.
Insurance Compliance Officers in Malta: Our Services
Chetcuti Cauchi Advocate's services are not solely limited to assisting clients in obtaining the required investment services licence from the MFSA within the licensing project management sphere. Chetcuti Cauchi Advocates also offers post-licensing services which includes the compliance function. Our post-licensing compliance service gives our clients access to a team of experienced lawyers and accountants dedicated to ensuring that all compliance matters are duly attended to. Assistance is provided in the preparation of regulatory returns, the drafting of policies and reports, the fulfilment of statutory notification requirements and advice is granted as to the legal issues underpinning the compliance function and its ensuing responsibilities.
