Passport Rights

A Maltese insurance undertaking which is seeking to provide services in a European Union member state or an EEA state in exercise of a European right must submit to the Authority a notice of intention.

The particulars to be included in such notice are those specified in Insurance Rule 25 of 2009 - Exercise of Passport Rights by Maltese Insurance Undertakings - Services or Insurance Rule 24 of 2009 - Exercise of Passport Rights by Maltese Insurance Undertakings - Establishment reproduced below.

Exercise of Passport Rights - Services:

  1. The member state or EEA State in which it intends to operate;
  2. The nature of the commitments it proposes to cover, or the risks which it proposes to undertake in the member state or EEA State concerned;
  3. Where the Maltese insurance undertaking proposes to carry on business of insurance in the member state or EEA State covering risks relating to Class 17 – Legal Expenses it is to specify the arrangement chosen from those described in Article 6 of Insurance Rule 19 of 2008 – Legal Expenses Insurance. MFSA rules may be viewed by clicking on the following: Insurance Rules - Malta
  4. Information relating to the resources available in order to provide successfully the business of insurance relating to Class 18 – Assistance.
  5. Where the Maltese insurance undertaking proposes to carry on business of insurance in the member state or EEA State covering risks relating to class 10 – Motor Vehicle Liability it is required to provide the authority with:
    1. The details of the undertaking’s membership or a certificate of application for membership of the national bureau and the national guarantee fund in the Member State or EEA State of the provision of services:

      Provided that, where a Maltese insurance undertaking provides the Authority with a certificate of application for membership, the Authority shall obtain from the undertaking a commitment that it will not engage in business concerning this class as long as it has not forwarded the final membership declaration.
    2. The name and address of the representative appointed in the Member State or EEA State of the provisions of services.

Within one month of the date on which the Authority receives the complete notice of intention, it may give a consent notice to the foreign authority of the provision of services and inform the undertaking concerned.

Exercise of Passport Rights - Establishment:

A1. General Information

Details relating to the branch of the Maltese insurance undertaking shall include the following:

  • The address of the branch in the Member State or EEA State from where documents may be obtained from the undertaking, to which they may be delivered and to which all communications to the general representative are to be sent;
  • The business telephone and fax number/s in the Member State or EEA State of the branch, including any website or e-mail address.

A2. The general representative

Details relating to the general representative shall include:

  • The name of the general representative;
  • A copy of the appointment of the general representative who must possess sufficient powers to bind the insurance undertaking in relation to third parties and to represent it in relations with the authorities and courts of the Member State or EEA State of the branch;
  • A Personal Questionnaire (“PQ”) in the form set out in Insurance Rule 15 of 2008 is to be submitted, unless previously submitted to the Authority in connection with some other role. In such instances, the individual should submit a confirmation as to whether the information included in the PQ previously submitted is still current, and indicating any changes or up-dates thereto.

A3. Scheme of operations

A scheme of operations, indicating in particular the type of operation envisaged, relating to the business of insurance to be carried on from the branch should set out, amongst other things, the following information:

  • The class or classes of long term business or class or classes or part classes of general business the branch proposes to carry on;
  • The nature of the risks or commitments the branch proposes to cover in the Member State or EEA State concerned;
  • The guiding principles as to reinsurance of business to be carried on in the Member State or EEA State concerned, including details of the undertaking’s maximum retention per risk or event after all reinsurance/retrocession ceded, by principal category of business undertaken;
  • Details of the principal reinsurers/retrocessionaires of the business to be carried by the branch in Member State or EEA State concerned, including name, address and country of incorporation;
  • Copies or drafts of:
    1. Reinsurance treaty cover notes covering business to be written by the branch in the Member State or EEA State concerned;
    2. Any standard agreements which the branch intends to enter into with insurance brokers or agents in the Member State or EEA State concerned;
    3. Any agreements which the branch will enter into with persons (other than employees of the Maltese insurance undertaking) who will manage the insurance business to be carried on in the Member State or EEA State of the branch;
  • Estimates of forecast expenses, including an estimate of the costs of installing the administrative services and organisation for securing business and the financial resources intended to cover those costs, and, in relation to general business class 18, the resources available for providing the assistance;
  • A description of the proposed sources of business of insurance (e.g. insurance brokers, agents, direct selling and tied insurance intermediaries) and the approximate percentage expected from each source;
  • For each of the first three financial years following the establishment of the branch:
    1. Estimates relating to expenses of management (other than costs of installation) and in particular to current general expenses and commissions;
    2. Estimates of premiums or contributions and of claims in respect of direct business and reinsurance acceptances (gross and net of reinsurance cessions);
    3. Estimates relating to the financial resources intended to cover underwriting liabilities;
    4. A forecast statement of the undertaking’s margin of solvency, identifying clearly the computation of the required margin of solvency;
    5. In respect of long term business, in addition to the above:
the number of contracts or treaties expected to be issued;
the total sums assured or the total amounts of annuity per annum;
the total premium income, both gross and net of reinsurance ceded;
detailed estimates, on both optimistic and pessimistic basis, of income and expenditure in respect of direct business, reinsurance acceptances and reinsurance cessions;
the technical bases that the actuary who will be appointed for the purposes of article 22 of the Act proposes to employ for each class of business to be carried on from the branch, including the bases needed for calculating premium rates and mathematical reserves;
a statement by the actuary so appointed, stating whether he considers that the premium rates which will be used in the Member State or EEA State of the branch are adequate;
a statement by the actuary so appointed, stating whether he agrees with the information provided under paragraphs (c), (h)(iii) and (h)(v)(dd) under heading A3 of article 5 above
the technical bases that the actuary used to calculate the estimates referred to in paragraphs (h)(iii), (h)(v)(aa) to (h)(v)(dd) under heading A3 of article 5 above.