Insurance Brokers in Malta
The Malta Financial Services Authority (“MFSA”) handles the registration and enrolment of insurance intermediaries including insurance brokers. The carrying out of insurance intermediaries activities is regulated under the Insurance Intermediaries Act, 2006 (the “Act”). Once the MFSA has issued its licence, the insurance brokerage companies would be enrolled in the MFSA “Brokers List”.
The MFSA also maintains registers of persons carrying on the insurance intermediaries activities of insurance brokers in the ”Brokers Register”. The qualifications required for a person to be entitled to be registered in the Brokers Register are as follows:
1. the applicant shall be an individual;
2. the applicant shall be a fit and proper person to be so registered and to ensure the company’s sound and prudent management;
3. the applicant shall possess the qualifications and fulfils or complies with the requirements as determined by the Act.
Furthermore, such registered broker must be a director or an employee of an enrolled company to be able to carry out insurance intermediaries activities.
As per the Act, Insurance Brokerage can be defined as professional activities of persons, acting with complete freedom as to their choice of lawful insurers, who bring together, with a view to the insurance or reinsurance of risks or commitments, persons seeking insurance or reinsurance and insurers or reinsurers. Insurance brokers carry out work preparatory to the conclusion of contracts of insurance or reinsurance and, where appropriate, assist in the administration and performance of such contracts, in particular in the event of a claim. Insurance brokers shall do everything which is reasonably possible to satisfy the insurance requirements of their clients and shall place the interests of those clients first.
Insurance Brokers in Malta operate under a very strict regulatory regime which requires insurance broking companies to have a minimum share capital of €58,234; to have in place a professional indemnity insurance cover of at least €1 million; to operate a “Business of Insurance Broking” bank account and to hold a fidelity bond of at least €11,467 where applicable.
An insurance broker company in Malta may also be converted to a Protected Cell Company (PCC) in terms of the Companies Act (Cell Companies Carrying on Business of Insurance) Regulations, 2010. Jatco Insurance Brokers PCC Ltd was converted to a PCC in September 2013, and was the first insurance brokerage company worldwide to obtain the licence for an insurance brokerage cell. The Company now has three insurance brokerage cells operating under its structure.
Foreign investors who would like to establish an insurance brokerage company or cell in Malta, will take advantage of a favourable regime which incorporates all EU financial services legislation. Consequently, operators will benefit from the single market passporting rights under freedom of services and freedom of establishment.
The benefits of having an insurance brokerage company or cell in Malta
1. Ability to intermediate policies directly into the EU and European Economic Area – Full EU membership enables Maltese brokers to dispense with the need for fronting companies into the EU/European Economic Area (EEA).
2. Effective and responsive regulation – Regulation is to EU standards while being flexible and responsive for which the most successful established insurance domiciles are favoured.
3. Established financial centre – Insurance, legal and accounting expertise is all available within Malta’s highly trained professional workforce.
4. Tax efficiency – Tax refund system that could be beneficial to foreign investors.
5. Malta has double taxation treaties with over 60 countries.
6. Migration from other jurisdictions – Regulations enable the easy relocation from other jurisdictions which have similar legislation.