MFSA circular and feedback statement re amendments to PCC regulations

On 28^th March 2024 the Malta Financial Services Authority (the “MFSA”) issued a Circular and Feedback Statement on the amendments to the Companies Act (Cell Companies Carrying on Business of Insurance) Regulations (the “PCC Regulations”), a New Chapter 17 to the Insurance Rules titled ‘Cell Companies carrying on Business of Insurance’ and Amendments to Chapter 5 to the Insurance Rules.

The Circular and Feedback statement were issued following the publication of two Consultation Documents by the MFSA on 13^th September 2023 – the consultation period elapsed on 13^th October 2023. The MFSA reviewed the feedback received and discussed same internally, following which it published the Circular and Feedback Statement highlighting the comments raised by the insurance industry and the MFSA’s replies thereto.

The Consultation Papers, Circular and Feedback Statement primarily focus on the removal of non-recourse arrangements for pure captives and reinsurers, transfers of protected cells and liquidation of protected cells.

As for the way forward, the MFSA advised that the new Chapter 17 to the Insurance Rules will come into force when the amendments to the PCC Regulations come into force – once the PCC Regulations come into force, the MFSA will issue a Circular to inform the market of same. Furthermore, the amendments to Chapter 5 of the Insurance Rules will apply on the date of the publication of the above-mentioned Circular.

Author: Beppe Sammut