Transparency in insurance regulation and supervisory law of Malta

Abstract

One of the most notable economic pillars in Malta is undoubtedly the financial service industry. Over the years, the Mediterranean Island of Malta has managed to attract a fair share of international business amid superior economic growth. This financial services’ niche contributed to around 6% of gross value added in 2018, surpassing the EU average over a period of ten years (MFSA Annual Report, 2018). In addition, despite a challenging European economic environment, Malta registered an increase of 37% in non-life gross written premium (GWP) in the second quarter of 2019 (year-on-year), placing the country in the third highest guaranteed minimum pension/gross domestic product (GMP/GDP) (after Luxembourg and Belgium) in the EU28 for the second consecutive year.1 One of the reasons making Malta an investment domicile is its financial legislation and regulations, which hail from those of the European Union. Malta was one of the first few jurisdictions in the EU to legislate on virtual financial assets, and with little tangible business results so far, compared to its tremendous effort, rules and other regulatory initiatives were rolled out within a relatively short period of time, placing the island at the forefront of such an innovative niche of business. It may be observed that the insurance sector in Malta has proved rather resilient despite the many challenges relating to the last financial crisis and the current pandemic (COVID-19). As at the end of 2019, the total number of insurance undertakings totalled 70, up from 66 in 2018 and 63 in 2017. Moreover, the country has its own suite of indigenous regulatory frameworks, such as the Protected Cell Company (PCC) and Incorporated Cell Company (ICC) legislation, which makes it an attractive and somewhat advantageous location for insurance activities in Europe.