The relationship between the MFSA and insurance services providers : the reporting aspects

Abstract

Purpose The study focuses on the relationship between the MFSA and Insurance service provider and the reporting relationship between the two. The research questions aim to provoke discussion into issues such as: 1) What gaps are currently in place due to reporting requirements and reporting processes of insurance companies?, 2) How do reporting requirements impact insurance companies in Malta?, 3)How successful was the 3rd pillar of Solvency II, in terms of attaining the regulator’s expectations? Design The research provides an understanding of how the current reporting system and the recent overhaul in regulatory reporting affected the industry. Literature review provides a good understanding of what the current regulatory systems entails. Nevertheless primary data analyses the current reporting system through questionnaires with participants representing the MFSA and other representing the industry. Findings The data collected showed that although the regulator and the industry were on the same page in terms of the expectations they had from the changes in reporting requirements, however not the same can be said when discussing the actual outcome from such changes. Conclusion Changes in regulatory reporting within the industry were awaited to be implemented both by the regulator and the industry. Nevertheless due to lack of training and increase in costs, the industry now provides a mixed perception on the benefits derived from these changes. Further the gaps observed between the opinion of the regulator and the insurance service providers may be attributable to lack of communication between the two which may have also led to wrong perceptions on the regulator from the industry’s eyes and vice versa. Therefore discussions between the regulator and the industry need to take place in order to understand each other’s position better. Further, the Maltese insurance industry requires more attention in order to be able to provide value adding information without carrying more weight than the typical Maltese insurance service provider can handle.