Please use this identifier to cite or link to this item: https://www.um.edu.mt/library/oar/handle/123456789/82404
Title: Insurance directive 12 : an evaluation
Authors: Schembri, Claudia (2007)
Keywords: Insurance -- Malta
Insurance -- Accounting
Insurance law -- Malta
Insurance -- Finance
Issue Date: 2007
Citation: Schembri, C. (2007). Insurance directive 12 : an evaluation (Bachelor’s dissertation).
Abstract: Insurance is a form of risk management primarily used to hedge against the risk of potential financial loss. It is the transfer of the risk of a potential loss from one entity to another, in exchange for a premium and duty of care. Given that insurance companies have certain responsibilities for the policy holders, for the general public and for the economy of a country, insurance is an economic activity which requires supervision. The main legislation enacted to regulate the Maltese insurance entities is the Insurance Business Act 1998 (IBA). The IBA provides for both supervision and regulation of the insurance sector, as well as for the establishment of a Competent Authority to regulate the market. The Malta Financial Services Authority (MFSA) is the single regulator for financial services, which along with insurance regulates banking and investment. One of the Insurance Directives issued by the MFSA is Insurance Directive 12: Business of Insurance Statements (ID12). This directive stipulates the insurance statements which have to be completed and submitted six months after year end by the insurance principals, agents and managers. The objective of this study is to evaluate the scope of the insurance statements included in ID 12, thereby analysing their effectiveness in regulating the industry. To have an enhanced evaluation, the regulator, the insurance operators and auditors were consulted. The main findings indicate that ID 12 is primarily used for statistical purposes although there are certain forms which are used also for regulatory purposes. Even though the regulator uses this Directive when monitoring the whole insurance market due to the fact that it illustrates the trends along different periods, ID12 is not the only tool used by the regulator. In fact ID12 alone is not enough for on-going monitoring and thus the regulator requires that insurance operators submit also quarterly or monthly management accounts and solvency statements. Although the regulator requires a lot of documentation, ID 12 is still very useful and effective. Almost all the insurance principals and insurance agents, although they consider ID12 to be costly at the initial stages and that it involves loads of work, believe that it is vital for the regulator to assess how the market is faring and even to compare between insurance companies. Some of the insurance companies deem that the information required by ID12 could also be used by the players themselves as part of the administration and management of their own business.
Description: B.ACCTY.(HONS)
URI: https://www.um.edu.mt/library/oar/handle/123456789/82404
Appears in Collections:Dissertations - FacEma - 1959-2008
Dissertations - FacEMAAcc - 1983-2008

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