Following the webinar organised by the Malta Financial Services Authority (the “MFSA” or the “Authority”) on 18 January 2023 - whereby the Authority introduced the proposed amendments to chapters 1, 2, 4, 8, 9 and 10 of the Insurance Distribution Rules to the insurance industry - the MFSA has now (26 January 2023) issued a consultation document on the proposed amendments together with the draft legislation.
In broad terms, the proposed amendments to chapters 1, 2, 4, 8, 9 and 10 of the Insurance Distribution Rules, as set out in the consultation document, include the following:
- Amendments relating to excess in relation to professional indemnity requirements and the governing law requirements of professional indemnity insurance policies;
- A new annex to Chapter 2 of the Insurance Distribution Rules will be introduced, laying down the minimum requirements that need to be included in a pre-enrolment course of a tied insurance intermediary and ancillary insurance intermediary;
- The pre-requisite to provide the Authority with a bank reference letter will be removed as part of the application forms for enrolment in the tied insurance intermediaries list and the ancillary insurance intermediaries list;
- The prior 10 working day notification requirement with respect to the entry into of credit risk transfer agreements with insurance undertakings will be removed;
- A new third schedule to Chapter 4 of the Insurance Distribution Rules will be introduced. This third schedule will contain a declaration form to be submitted by an enrolled individual or enrolled company prior to entering into a credit risk transfer agreement with an insurance undertaking;
- Certain amendments will also be made to the contents of the credit risk transfer agreement as set out in the second schedule to Chapter 4 of the Insurance Distribution Rules; and
- The value of the own funds of enrolled persons and the minimum paid up share capital of certain insurance managers will also be amended.
The public may access the consultation document and draft legislation through the following link: https://www.mfsa.mt/publication/consultation-document-on-the-proposed-amendments-to-the-insurance-distribution-rules/.
Camilleri Preziosi will be providing its comments and feedback in relation to the consultation document and draft legislation before the 8 March 2023 deadline. For further information or questions on the proposed amendments highlighted in the formal consultation document and draft legislation issued by the MFSA, kindly get in touch with Andrew Caruana Scicluna (andrew.caruanascicluna@camilleripreziosi.com) and Kyle Debattista (kyle.debattista@camilleripreziosi.com).
