On the 8th April 2015, the Malta Financial Services Authority (MFSA) issued the Insurance Business (Phasing-in) Regulations, 2015. These Regulations grant the MFSA power to issue approvals or permissions in relation to various matters, including group supervision, prior to the implementation of Solvency II. The Regulations consist of two stages of phasing-in with the matters listed in Regulation 3 coming into force on the 1st April 2015, whereas those listed in Regulation 4 shall apply from the 1st July 2015. Therefore insurance and reinsurance undertakings should consider which of the Solvency II approvals they may wish to use. However, the MFSA decisions or approvals in relation to both phasing-in stages will only become applicable on the 1st January 2016. This process ensures that the necessary approvals/permissions are in place on day 1 of Solvency II.

In order to supplement the above phasing-in Regulations, the MFSA has also issued a new Insurance Rule 33. This Rule came into force on the 8th April 2015 and adopts a number of European Insurance and Occupation Pensions Authority (EIOPA) guidelines which relate to the various approval processes and group supervision issues addressed by the Regulations. The majority of these EIOPA guidelines came into force on the 1st April 2015 but some will only become effective on the 1st January 2016.

The table below provides a description of the matters addressed in these Regulations and their effective dates.

 

1st April 2015

1st July 2015

Approval Processes

Permissions/Determinations

Ancillary Own Funds

Deduction of a participation

Classification of Own Funds

Calculation method of group solvency

Undertaking Specific Parameters

Determination on equivalence

Internal Models

Permission to apply rules of Articles 238/239 of the Solvency II Directive to subsidiary undertakings of re/insurance undertakings

Duration Based Equity-Risk Sub-Module

Determinations  when the parent undertaking is outside the Community and there is absence of Equivalence

Matching Adjustment to the Relevant Risk-Free Rate Term Structure

Application of Transitional Measures

Transitional measure on the Risk-Free  Interest Rates

Transitional measure on Technical Provisions

Group Supervision

Level and scope of Group Supervision

Identification of Group Supervisor

Establishment of a College of Supervisors

 

All the relevant documentation can be found by clicking on the headings below:

 

For more information contact Ms Tanya Causon, Regulatory Manager (Insurance), GANADO Advocates.