Captive Insurance Times domicile profile article

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06 August 2014

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Malta

Over the last decade Malta has developed a financial services legal infrastructure, extending into insurance and reinsurance activities, including captive companies, which has placed it among Europe’s foremost players in this sector.

Malta possesses a competitive tax regime supported by a broad network of double taxation treaties and it remains a comparatively low cost jurisdiction; in addition to other factors such as its strategic location, a high calibre human resources pool and an excellent IT and communications infrastructure. Besides these attractions, other factors improve the island’s competitiveness, inlcuding the fact that 95 percent of the population is English speaking; legislation including insurance law is based on the English legal system; the local regulator is accessible (firm but flexible); and global audit and advisory firms are present on the island.

However, the most striking element that has made the island an ‘attraction’ to multinational operators and household names in the insurance and insurance management industry is undoubtedly the advantages that the country has been able to reap from being small, namely flexibility, accessibility, responsiveness and being customer focused. At Island Insurance Management (IIM), we witness the interplay of such advantages primarily during a company’s feasibility, pre-licensing and licensing process and as well throughout an entity’s ongoing operation.

As insurance managers, we place tremendous value on the relationship we build with our captive clients. We believe that, by basing a relationship on trust, we can give our clients the best service possible. We believe that this is the only way we can provide the support in the successful management and operation of the captive company, whether it’s day-to-day activities, strategic management decisions or regulatory requirements.

IIM was formed in 2007 as a subsidiary of a larger local insurance and financial services group, with the intention of participating in Malta’s development as a domicile of choice within a respected financial services jurisdiction for captive insurance operations.

The group was established in 1989 as an insurance broking operation to handle commercial and industrial clients. The directors and officers of IIM possess more than 30 years of industry experience and use this to guide their clients through the captive formation process, from feasibility studies to licensing and operation. In view of the diverse experience held, IIM as an insurance manager, can support the typical insurance company functions that a captive requires.

Such functions include underwriting, premium and rate determination, premium invoicing, policy development and issuance, claims handling, cash and investment management, company secretary services, financial reporting and all the regulatory reporting including communication.

As insurance managers, we are committed to:

Developing and maintaining a high quality book of business using skilled, qualified and professional staff;

Understanding the client’s needs and problems to offer solutions;

Creating and maintaining a team spirit within our own organisation and good communication with our clients and markets;

Offering creative and imaginative solutions to keep pace with the rapidly changing world;

Maintain our independence from insurance suppliers in order to act in our clients’ best interests;

Negotiate and act on behalf of the client fairly, promptly and efficiently; and

Be pragmatic and create the drive within our own skilled personnel to provide a superior service all round.

Our insurance management services practice areas comprise of:

Consulting services

Our consulting services are a key part of insurance management offering wherein we provide planning stage feasibility consulting and post incorporation consultancy to support our clients. Such services include:

Pre-feasibility assessment;

Cost benefit analysis;

Development of pro-forma financial statements;

Business plan development; and

Identification and selection of service providers.

Licensing and company registration

Preparation of licence application to the authorities;

Preparation of memorandum and articles of association;

Incorporation of the captive;

Provision of a registered office; and

Appointment of auditors, bankers and legal advisors.

Corporate services

Appoint IIM representatives to serve as company secretary, directors and officers when required;

Preparation of management reports;

Submission of regulatory information to the local regulatory authorities;

Compliance with the laws of Malta;

Provision of secretarial support including all matters related to preparation for board meetings;

Coordination of board meetings and provision of facilities; and

Coordinate the provision of other services required in the conduct of business such as auditors, legal and tax advisors and investment managers.

Accounting and finance

Maintenance of prime books of accounts;

Preparation of periodic management accounts;

Liaison with clients’ auditors for preparation of annual financial statements;

All books of accounts and presentation statements in line with International Financial Reporting Standards;

Prepare and make arrangements for the filing of premium tax returns where necessary; and

If empowered to, maintain bank accounts, handle cash receipts and disbursements, and perform such other cash handling functions as may be required by the client,

Insurance

Maintenance of underwriting and claims records;

Arrangement and service of reinsurance programmes;

Preparation and review of policy documentation;

Issuance of policies and/or certificates of insurance; and

Liaison with insurance brokers.

Regulatory compliance

Make available our close relations with the insurance regulator at the service of the client;

Prepare and file all reports and returns required under local insurance law;

Prepare and maintain any other documentation required for compliance purposes;

Represent the client during regulatory visits by the Insurance regulator and/or any other;

Applicable regulatory authorities; and

Respond to all inquiries and correspondence from regulatory authorities after prompt notification to the client.

Our clients are entities that may benefit from captive insurance services such as multinationals with worldwide operations, particularly those with EU locations; companies paying significant employers’ liability and motor third party premiums; companies susceptible to product and general liability; companies already using captives to provide insurance to their customer base, eg, travel, warranty, credit protection; and existing insurance companies hoping to exploit the possibility offered by the Malta domicile for the setting up of their own reinsurance function.

IIM is committed to be an independent provider of insurance management services, so we are free of any restrictive ties to larger corporate interests.

We are large enough to meet and service our clients’ needs, however, our smaller size makes us more flexible and dynamic.

We are quick to respond to the needs and circumstances of our clients. We can confidently say that the smaller size of IIM holds very similar advantages that make the island an attractive domicile.

For more information, please contact us via email: info@islandins.com or visit our website: www.islandins.com