The Malta Financial Services Authority (MFSA) publishes a Dear CEO letter setting out the findings of supervisory inspections into how insurance and reinsurance undertakings compile their regulatory financial returns. The letter is addressed to the chief executive, chief financial and compliance officers of every authorised undertaking the authority supervises. The MFSA identified data quality in financial regulatory returns as one of its supervisory priorities in 2025, aligned with the European Insurance and Occupational Pensions Authority’s focus on the same topic. The inspections examined management accounts, national specific templates and quantitative reporting templates, along with end-to-end reporting processes covering data flows, governance arrangements, internal controls, information technology systems, data management frameworks and compliance functions. The authority notes that most undertakings submit returns on time and cooperate promptly when resubmissions are requested. It identified six areas where processes could be strengthened. On deadlines, undertakings told the authority that the five-week submission window was often considered overly restrictive and that limited resources left insufficient time to prepare periodic returns. The MFSA says that can lead firms to prioritise resolving blocking errors in quantitative reporting templates to meet deadlines, leaving non-blocking errors unresolved. It expects information to correlate across returns and for teams to be strengthened accordingly. The authority found high dependence on spreadsheets for significant financial statement line items and for compiling returns, which it says heightens the risk of human error and creates business continuity vulnerabilities. It expects undertakings to reduce that reliance, and to implement formal reconciliations where spreadsheets remain in use. The four-eye principle was not being applied consistently across certain processes, identified through a lack of formal preparer and reviewer review, or tasks managed by one individual without oversight. The MFSA expects each submission to be subject to a clear preparer and reviewer process with documented evidence. Only a few undertakings prepare internal checklists for completing returns. The authority also found instances where declaration forms, which identify the individual authorised to submit on the undertaking’s behalf, were not being submitted, and cases where outdated national specific template versions remained in use. Finance procedure manuals were not always updated to reflect changes in processes, and version control was not always in place. The authority expects manuals to be kept current, to name the personnel responsible for regulatory submissions, and to be subject to version control. On internal audit, the MFSA found the audit cycle did not always include the preparation, review and submission of returns, which it says allows weaknesses to go unnoticed. It expects ongoing involvement from the third line of defence in regulatory reporting, including data quality. The letter is signed by Christopher P. Buttigieg, chief officer supervision, and Ray Schembri, head of insurance and pensions supervision.
