S.L. 281.7 чл. 3Interpretation. 

(1) In these regulations, unless the context otherwise requires:

"the Act" means the Accountancy Profession Act;

"ancillary insurance undertaking" means an authorised insurance undertaking writing contracts of insurance referred to in regulation 3(a) to (c) of the Insurance Distribution

(Exemption) Regulations that have a contract boundary of up to twelve (12) months;

"ancillary reinsurance undertaking" means an authorised reinsurance undertaking writing business restricted to the reinsurance of contracts of insurance referred to in regulation

3(a) to (c) of the Insurance Distribution (Exemption)

Regulations that have underlying insurance contracts that have a contract boundary of up to twelve (12) months;

"authorised insurance undertaking" means an undertaking whose head office is in Malta and has received authorisation pursuant to article 7 of the Insurance Business Act to carry on direct general insurance business and, or long term insurance business, and includes an undertaking authorised to carry on direct insurance and reinsurance business;

"authorised reinsurance undertaking" means an undertaking whose head office is in Malta and has received authorisation pursuant to article 7 of the Insurance Business Act

*These regulations shall apply to financial reporting periods commencing on or after 1st January 2025. regulation 1(2) of Legal Notice 299 of 2025. Vide PRINCIPLES IN RESPECT OF CERTAIN ELIGIBLE 281.07 ENTITIES RELATED TO THE BUSINESS OF INSURANCE)

to carry on business restricted to reinsurance;

"balance sheet date" means the date on which the balance sheet of an eligible entity is drawn up;

"captive insurance undertaking" means an authorised insurance undertaking, owned either by a financial undertaking, other than an insurance or reinsurance undertaking or a group of insurance or reinsurance undertakings within the meaning of article 2 of the Insurance Business Act, or by a non-financial undertaking, the purpose of which is to provide insurance cover exclusively for the risks of the undertaking or undertakings to which it belongs or of an undertaking or undertakings of the group of which it is a member.

For the purpose of this definition:

 "group" means the same as the meaning  assigned to it in the Insurance Business Act; and Cap. 403. "risks of the undertaking or undertakings to which it belongs or of an undertaking or undertakings of the group of which it is a member" means risks where the direct policyholder is:

(a) a shareholder (direct or indirect) of the captive insurance undertaking; or

(b) the group of the captive insurance undertaking; or

(c) undertakings in the same group of the captive insurance undertaking;

"captive reinsurance undertaking" means an authorised reinsurance undertaking, owned either by a financial undertaking, other than an insurance or reinsurance undertaking or a group of insurance or reinsurance undertakings within the meaning of article 2 of the Insurance Business Act, or by a non-

financial undertaking, the purpose of which is to provide reinsurance cover exclusively for the risks of the undertaking or undertakings to which it belongs or of an undertaking or undertakings of the group of which it is a member.

For the purpose of this definition:

 "group" means the same as the meaning  assigned to it in the Insurance Business Act; and Cap. 403. "risks of the undertaking or undertakings to which it belongs or of an undertaking or undertakings of the group of which it is a member" means risks where the ultimate policyholder is:

(a) a shareholder (direct or indirect) of the captive reinsurance undertaking; or

(b) the group of the captive reinsurance undertaking; or

(c) undertakings in the same group of the captive reinsurance undertaking; or

(d) persons associated to paragraph

(b) or paragraph (c) by virtue of an employee and, or director and, or officer relationship;

"cessation undertaking" means an authorised insurance undertaking or an authorised reinsurance undertaking which has given notice to the competent authority of its intention to cease to carry on the business they are authorised to carry on in terms of article 39 of the Insurance Business Act;

"company" means the same as the meaning assigned to it in the Companies Act;

"competent authority" means the Malta Financial

Services Authority established in terms of the Malta Financial

Services Authority Act;

"contract boundary" means the coverage period which is the period during which the eligible entity provides insurance contract services, including those services that relate to all premiums within the boundary of the insurance contract. Cash flows are within the boundary of an insurance contract if they arise from substantive rights and obligations that exist during the reporting period in which the eligible entity can compel the policyholder to pay the premiums or in which the eligible entity has a substantive obligation to provide the policyholder with insurance contract services. A substantive obligation to provide insurance contract services ends when:

(a) the eligible entity has the practical ability to reassess the risks of the particular policyholder and, as a result, can set a price or level of benefits that fully reflects those risks; or

(b) both of the following criteria are satisfied:

(c) the eligible entity has the practical ability to reassess the risks of the portfolio of insurance contracts that contains the contract and, as a result, can set a price or level of benefits that fully reflects the risk of that portfolio; and

(d) the pricing of the premiums up to the date when the risks are reassessed does not take into account PRINCIPLES IN RESPECT OF CERTAIN ELIGIBLE 281.07 ENTITIES RELATED TO THE BUSINESS OF INSURANCE)

the risks that relate to periods after the reassessment date.

For the purpose of this definition:

"insurance contract services" means the following services (as applicable) that an eligible entity provides to a policyholder of an insurance contract:

(a) coverage for an insured event (insurance coverage);

(b) for insurance contracts without direct participation features, the generation of an investment return for the policyholder, if applicable (investment-return service); and

(c) for insurance contracts with direct participation features, the management of underlying items on behalf of the policyholder (investment-related service).

"EEA State" means any State which is a contracting party to the agreement on the European Economic Area signed at Oporto on the 2nd May, 1992 as adjusted by the Protocol signed at Brussels on 17th March, 1993 and as amended by any subsequent acts;

"eligible entity or eligible entities" means the entities referred to in paragraphs (a) to (l) of sub-regulation 1 of regulation 5;

"entity" or "reporting entity" means a commercial partnership as defined in the Companies Act and any other body, corporate or unincorporate, which carries on a trade or business and which is required to prepare financial statements in terms of the laws of Malta;

"European Union" or "EU" means the same as the meaning assigned to it in article 2 of the European Union Act;

"financial reporting period" means the period ending on the eligible entity’s balance sheet date for which financial statements are prepared;

"financial statements" means the statements prepared by an eligible entity comprising the following documents:

(a) a balance sheet;

(b) an income statement;

(c) notes to the financial statements;

(d) a statement of changes in equity; and

(e) a statement of cash flows.

"financial undertaking" means any of the following entities:

(a) a credit institution, a financial institution or an ancillary banking services undertaking within the meaning of sub-paragraphs (1), (17) and (22) of paragraph (1) of Article 3 of Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms respectively;

(b) an insurance undertaking, or a reinsurance undertaking or an insurance holding company within the meaning of Article 212 (1)(f) of the Solvency II Directive;

(c) an investment firm or a financial institution within the meaning of point 1 of Article 4(1) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments; or

(d) a mixed financial holding company within the meaning of Article 2(15) of Directive 2002/87/EC of the European Parliament and of the Council of 16 December 2002 on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate;

"foreign eligible insurance and, or reinsurance undertakings" means insurance and, or reinsurance undertakings whose activities would have qualified them as an eligible entity had they been authorised under article 7 of the

Insurance Business Act;

"insurance and, or reinsurance parent undertaking"

means a parent undertaking which is subject to group supervision in terms of the Insurance Business (Supervision Of

Insurance and Reinsurance Undertakings in a Group)

Regulations;

Provided that the only undertakings being consolidated in the financial statements of the said parent PRINCIPLES IN RESPECT OF CERTAIN ELIGIBLE 281.07 ENTITIES RELATED TO THE BUSINESS OF INSURANCE)

undertaking are:

(a) eligible entities in terms of paragraphs (a) to (i) of sub-regulation (1) of regulation 5; or

(b) foreign eligible insurance and, or reinsurance undertakings; or

(c) insurance holding undertakings; or

(d) undertakings providing any of the following services:

(i) the management of claims of an insurance undertaking on a professional basis, and loss adjusting and expert appraisal of claims;

(ii) services rendered by insurance intermediaries registered or regulated to carry out such services in an EU, EEA State, non-Member State or non-EEA State and managing general agents;

(iii) management, advisory, legal, internal audit, actuarial and consulting services;

(iv) accounting, tax, financial, payroll and administrative services,

(v) provision of personnel;

(vi) electronic communications and application services, systems development, operation and maintenance services;

(vii) use of office equipment and provision of office space.

"insurance holding undertakings" means undertakings, whether registered in Malta or outside Malta, which act directly or indirectly as holding undertakings of eligible entities, foreign eligible insurance and, or reinsurance undertakings or insurance related services undertakings;

"insurance undertakings" means undertakings, whether registered in Malta or outside Malta which are licensed, registered or, otherwise authorised to carry on insurance and, or reinsurance activities;

"licensed special purpose vehicle" means an undertaking authorised to securitise a transaction within the scope of section 25 of the Schedule;

"MiFID II Directive" means Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/ 92/EC and Directive 2011/61/EU (recast), as amended from time to time and includes any implementing measures that have been or may be issued thereunder;

"protected cell company" means an authorised insurance undertaking or an authorised reinsurance undertaking established as a protected cell company in terms of the

Companies Act (Cell Companies Carrying On Business Of

Insurance) Regulations where taking every cell of the said cell company and the core (if the core carries on insurance or reinsurance activities), as a separate company, each such cell and the core (if the core carries on insurance or reinsurance activities), would qualify as an eligible entity;

Provided that for the purposes of protected cell company in assessing whether the cell or the core qualifies as a captive insurance undertaking or a captive reinsurance undertaking reference should be made to the above definitions of "captive insurance undertaking" and "captive reinsurance undertaking". For the purposes of this definition, "core" shall refer to that part of a protected cell company in which non-cellular assets are held.

"public company" means the same as the meaning assigned to it in the Companies Act;

"public interest entity" means the same as the meaning assigned to it in the Act;

"redomiciled undertaking" means an authorised insurance undertaking or an authorised reinsurance undertaking which has notified the competent authority of its intention to transfer its registered office or to continue its operations in another jurisdiction pursuant to the Insurance Business

(Continuance of Companies Carrying on Business of Insurance)

Regulations or Transfer of Registered Office of a European

Company (SE) Regulations or Cross-border Conversions of

Limited Liability Companies Regulations or Cross-border

Mergers of Limited Liability Companies Regulations or Cross-

border Divisions of Limited Liability Companies Regulations.

"regulated market" means the same as the meaning assigned to it in the Companies Act; PRINCIPLES IN RESPECT OF CERTAIN ELIGIBLE 281.07 ENTITIES RELATED TO THE BUSINESS OF INSURANCE)

"reinsurance special purpose vehicle" means a reinsurance special purpose vehicle as defined under the Reinsurance Special

Purpose Vehicles Regulations, whether established under the said

Regulation or constituted as a securitisation cell company carrying on business as reinsurance special purpose vehicles under the

Securitisation Cell Companies Regulations

"risk transferee vehicle" means a reinsurance special purpose vehicle or a securitisation vehicle or a licensed special purpose vehicle;

"risk transferee vehicle parent undertaking" means a parent undertaking of a risk transferee vehicle

"the Schedule" means the Schedule to these regulations and forming an integral part hereof;

" "securitisation vehicle" means a securitisation vehicle established under the Securitisation Act or as a securitisation cell company under the Securitisation Cell Companies Regulations, which is not a reinsurance special purpose vehicle and which satisfies all of the following conditions:

(a) it enters into a transaction within the scope of Section 25 of the Schedule;

(b) it is fully funded by always having assets the value of which is equal to or exceeds the aggregate maximum risk exposure and being able to pay the amounts it is liable for as they fall due; and

(c) the providers of any debt or financing are professional clients as defined in Annex II of the MiFID II Directive:

Provided that in the case of a securitisation cell company, every cell of the said cell company and the core, to the extent that such cells and, or the core have entered into a transaction within the scope of Section 25 of the Schedule, shall satisfy the conditions above for the securitisation cell company to be an eligible entity.

"security" means the same as the meaning assigned to it in the

Companies Act;

"Solvency II Directive" means Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II);

"Solvency II Directive exempted insurance undertaking" means an authorised insurance undertaking which fulfills the conditions set out in sub-regulation (1) of regulation 3 of the Insurance Business

(Exemptions) Regulation;

"specialised run-off undertaking" means authorised insurance undertakings or authorised reinsurance undertaking whose business model is to actively acquire legacy portfolios or undertakings solely in run-off or to be run-off.

(2) References to an "entity" or "reporting entity" in these regulations shall, in the case of an entity or reporting entity preparing consolidated financial statements in terms of item 22 of the Schedule, be construed as referring to the group of entities in respect of which consolidated financial statements are presented for as a single economic entity.

(3) Unless the context otherwise requires, terms used in these regulations and which are not defined herein shall have the meaning assigned to them in the Insurance Business Act.