Cap. 403 Art. 35Transfer of long term business.

(1) Where it is proposed to carry out a scheme under which the whole or part of the long term business carried on by an authorised insurance undertaking under this Act ("the transferor"), is to be transferred to another undertaking whether authorised thereunder or not ("the transferee"), and -

(a) where the transferor is an undertaking whose head office is in Malta, the business proposed to be transferred is business carried on in or from Malta or in or from a country outside Malta;

(b) where the transferor is a third country insurance undertaking, the business proposed to be transferred is business carried on in or from Malta, the transferor or the transferee shall, by application filed before the Financial Services Tribunal, request approval of the scheme. Approval by the Tribunal shall be in accordance with the provisions of this article.

(2) The Tribunal shall not determine an application filed before it under sub-article (1) unless -

(a) the application is accompanied by a report on the terms of the scheme by an independent actuary; and

(b) the Tribunal is satisfied that the requirements of sub-article (3) have been complied with.

(3) The requirements referred to in sub-article (2)(b) are -

(a) a notice stating that the application has been made and giving the addresses of the branches, agencies and offices at which, and the period for which, copies of the documents mentioned in paragraph (d) will be available as required by that paragraph has been published -

(i) in at least two local daily newspapers of which one is published in the Maltese language and the other in the English language; and the text of the notice shall be in Maltese in the Maltese daily and in English in the English daily;

(ii) where the transferor is an undertaking which carries on business from Malta or in or from a country outside Malta and, as regards any policy included in the proposed transfer which evidences a contract of insurance, a country outside Malta is the country of the commitment, in two daily newspapers in that country;

(b) except in so far as the Tribunal has otherwise directed, a statement -

(i) setting out the terms of the scheme, and

(ii) containing a summary of the report mentioned in sub-article (2)(a) sufficient to indicate the opinion of the actuary on the likely effects of the scheme on the long term business policyholders of the undertakings concerned, has been sent to each of those policyholders and every other person who claims an interest in a policy included in the proposed transfer and has given written notice of his claim to the transferor;

(c) a copy of the application, of the report mentioned in sub-article (2)(a) and of any statement sent out under paragraph (b) of this sub-article has been served on the competent authority and that a period of not less than thirty days has elapsed since the date of service;

(d) copies of the application and of the report mentioned in sub-article (2)(a) have been open to inspection -

(i) at each of the branches, agencies and offices in Malta of the undertakings concerned;

(ii) where the transferor is -

(aa) an undertaking whose head office is in Malta which carries on business from Malta or in or from a country outside Malta, or

(bb) a third country insurance undertaking which carries on business from Malta, and, as regards any policy included in the proposed transfer which evidences a contract of insurance, a country outside Malta is the country of the commitment, at such place in that country as the Tribunal has directed; for a period of not less than thirty days beginning with a date to be determined by the Tribunal; and that copies of the report have been made available for purchase from those offices and places during that period upon payment of such fee as may be fixed by the Tribunal; and

(e) the notice and the statement referred to in this sub-article shall state that written representations concerning the transfer may be sent to the Tribunal within a period determined by the Tribunal.

(4) On any application filed under sub-article (1):

(a) the competent authority may be heard by the Tribunal; and

(b) the competent authority and any policyholder who alleges that he would be adversely affected by the carrying out of the scheme and every other person who claims an interest in a policy included in the proposed transfer and has given notice of such interest to the transferor, shall be entitled to make written representations..

(5) Subject to sub-article (6), the Tribunal shall not approve a transfer on an application filed before it under sub-article (1) unless it is satisfied that -

(a) (i) the transferee is, or immediately after the approval will be, authorised under article 7 to carry on long term business of the class or classes to be transferred under the scheme;

(ii) the transferee is, or immediately after the approval will be, authorised under Article 14 or Article 162 of the Solvency II Directive, to carry on long term business of the class or classes to be transferred under the scheme in a Member State or an EEA State; or

(iii) if the transferee does not fall within sub-paragraphs (i) and (ii), the transferee has the authorisation required to enable the business, or part which is to be transferred, to be carried on in the place to which it is to be transferred or will have it before the scheme takes effect; and

(b) (i) the transferee referred to in sub-paragraph (i) of paragraph (a) of this sub-article, produces evidence that after taking the transfer into account, it possesses the necessary eligible own funds to cover the Solvency Capital Requirement required to be maintained under this Act;

(ii) the transferee referred to in sub-paragraph (ii) of paragraph (a) of this sub-article, produces evidence that after taking the transfer into account, it possesses the necessary eligible own funds to cover the Solvency Capital Requirement provided for in Article 100 of the Solvency II Directive; or

(iii) if the transferee does not fall within sub-paragraphs (i) and (ii), the transferee possesses, or will possess before the scheme takes effect, the solvency requirements required of it by, or under, the law applicable in the place to which the business is being transferred;

(iv) (aa) if the transferee is authorised under this Act, its financial resources are, consequential to the transfer, adequate to fulfil the other obligations required of it by, or under, this Act; or

(bb) if the transferee is a third country insurance undertaking, the transferee’s financial resources are, consequential to the transfer, adequate to fulfil the other obligations required of it by, or under, the law applicable in the place to which the business is being transferred;

(c) if the transferor is an undertaking whose head office is in Malta, and the establishment from which the policies are to be transferred is situated in a Member State or EEA State -

(i) the European regulatory authority in that Member State or EEA State has been consulted about the proposed transfer; and

(ii) the European regulatory authority has either responded or the period of three months beginning with the consultation has elapsed.

(6) Where the transferor is an undertaking which carries on business from Malta or in or from a country outside Malta and, as regards any policy included in the proposed transfer which evidences a contract of insurance, a country outside Malta is the country of the commitment, the Tribunal shall not approve the transfer unless the competent authority certifies -

(a) that the European regulatory authority in that country has been notified; or

(b) the overseas regulatory authority has been notified of the proposed transfer; and

(c) either that the European regulatory authority or the overseas regulatory authority has consented to the scheme or that any such authority has not refused its consent to the scheme within the period of three months beginning with the date of the notification.

(7) Where a scheme is approved by the Tribunal under this article the transferee shall, within ten days from the date on which the approval is made or such longer period as the Tribunal may allow, deposit two office copies of the approval with the competent authority.