Cap. 403 Art. 41Reorganisation, dissolution and winding up of authorised undertakings.

(1) Without prejudice to the provisions contained in article

42 and subject to the following provisions of this article -

(a) in the case of an authorised insurance undertaking whose head office is in Malta:

(i) where any reorganisation measures are adopted in relation to the undertaking, such measures shall be applied in accordance with regulations made for the purposes of this article;

(ii) such undertaking shall, dissolve and consequentially wind up under and in accordance with regulations made under this article; and

(b) in the case of a branch in Malta of an authorised third country insurance undertaking:

(i) where any reorganisation measures are adopted in relation to the branch, such measures shall be applied in accordance with regulations made for the purposes of this article;

(ii) such branch shall dissolve and consequentially wind up under and in accordance with regulations made for the purposes of this article.

(2) Where it appears to the competent authority that an authorised insurance undertaking is, for any reason whatever, likely to dissolve and wind up, or has given notice of dissolving and winding up, or is being dissolved and wound up, the competent authority shall -

(a) in the case of an undertaking whose head office is in Malta, prohibit the free disposal of the assets of the undertaking whether such assets are situated in Malta or in country outside Malta; and

(b) in the case of an authorised third country insurance undertaking, prohibit the free disposal of the assets of the undertaking situated in Malta or in any other country if such assets relate to the undertaking’s business in Malta, if such prohibition has not been imposed on the insurance undertaking by virtue of or under any other provision of this Act.

(3) Notwithstanding the provisions of any other law, the assets of an authorised insurance undertaking which are prohibited under sub-article (2) or by virtue of or under any other provision of this Act to be freely disposed of shall be available only for meeting the liabilities of the undertaking attributable to its business of insurance:

Provided that debts and other liabilities arising out of contracts of insurance attributable to its business of insurance shall rank before any other claim against such assets.

(4) Where the value of the assets mentioned in sub-article (3) exceeds the amount of the liabilities mentioned in that sub-article the restriction imposed by that sub-article shall not apply to so much of those assets as represents the excess.

(5) In so far as the provisions of this article are inconsistent with the provisions of any other law, the provisions of this article shall prevail, and the provisions of any other law shall, to the extent of the inconsistency, not apply to such undertakings.

(6) The Minister may, after consultation with the competent authority, make regulations in respect of the winding-up or re-organisation of authorised insurance undertakings whose head office is in Malta, including their branches, if any, and of branches of third country insurance undertakings, and different provisions may be made for different cases or classes of cases, and account shall be taken of Malta’s international commitments in this regard. Such regulations may provide for the implementation of detailed re-organisation measures and procedures, including the following matters: the publication and submission of information in such language or languages and in such newspapers or other publications as may be prescribed, the submission of information to creditors, and the manner and procedure thereof, the notification to creditors and the procedure for the submission of claims or representations, measures for the protection of the rights of creditors and other third parties, including set-off arrangements; consultation between the competent authority and any other regulatory, administrative or judicial authorities in Malta and outside Malta with competence over the winding-up or re-organisation of such undertakings or of branches thereof; the publication of decisions relating to such winding-up or re-organisation procedures; the establishment of rules governing the applicability of the proper or applicable law and other issues of conflict of laws.

(7) Where an authorised insurance or reinsurance undertaking takes a decision to dissolve and wind up, it shall immediately notify, in writing, the competent authority of such decision before taking any further action to that effect.

(8) (a) An authorised reinsurance undertaking with its head office in Malta shall dissolve and wind up in accordance with the provisions of the Companies Act.

(b) An authorised third country reinsurance undertaking shall dissolve and wind up in accordance with the laws of the country where the head office of such undertaking is situated governing the dissolution and winding up of such undertakings.