Cap. 403 Art. 9Combination of long term business and general business.

(1) Subject to sub-articles (2) and (3), the competent authority shall not, under article 7, authorise an undertaking with its head office in Malta to carry on both long term business and general business.

(2) Without prejudice to the provisions of sub-article (1) -

(a) an insurance undertaking authorised to carry on long term business may be granted an authorisation to carry on general business for the risks listed in classes 1 and 2 of Part I of the Third Schedule; or

(b) an insurance undertaking authorised solely to carry on general business of insurance for the risks listed in classes 1 and 2 of Part I of the Third Schedule may be granted authorisation to carry on long term business; or

(c) an insurance undertaking authorised solely to carry on general business of insurance may be granted authorisation to carry on long term business restricted to reinsurance.

(3) Without prejudice to the provisions of sub-article (4), the provisions of this article shall not apply to an undertaking which holds an authorisation to carry on both long term business and general business under this Act as in force immediately before the coming into force of this Act.

(4) An undertaking authorised as aforesaid shall, in respect of long term business and general business, be managed separately in a manner as may be determined by Insurance Rules made for the purpose of this article.

(5) An authorised insurance undertaking carrying on long term business and seeking authorisation to extend its business to the risks listed in classes 1 or 2 of Part I of the Third Schedule shall submit proof to the satisfaction of the competent authority that it:

(a) possesses the eligible basic own funds to cover the absolute floor of the Minimum Capital Requirement for undertakings authorised to carry on long term business and the absolute floor of the Minimum Capital Requirement for undertakings authorised to carry on general business, in accordance with article 17; and

(b) undertakes to cover the minimum financial obligations as determined in accordance with Insurance Rules, going forward.

(6) An authorised insurance undertaking carrying on general business for the risks listed in classes 1 or 2 of Part 1 of the Third Schedule and seeking authorisation to extend its business to long term business shall submit proof to the competent authority that it:

(a) possesses the eligible basic own funds to cover the absolute floor of the Minimum Capital Requirement for undertakings authorised to carry on long term business and the absolute floor of the Minimum Capital Requirement for undertakings authorised to carry on general business, in accordance with article 17;

(b) undertakes to cover the minimum financial obligations as determined in accordance with Insurance Rules, going forward.

(7) For the avoidance of doubt, an undertaking whose business is restricted to reinsurance, may be granted an authorisation to carry on both general and long term business in all classes of business.