S.L. 403.25 Art. 9Whenfundsappear to be reasonably adequate.

(1) The Management Committee shall review the adequacy of the contributions every three years, or whenever serious events or future changes in economic conditions that may have adverse effects on the overall financial standing of the insurers occur, or whenever requested by the competent authority. The said review of the adequacy of the contributions to Fund A, B and C, as stipulated in COMPENSATION FUND)

regulations 17 and 27, shall take into account inter alia:

(a) the contributions made to the respective Fund;

(b) the technical provisions of every insurer contributing to the respective Fund;

(c) the solvency ratio of every insurer contributing to the respective Fund;

(d) any long term inflation;

(e) an increase in the amount of insurers contributing to the respective Fund;

(f) the nature, type and mix of business carried on by the insurers contributing to the respective Fund, and

(g) any such other information which the Management Committee deems appropriate.

(2) The competent authority shall provide the Management Committee with all the information necessary for the Management Committee to conduct its review. Once the review is completed, the Management Committee shall draw up a report on the adequacy of such funds stating the reasons for its consideration and shall submit that report to the competent authority:

Provided that where the Management Committee requires information from the competent authority which is not publicly available, such information shall be provided to the said Committee in an anonymised format.

(3) Whenever the competent authority receives information or a report as is provided for in sub-regulation (2), the competent authority shall, after consultation with the Management Committee and the auditor of the Protection and Compensation Fund, direct the Management Committee in writing:

(a) to continue to exercise its functions and powers under regulation 17 and 27 with respect to contributions to Funds A, B and C made in accordance with sub-regulation (6) and to require the contributions payable thereunder to continue to be paid:

(i) according to the percentage specified in the abovementioned regulations; or

(ii) according to a percentage that is higher or lower than the percentage specified in the abovementioned regulations as the competent authority shall specify in the directive, or

(b) to suspend exercising its functions and powers under regulations 17 and 27 with respect to contributions to such funds in respect of such business and to suspend the contributions payable thereunder, for a period of one or more years, as the competent authority shall specify in the directive:

Provided that where the competent authority directs the Management Committee in writing to increase the percentage of contributions stipulated in these regulations, the competent authority shall ensure that any additional contribution does not unduly prejudice the financial sustainability of the insurers contributing to the respective Fund.

(4) (a) Whenever, and for so long as, payment of the contributions under regulation 17 or 27 is suspended, every insurer, other than an insolvent insurer, to which that directive applies shall pay to the Protection and Compensation Fund a contribution of seven hundred euro (€700) and such contribution shall be paid in the month of January of each year and be at the disposal of the Management Committee to meet ordinary expenses incurred by the administration of the Protection and Compensation Fund as indicated in regulations 17(6) and 27(6).

(b) For the purpose of this sub-regulation ''insurer'' shall include an insurer which was licensed under the Insurance Business Act, 1981, repealed by the Act, or is authorised under the Act to carry on business of long term insurance, whether or not such business constitutes, in whole or in part, business of a protected commitment and which ceased to carry on that business and is carrying on servicing of such business, or which ceases to carry on that business and shall carry on servicing of such business.

(5) Whenever payment of contributions under regulations 17 or 27 is suspended, every insurer authorised under the Act to carry on business of insurance in Malta, on or after the date of enforcement of such suspension, shall pay to Fund A, B or C respectively, the contribution established by regulations 17(5) or 27(5) for a period to be determined by the Management Committee in consultation with the competent authority.

(6) If, for so long as the directive issued by the competent authority under sub-regulation (3) is in operation, whenever it appears to the Management Committee that the circumstances which led to the issuing of the said directive have changed substantially or materially so that the funds held by the Protection and Compensation Fund are inadequate for the Management Committee to exercise its functions for the purpose of regulation 3(2)(a) and (b), the Management COMPENSATION FUND)

Committee shall without delay, inform the competent authority of such change and of the new circumstances and, on receiving such information, the competent authority shall forthwith modify or revoke its directive with respect to contributions to those funds.