Captivating Malta

Traditionally a captive insurance company is known to be a limited purpose corporate entity set up by a non-insurance parent company and licensed to insure all or some of the risks emanating from the parent's and/or group's business.

Under Maltese legislation, captive insurance companies are referred to as Affiliated Insurance Companies (AICs) and are regulated under a set of tailor made rules.

Insurance Directive 21 of 2003 (now replaced by Insurance Rule 21 of 2007) has considerably broadened the traditional definition of captive insurance by including risks originating with:

• Parent or group companies
  
• Undertakings having common membership up to the ultimate beneficial owner level, with the AIC, amounting to at least 51%