Captive Insurance: Malta Updates Its Rules

The international environment for captives has changed. Corporate insurance buyers are facing higher primary premiums and related taxes, higher reinsurance prices, lower policy limits and less cover. In the captive sector, major corporations are also finding problems to make fronting arrangements with insurance companies as a result of which they are forced to make strategic choices. There is a need for captives to be financially stronger and to be able to take more risk. There are options such as direct underwriting and cost reduction to be considered. It is time new business models are explored and new locations studied.

Over recent years Malta has established itself as a model jurisdiction in financial services regulation. As in other successful economic sectors the regulatory framework combines well with other advantages that Malta can provide in terms of low cost, ED membership, strategic access to southern Mediterranean markets and a good working