The MFSA may grant an authorisation to:

• a company whose head office is in Malta to carry on the business of insurance in or from Malta, or in or from a country outside Malta;
• a company whose head office is in a country outside Malta to carry on the business of insurance in or from Malta.

Before granting an authorisation the MFSA must be satisfied that:

• the company has made an application in writing. An application is to be determined within 6 months of receiving the required information but this period is reduced to 3 months where the authorisation sought is restricted to reinsurance or affiliated insurance;
• the company’s own funds are at all times appropriate for the type of business to be carried on or being carried on by the company;
• the company’s objects are limited to business of insurance and operations arising directly therefrom to the exclusion of other commercial business;
• sufficient information is made available on persons having any proprietary, financial or other interest in, or in connection with, the company;
• all qualifying shareholders, controllers, and all persons who will effectively direct the business of insurance are fit and proper to ensure the company’s sound and prudent management;
• a scheme of operations has been submitted;
• that the company discloses any close links that it may have with any other person.

Non-EU insurance companies ought to appoint a representative who must be a person resident in Malta or a company whose head office is in Malta. The company must itself have an individual representative resident in Malta. Moreover such resident person must be authorised to act generally and to accept service of any documents on behalf of the company and must not be the approved auditor or a partner or an employee of the approved auditor of the company.

The required own funds of an insurance company must be unencumbered at all times, and depend on the pertinent class of insurance. The MFSA may also require a higher amount as it may deem appropriate. Moreover, companies authorised to carry on business of insurance in Malta are to maintain at all times a minimum margin of solvency as well as a guarantee fund as prescribed by the pertinent regulations. An authorised company carrying on business of insurance is also required to contribute to the Protection and Compensation Fund. The Fund is established for the payment of claims in respect of risks situated in Malta and of commitments where Malta is the country of the commitment remaining unpaid by reason of the insolvency of an authorised company; and for the payment of compensation to victims of road traffic accidents. Companies carrying on business of reinsurance or affiliated insurance are excluded from making a contribution to the Fund.