Malta Captive Insurance

1. Malta Captive Insurance A Malta Captive insurance undertaking (also known as an affiliated insurance undertaking)is an entity owned either by a financial undertaking or by a non-financial undertaking, the purpose of which is to provide insurance cover exclusively for the risks of the undertaking or undertakings to which it belongs or of an undertaking or undertakings of the group of which it is a member. The benefits of using a Malta Captive are, amongst others: – Providing cover for risks that are not conventionally covered on the insurance market; – Bespoke policies aimed at improving risk management; – Improved cash flow management; – Protection from price fluctuations; – Retention of premium within the same group of companies; and – Ability to respond more quickly when new cover requirements are identified. Own Funds Malta Captive insurance companies are required to maintain own funds, consisting primarily of share capital, reserves, retained profits and subordinated loans. These must make up not less than 50% value of the own funds’ requirement, however the MFSA may request that 100% of the initial own funds’ requirement consist of paid-up capital. It is also crucial that these funds remain unencumbered at all times.

2. For general business, minimum own funds of €2.5million/€3.7million must be held, depending on the nature of the business. For long term businesses, the necessary own funds are a set minimum of €3.7million. For reinsurance Malta Captives, the minimum own funds is set at €1.2milllion. EMD can assist you with advice and assistance in obtaining a Malta Captive Insurance Company licence.