The Reinsurance Special Purpose Vehicles Regulations, 2016 have been published on the 19 April 2016 by means of Legal Notice 130 of 2016 in the Government Gazette of Malta. The new rules revoke and replace the 2013 Reinsurance Special Purpose Vehicles Regulations, and now transpose the provisions of Directive 2009/138/EC of the European Parliament and Council on the taking up and pursuit of business of insurance and reinsurance (known as the ‘Solvency II Directive’) and its Implementing Regulations, which have been recently updated as part of the European Commission’s drive to stimulate growth through its Capital Markets Union Action Plan.
Reinsurance special purpose vehicles permit insurers or reinsurers to transfer risks from the insurance industry to the capital markets, and thereby facilitate access to additional reinsurance capacity.
The enactment of this regulatory framework through the new Regulations enables Malta’s single financial services regulator, the MFSA, to accept and process applications for authorisations of reinsurance special purpose vehicles with a view to enhance Malta’s capital markets offering.
Malta has a favourable tax regime for reinsurance special purpose vehicles, which may benefit from a tax neutral position. They are deemed to be securitisation vehicles and benefit from a range of tax deductions under the Securitisation Transactions (Deductions) Rules, 2011, over and above other deductions which may be claimed by a Maltese limited liability company.