BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.
To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.
To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.
[VALLETTA, Malta]The new kid on the captive block is a European domicile that is attracting large-parent insurers and big-name management companies to its Mediterranean locale.
Malta as a captive domicile began attracting attention when it gained entry in 2004 into the European Union. Since then, its competitors have taken notice as the island situated between Italy and Africa has signed up five pure captives and 17 general insurerscompanies that are set up and operated much the same as captives, but are allowed to write third-party business. Eleven of those 17 are writing risks outside Malta and the remaining six restrict their underwriting to domestic risks. There also is one protected cell company in the domicile. It had not established a cell as of late February.
Among the captives in place are those owned by Newbury, England-based telecommunications company Vodafone Group P.L.C. and Munich, Germany-based automotive giant BMW A.G.
Other large parents have located companies in Malta and they are joined by a handful of insurers owned by smaller parents.
"Malta has managed to attract a number of big names," said Matthew Bianchi, an attorney with Valletta, Malta-based Ganado & Associates, a law firm that handles captive business. "That helps managers market Malta."
A change in its insurance law that coincided with Malta's entry into the European Union set the stage for an expanding captive marketplace. A restrictive captive definition within the island's insurance law was removed and new rules were drafted for captives.
"In 2004, we issued regulations that were tailor-made for captive insurance companies," said Marisa Attard, director of insurance with the Malta Financial Services Authority. "All the rules which apply to insurance companies also apply to captives," but the new regulations spell out particular differences for how captives should operate, she explained.
"Malta's membership into the European Union in 2004 has generated interest in captive companies setting up in Malta and then passporting to cover the captives' risks in other European jurisdictions," said Ms. Attard.
That "passporting" ability provides Malta with an advantage over non-E.U. domiciles "because you don't need fronting arrangements within the European Union," said John Tortell, general manager of Heath Lambert Insurance Management (Malta) Ltd. in Sliema, Malta.
That ability to operate on par with other E.U. domiciles such as Dublin, Gibraltar and Luxembourg has given Malta fresh appeal as a captive location.
"We do recognize Malta as an up and coming European domicile," said Charles Scott, managing director of Guernsey-based Alternative Risk Management, which also has an operation in Malta. "On a cost basis it is a lot lower than doing business in Gibraltar or Dublin. The people there are highly qualified and motivated. You can have a very high quality staff for half the cost. "
Large brokers have established captive management operations in Malta and a major insurer is considering doing so.
American International Group Inc. has "liaised closely" with Maltese regulators with regard to establishing a captive management office there, according to David Stafford, European regional director for AIG Insurance Management Services in Dublin.
Marsh Management Services Malta Ltd. is already well-established in Malta and manages several captives and general insurers generating more than $300 million (€227 million) in annual premiums, said Angela Wright, client director in the Marsh office in Sliema.
Marsh manages companies owned by parents that include European utilities, petrochemical and telecommunications companies.
"And you've got regulations here that are very robust but the regulator is very accessible" said Ms. Wright. You don't get a lot of red tape; you can speak to them directly and you can normally get business done quite easily."
Malta's attractions are such that it could one day rival Dublin in the numbers of captives that locate there, Ms. Wright suggested.
"I don't see why not," she noted. "It's in the hands of the regulators, but they won't bend the rules just to get more captives here."
Mr. Bianchi agreed, saying he "thinks it is just a matter of time before there are 40 to 50 insurance companies" under management in Malta. Dublin is home to more than 154 captives.
Mr. Tortell said he would like to see Malta's growth remain measured and not become explosive. "I would hope it would keep at the same rate ... You can't aspire to bring in 1,000 companies; you have to build it slowly but surely to be able to give good service."