Opposition MP questions whether insurers prepared for new solvency law

Opposition MP Kristy Debono questioned whether Maltese insurance companies are fully prepared for a new EU insolvency directive that will primarily regulate the amount of capital they must hold.

Speaking in parliament during a debate on the Maltese transposition of this directive, Debono cited a 2014 report by audit firm KPMG on 39 insurance companies that indicated several shortcomings.

In particular, it found that 87% of the assessed companies failed to include details of their group shareholding structure or group structure charts in their Solvency Financial Condition Reports. Under Solvency II’s transparency clauses, such details would have to be made available for public scrutiny.

“Has the government monitored the insurance market since this report was published, and if so, did the market witness positive developments?” she asked. “Are Maltese insurance companies fully prepared for the implementation of this law?”

She also questioned whether the government had consulted with insurance operators about Solvency II and whether it had helped them prepare for life after the law.

She suggested that the Malta Financial Services Authority work hand in hand with insurance companies to ensure that they are in line with this transposition.

“My intention isn’t to be alarmist, simply to put the minds of insurance workers and insurance clients at rest that they won’t encounter any legal problems when this law passes early next year,” Debono said. “We definitely cannot afford such problems within the insurance sector, particularly not at such a delicate stage where people’s lives are intrinsically tied down with private pensions.”