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As from 15 January the European Union’s insurance borders opened up to Maltese firms and intermediaries, which are now in a position to carry out business across the EU on the basis of their registration in Malta. The development comes as a result of a new European directive issued on the date.
The single market for insurance services has introduced the freedom to provide services and to establish branches in other EU member states, while also guaranteeing a high level of protection for customers.
In Malta the majority of the requirements imposed by the new EU directive are already in place and have been functioning for years, as intermediaries have been regulated since 1981. The Malta Financial Services Authority, now the regulator for insurance business in Malta, has ensured that amendments to Maltese laws required to ensure that Maltese regulated firms are also able to benefit from the single market, also came into effect on 15 January, according to the Maltese Association of Insurance Brokers (AIB).
As a result, Maltese firms now enjoy full passporting rights to practice their financial services business within the European Union. The rights permit a firm or person to set up a branch in another EU state or to carry out business there on a cross-border basis.
The AIB has welcomed the beginning of a genuine Single Market provided by this Directive for European insurance intermediaries as well as for their commercial and private customers.
The importance of allowing European insurance intermediaries to carry out their services throughout Europe based solely on their home country licence was recognised by the Heads of Governments in June 1999, and the appropriate directive was included in the European Commission Action Plan for Financial Services.
BIPAR, the European Federation of Insurance Intermediaries, which had been lobbying the European authorities for many years to adopt binding rules for intermediaries at EU level, and which actively participated in the drafting process and adoption of the directive, welcomes the implementation of the text which allows intermediaries to ensure the servicing of their clients’ insurance when the latter have exposure in other Member States - as they increasingly do.
At the same time, European insurance intermediaries are now able to help their clients to benefit from the wide range of products on offer in the European Single Market for Insurance, thus playing their essential role as the catalyst for competition at EU level.
“BIPAR and I personally would like to congratulate once again today the efforts of the European Commission and the other EU institutions involved in the legislation process to adopt this important Directive which is crucial for bringing about a meaningful Single Market for insurance intermediaries. This text is also bound to increase the professionalism of insurance intermediaries anywhere in Europe,” comments David Harari, Chairman of BIPAR's EU Committee.
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