MFSA to host conference on the implementation of the Solvency II Review and IRRD in Malta

The Malta Financial Services Authority (MFSA), through its Insurance Supervision team, will host a conference on 26 February focusing on the evolving prudential landscape for the insurance sector, with particular emphasis on the ongoing Solvency II Review and the Insurance Recovery and Resolution Directive (IRRD).

Titled “fSolvency II Review and IRRD: embedding proportionality and resilience”, the conference will bring together regulators, insurance executives, compliance professionals, and policymakers to discuss how these key regulatory developments will shape a more resilient, competitive, and forward-looking insurance sector within the European Union framework.

The event underscores the MFSA’s continued commitment to enhancing financial stability through robust and effective prudential supervision. The Solvency II review and the introduction of the IRRD represent significant milestones in strengthening the resilience of insurers, improving risk management, and ensuring preparedness in times of stress, while supporting long-term sustainability.

Discussions will also focus on the importance of constructive and continuous collaboration between regulators, the insurance industry, and policymakers to ensure that regulatory reforms are implemented in a practical, proportionate, and risk-based manner. In this context, the MFSA will reaffirm its commitment to the fair application of the proportionality principle and to reducing unnecessary regulatory burden, particularly for smaller and less complex undertakings.

Malta’s insurance sector continues to evolve as a well-regulated and competitive hub within the EU, with the conference providing a timely platform to examine how these reforms can support innovation, growth, and supervisory convergence, while safeguarding policyholder protection.

Further details on the conference agenda and participation will be announced in due course.

Interview with Ray Schembri, Head - Insurance & Pensions Supervision, MFSA

This conference comes at a pivotal moment, with the Solvency II review and the rollout of the IRRD. Why is this timing so critical for insurers in Malta and across the EU?

To answer this question, it’s useful to go back to 2016, when Solvency II was first introduced after a protracted development phase.  The introduction of Solvency II brought about a risk based capital regime which in turn resulted in numerous benefits for all stakeholders including better protection for policyholders, stronger risk management and governance, greater disclosure transparency, better harmonisation across the EU, more efficient capital allocation and an early warning system for supervisory intervention. 

Solvency II quickly earned a reputation as a standard setter for insurance capital regimes to the extent that by the end of 2024 the International Association of Insurance Supervisors adopted the Insurance Capital Standard, which is largely based on the concepts of Solvency II. In that sense, Solvency II has effectively become the international benchmark for insurance prudential regulation.

Given the extent of changes brought about by the introduction of Solvency II in 2016, it was always recognised that the regime would require further fine tuning following an assessment of the initial experience. What we are seeing today is the outcome of that process. We often describe this review package as an evolution rather than a revolution. The core principles remain intact, but the framework is being fine-tuned and clarified where necessary.

Another important element of the Solvency II Review is the drive for greater consistency across EU member states. The review package provides clearer expectations on supervisory practices, helping to ensure a more harmonised application of the rules across the single market and thus promoting better convergence.

In addition, the review now defines proportionality in much more concrete terms. While proportionality has been embedded in Solvency II since day one, the revised framework provides greater clarity on what this means in practice. Alongside this, we have the rollout of the IRRD, which introduces a harmonised recovery and resolution regime for insurers, broadly aligned with the approach already in place for the banking sector. This ensures a consistent, pan-European response framework should an insurer experience financial distress.

In practical terms, how is the MFSA ensuring that this proportionality is applied in Malta?

This is exactly what our conference is going to be about. We are opening a consultative process to make sure that we take the most practical and pragmatic implementation of this particular package. We want to avoid a box-ticking exercise, recognising that companies differ in scale, risk and complexity.

Through the categorisation of the various insurance companies into levels of risk, we will be introducing the concept of small and non-complex insurance companies.  We will make sure that an adequate balance is achieved between regulation and burden reduction for these companies to allow them to compete and serve their purpose effectively within their respective market segment.[LM1] 

Collaboration is also central to implementing the Review Package. Following the 26 February conference, the MFSA will launch consultations and workshops to gather industry feedback, review responses, and refine the rules before they become applicable. This approach ensures that regulatory changes are practical, proportionate, and implemented on schedule, strengthening both compliance and market resilience.

The agenda highlights dialogue with EIOPA and peer supervisors. From a Maltese perspective, how essential is cross-border cooperation for insurers, including passporting business across the EU, and how does MFSA ensure collaboration between regulators, the industry, and policymakers during the implementation of the Solvency II Review Package?"

Cross-border cooperation is essential for Malta’s insurance market. The majority of Maltese-licensed insurers operate primarily on a cross-border basis passporting insurance business across the EU. This requires close collaboration with host national competent authorities to ensure compliance not only with the law but also with the spirit of local regulations and thus supporting a well-functioning single market. The Solvency II Review Package sets clear expectations for harmonised supervisory practices. In view of the way the MFSA has developed and implemented its supervisory practices over the years to address the risks and opportunities posed by cross-border insurance business, we are confident that Malta is already in a good position to meeting these standards through ongoing engagement with other EU regulators.

Malta continues to position itself as a well-regulated insurance hub. So, how important is this conference for local and international stakeholders?

We take pride in Malta’s reputation as a well-regulated insurance hub. This comes through extensive interactions both with license holders as well as with the national competent authorities of the other member states and EIOPA.

These changes are extremely relevant to the size and setups we have in Malta. Local industry players need to understand the implications of what we will be transposing and we need to make sure that their voice is heard where there are concerns.

So it's essential that they not only attend the conference but more importantly actively participate in the consultation process.

For more information and to register, visit https://www.mfsa.mt/events/insurance-conference-2026/