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Key malta legal insights

Key malta legal insights. Matthew Mizzi. The Malta ILS framework. - Securitisation Act; - Reinsurance Special Purpose Vehicles Regulations; - Securitisation Cell Companies Regulations; - Securitisation Transactions (Deductions) Rules; - Reinsurance Directive (until 12/31/2015); and

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Key malta legal insights

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  1. Key malta legal insights Matthew Mizzi

  2. The Malta ILS framework - Securitisation Act; - Reinsurance Special Purpose Vehicles Regulations; - Securitisation Cell Companies Regulations; - Securitisation Transactions (Deductions) Rules; - Reinsurance Directive (until 12/31/2015); and - Solvency II Regime (from 1/1/2016).

  3. Malta structures

  4. Securitisation vehicle MT Foundation • Orphaning arrangement may consist of foundation or trust; • Company; trust or partnership. • No MFSA authorisation requirement, unless issuing securities to the public on a continuous basis; • No reinsurance or reinsurance-like contract (no indemnity trigger); • Statutorily bankruptcy remote; • Investor subordination clauses and non-petition clauses expressly recognised in terms of Securitisation Act and Civil Code. MT Issuer Co. Ltd. Collateral • Criteria set out in Transaction Documents apply.

  5. Reinsurance special purpose vehicle MT Insurance Manager (optional) MT Foundation • Orphaning arrangement may consist of foundation or trust; • Private or public limited liability company; • Authorised by the MFSA; • Managed or self-managed; • Assumes risk by means of reinsurance or reinsurance-like risk transfer agreement; • Satisfies mandatory criteria for RSPVs in RSPV Regulations; • Securitisation Act applies. MT RSPVCo. • Solvency II investment and diversification criteria apply. Collateral

  6. Securitisation Cell Company MT Foundation • No minimum capital requirements to establish cell; • No need for issue of shares to establish cell; • No contamination between cell and core and other cells – separate patrimony concept; • Cell can enter into single or multiple transactions, but no multiple originators; • Contractual tranching within cell possible and recognised under Securitisation Act; • Notification to RoC on establishment of cell. Counterparty Counterparty SCC Core • Established with as little as €1,200; • Board of directors responsible for entire entity, including cells. • No transactions through core. • No prior authorisation, unless vehicle established as a public securitisation vehicle. Cell 1 Cell 2 Investors Investors Collateral Collateral

  7. RSPV SCC MT Insurance Manager (optional) MT Foundation • MFSA approval to be obtained prior to establishing cell; • Fully-funded principle applies at cell level; • Prohibition to transact with unrelated undertakings, but multiple transactions through same cell with related undertakings allowed – to change after 1 Jan, 2016? • Multi-currency transactions possible. • Ownership structure subject to MFSA authorisation Cedant Cedant SCC Core • Core authorised by MFSA • Directors and controllers subject to MFSA approval; • Solvency II governance arrangements apply; • Responsible for supervisory reporting; • Managed by insurance manager or self-managed; Cell 1 Cell 2 Investors Investors Collateral Collateral

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