i. The Insurance Distribution Act
On the 10th July 2018, Act No. XXVI of 2018 was published bringing about changes to the Insurance Intermediaries Act (to be renamed as the 'Insurance Distribution Act' and which transposes the Insurance Distribution Directive (the 'IDD').
Act No. XXVI of 2018 shall come into force once the Commencement Notice is published in the Government Gazette.
ii. Insurance Distribution Rules
On the 12th July 2018, the MFSA announced the publication of Insurance Distribution Rules (the 'IDRs') issued under the Insurance Distribution Act (Cap. 487) the main objective of which is to transpose the remaining provisions of the IDD.
The IDRs are consolidated in a single rulebook, divided into two parts consisting of fifteen Chapters.
- -Part A entitled Registration and Enrolment Requirements applicable under the Insurance Distribution Act is composed of four chapters and contains Insurance Distribution Rules relating to requirements for registration and enrolment of intermediaries.
- -Part B, entitled Conditions for carrying out Insurance Distribution Activities and Reinsurance Distribution Activities is made up of eleven chapters and the IDRs in relation to the various requirements which an insurance intermediary, a reinsurance intermediary, a tied insurance intermediary, an ancillary insurance intermediary, an authorised insurance undertaking and an authorised reinsurance undertaking carrying out insurance distribution activities and reinsurance distribution activities, are required to complyon an on-going basis, as applicable.
The IDRs are to be read in conjunction with the requirements of the Conduct of Business Rulebook.
The new IDRs shall become applicable as from the 1st October 2018.
iii. Amendments to the Insurance Rules
The Insurance Rules issued under the Insurance Business Act have been amended to bring them in line with the requirements set out by the IDD. Chapters 1 and 2 of the Insurance Rules now include the requirement of identifying a board member as the person responsible for the oversight of the insurance or reinsurance distribution activities carried out by the undertaking as well as identifying a person within the undertaking's management structure designated to be responsible for the distribution in respect of insurance or reinsurance products.