PKF MALTA pro­motes cap­tives in New York (post Brexit)

Malta Independent - - BUSINESS & FINANCE -

An­other event was or­gan­ised on 29th March in New York, with the sup­port of Fi­nanceMalta, Bee In­sur­ance Man­age­ment and a line of key­note speak­ers. Again this proved to be an in­no­va­tive event fo­cused on Malta as a domi­cile seek­ing to at­tract US Com­pa­nies to host their Euro­pean Cap­tives. Topics in­cluded: how to sur­vive FATCA and CRS, what tax reg­u­la­tions one should look out for when re­lo­cat­ing, and fi­nally the ad­van­tages Malta of­fers as a domi­cile which con­tin­ues to strengthen its po­si­tion in Europe as a strong player in the Cap­tive mar­ket.

De­vel­oped over a decade of con­tin­ued build­ing of the coun­try’s fi­nan­cial ser­vices in­fra­struc­ture and le­gal frame­work, this leg­is­la­tion has made the is­land more at­trac­tive for the op­er­a­tion of Cap­tives. The jewel in the crown is the Pro­tected Cell Com­pa­nies in Malta. Malta is the only full EU mem­ber state that of­fers PCCs. Malta is also the only EU mem­ber state that of­fers the se­cu­ri­ti­sa­tion cell com­pany struc­ture used for as­set-backed fi­nanc­ing or in­sur­ance linked se­cu­ri­ties plat­forms. The in­sur­ance mar­ket in Europe is cer­tainly ex­pe­ri­enc­ing a dra­matic change in cul­ture, mainly due to the af­ter­math of Sol­vency II and re­cently chal­lenges on pass­port­ing rights which may be for­feited by UK-based cap­tives, a con­se­quence of the Brexit ne­go­ti­a­tions.

While many cap­tives in Malta are en­twined with al­lo­cat­ing their re­sources to com­plete the QRTs and the­matic re­views, a sur­vey car­ried out in 2015 on the lo­cal mar­ket shows that 57 per cent of lo­cal in­sur­ers have been some­what sur­prised by the mag­ni­tude of ad­di­tional ef­fort nec­es­sary to be com­pli­ant for Pil­lar III rel­a­tive to the time avail­able. The XBRL con­vert­ing is­sue is one of the main fac­tors which con­trib­uted to ad­di­tional dif­fi­culty lo­cally in meet­ing the dead­lines. Source (Lo­cal In­sur­ance Sur­vey on Sol­vency II - Day One Re­port­ing and QRT Readi­ness Ques­tion­naire for Mal­tese In­sur­ers car­ried out by PKF Malta). With­out any doubt, some of the key ad­van­tages of Malta as a democ­racy in­clude our pro­fes­sional in­sti­tu­tions, EU mem­ber­ship, po­lit­i­cal sta­bil­ity and a good com­mand of the English lan­guage.

Malta has man­aged to pros­per, al­beit be­ing small, thus af­ford­ing Cap­tive own­ers flex­i­bil­ity of full pass­port­ing rights and ac­ces­si­bil­ity with a stronger cus­tomer fo­cus. At PKF Malta, we pride our­selves on be­ing the right size to pro­vide the right so­lu­tions with the right peo­ple. This is ev­i­denced in our team of in­sur­ance, tax, fi­nance and le­gal ex­perts who help to com­ply a com­pany’s fea­si­bil­ity, pre-li­cens­ing and li­cens­ing process and as well through­out the en­tity’s on-go­ing op­er­a­tion. We pro­vide value added rec­om­men­da­tions and have as­sisted clients in em­bed­ding risk man­age­ment pro­cesses into their day-to-day op­er­a­tions.

It goes with­out say­ing that 2016 be­ing the first year of re­port­ing this will be a chal­leng­ing time for in­sur­ers as they get to grips with the Sol­vency II re­quire­ments, and at this junc­ture PKF Malta is able to pro­vide ad­vice to help in­sur­ers and/or start-ups cope with th­ese fi­nan­cial re­port­ing chal­lenges. As ser­vice providers, we value the re­la­tion­ship we build with our clients. We be­lieve that by bas­ing a re­la­tion­ship on trust, we can pro­vide clients with the best tai­lor-made ser­vice pos­si­ble. We en­deav­our to pro­vide our clients with the right com­bi­na­tion of skills, ex­pe­ri­ence, sta­tis­ti­cal method­olo­gies and pro­grammes to de­liver the as­sur­ance and sup­port they need. PKF Malta is com­mit­ted to train its staff to en­able them to pro­vide client ser­vice of the high­est stan­dards.

Pro­fes­sional staff al­lo­cated to re­spec­tive projects are closely in­volved through­out the as­sign­ment and pro­vide a main source of con­ti­nu­ity. A num­ber of key ex­perts en­able de­liv­ery of all the ob­jec­tives in a timely man­ner. Li­censed by the MFSA to act as an ap­proved au­di­tor to carry out ex­ter­nal au­dits of in­sur­ance com­pa­nies and in­sur­ance in­ter­me­di­ary com­pa­nies, PKF Malta works closely with spe­cialised ser­vice providers within the lo­cal in­dus­try to cater for a client’s needs in­clud­ing set-up ar­range­ments.

Be­ing a mem­ber firm of PKF In­ter­na­tional, it also teams with 400 over­seas of­fices to de­liver spe­cialised tech­ni­cal so­lu­tions (in­clud­ing ac­tu­ar­ial ser­vices) to the lo­cal in­sur­ance in­dus­try. It is worth not­ing that in the UK there is a plateau­ing ef­fect ex­pe­ri­enced by the Cap­tive mar­ket, which is partly at­trib­uted to a soft mar­ket. An­other chal­lenge is the on­set of Sol­vency II for smaller in­sur­ance units as they go through a slow learn­ing curve. How­ever the ben­e­fits of this reg­u­la­tory re­form are start­ing to be felt within the mar­ket and un­doubt­edly there is a win­dow of op­por­tu­nity to re­fo­cus again on mar­ket de­vel­op­ment.

Re­cent ar­ti­cles in the in­sur­ance me­dia are also char­ac­ter­ized with topics on un­cer­tain­ties linked to Brexit talks and un­fore­seen ram­i­fi­ca­tions.

In con­clu­sion, PKF Malta be­lieves in the po­ten­tial growth of the US cap­tive own­ers who tar­get Euro­pean risks. For ex­am­ple, it has be­come a poignant need for multi­na­tion­als with op­er­a­tions in Europe to in­sure their Em­ployee Ben­e­fits through Cap­tives. Cer­tainly in the past this was a rather dif­fi­cult task which how­ever is be­com­ing more pos­si­ble than ever, reap­ing the full ben­e­fits of pass­port­ing rights to set up cap­tives domi­ciled any­where in EU.

Try Malta – it pro­vides a per­fect fit.

Danielle Her­mansen, ACII Char­tered In­sur­ance Risk Man­ager, Mgt (Maas­tricht), is a di­rec­tor at PKF. She has been in the in­sur­ance in­dus­try for 15 years, work­ing both as an un­der­writer and a bro­ker, spe­cial­iz­ing in com­mer­cial busi­ness. She has more re­cently worked in the Cap­tive in­sur­ance man­age­ment in­dus­try

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