On 2 June 2019, the Malta Financial Services Authority (“MFSA”) has taken regulatory action against Setanta Insurance Company Limited (the “Company”), now in liquidation, for committing the following serious regulatory breaches of the Insurance Business Act Chapter 403 of the Laws of Malta and the MFSA Act, Chapter 330 of the Laws of Malta:
- Failure to comply with its Conditions of Authorisation;
- Failure to maintain the required margin of Solvency;
- Failure to maintain adequate Technical Reserves;
- Failure to submit an effective plan for the restoration of a sound financial position; and
- Failure to abide by the MFSA’s directive to cease writing new business including renewal of policies.
The MFSA has decided that in accordance with the parameters of the law, the above failures merit an administrative penalty of €475,192, however the Authority is cognisant of the fact that given the Company’s frail financial position, the imposition of an effective pecuniary penalty might cause further detriment and prejudice to the rights of policy holders and other claimants who might still be trying to recover their funds. Consequently the MFSA has decided that the administrative penalty of €475,192 it was going to otherwise impose upon the Company, shall be limited to a notional penalty of the same amount, which whilst reflecting the seriousness of the aforementioned breaches, shall not be paid to the MFSA in order to protect and safeguard the rights of policy holders and claimants.
This Decision of the MFSA may be appealed before the Financial Services Tribunal within the period as prescribed by the applicable law.
This notice is being published as part of the Authority’s standard enforcement policy and in terms of the powers vested in the MFSA by virtue of Article 16(8) of the Malta Financial Services Authority Act.