Britain's formal notification of its exit from the EU on 29 March, days after the EU celebrated its 60th anniversary, marks a historic turning point in tough negotiations with EU 27 Member States during the two-year countdown to UK's final separation. The wider implications of UK's exit shall unfold during the next months in negotiations led by EU Chief negotiator Michel Barnier and constructive talks that commenced last week between EU Council President Donald Tusk and Prime Minister Theresa May to pave the way for UK's final withdrawal and a new relationship between the EU and the UK.
One of the grave anticipated losses resulting from UK's exit include its exclusion from the single market, namely its exclusion from the free movement of goods, services and workers within the EU. This will also impact insurance businesses in the UK which will lose their right of direct access to the single market1.
However, several UK insurance businesses are studying alternative scenarios involving migrating their European business to other member states, with Malta being one of the preferred options.
The accessibility of the Maltese jurisdiction and institutions, a stable political framework, excellent communication, a well-educated English-speaking workforce and a Mediterranean climate are some of the many attributes Malta has been hailed for by all insurance business partners which relocated their operations to this jurisdiction. Malta's appeal as an insurance jurisdiction is further supported through its experience as a seat of various international (re)insurance undertakings, the continued enjoyment of all the benefits of EU membership including passporting facilities to all other EU/EEA jurisdictions and infrastructure for re-domiciliation and cross border mergers, the extensive measures for the transfer of insurance business through portfolio transfers and the availability of a multitude of Internationally renowned highly-qualified and highly-experienced service providers readily available at a fraction of the cost traditionally experienced in the busier financial services centres of Europe.
Another factor which has made Malta a popular destination for (re)insurance undertakings is the avant garde structures available under Maltese legislation which allows (re)insurance undertakings to be created as Protected Cell Companies (PCCs). A PCC is a regular trading company which can create one or more cells for the purpose of segregating and protecting the cellular assets from each other and from the assets of the company. This enables promoters to come together within the PCC framework and to share overhead costs whilst being protected from each other's liabilities. Alternatively, a single promoter can write separate lines of business from separate cells, thus segregating each line of business.
Brexit has as of late highlighted the many advantages to be gained through the EU that the loss of membership will be leaving the UK lacking. Today, the EU 27 are committed to work together to reinforce the continued importance of maintaining the EU intact for the collective benefit of all jurisdictions, citizens and commercial undertakings which form part of it.
As one of the leaders in the insurance legal sphere, with a dedicated team of insurance and reinsurance lawyers and experts, we at GANADO Advocates can work with you and provide you with the necessary support in the coming months in creating contingency plans, with Malta as an ideal destination for your commercial needs.
1. Also, the United Kingdom leaving the Union will impact EU businesses trading with and operating in the United Kingdom and UK businesses trading with and operating in the Union. Similarly, it may affect those who have entered into contracts and business arrangements or take part in EU-funded programmes based on the assumption of continued British EU membership. Nations should seek to prevent a legal vacuum once the Treaties cease to apply to the United Kingdom and, to the extent possible, address uncertainties.
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