S.L. 403.22 ст. 3Applicabilityofthe Act.

(1) Subject to sub-regulations (2) to (4) and pursuant to

Article 4 of the Solvency II Directive, an insurance undertaking whose head office is in Malta which fulfils all of the following conditions:

(a) the annual gross written premium income of the undertaking does not exceed €5,400,000;

(b) the total of the undertaking’s technical provisions, gross of the amounts recoverable from contracts of reinsurance and special purpose vehicles, as set out in article 18E of the Act, does not exceed €26,600,000;

(c) where the undertaking forms part of a group, the total of the technical provisions of the group defined as gross of the amounts recoverable from contracts of reinsurance and special purpose vehicles does not exceed €26,600,000;

(d) the business of insurance carried on by the undertaking does not include insurance or reinsurance activities covering liability, credit and suretyship insurance risks, unless they constitute ancillary risks within the meaning of article 5(2) of the Act;

(e) the business of insurance carried on by the undertaking does not include reinsurance operations -

(i) exceeding €600,000 of its gross written premium or exceeding €2,700,000 of its technical provisions gross of the amounts recoverable from contracts of reinsurance and special purpose vehicles;

(ii) with more than 10% of its gross written premium income or more than 10% of its technical provisions gross of the amounts recoverable from contracts of reinsurance and special

*see regulation 1(3) of these Regulations, as originally promulgated. purpose vehicles, shall be exempt from the requirements of the Solvency II Directive.

(2) The provisions of the Act, regulations and Insurance Rules issued thereunder shall apply, subject to such modifications, variations and conditions as shall be specified by means of Insurance Rules issued for the purposes of this regulation, to an undertaking which falls under sub-regulation (1).

(3) Without prejudice to sub-regulation (1), the Act, regulations and Insurance Rules issued thereunder shall apply in their entirety to an insurance undertaking which fulfils the conditions specified under sub-regulation (1), from the fourth year, if any of the amounts set out in sub-regulation (1)(a), (b), (c) or (e) are exceeded in each of the three preceding consecutive years after 1 January 2016.

(4) Subject to sub-regulation (6), the Act, regulations and Insurance Rules issued thereunder shall apply in their entirety, to an insurance undertaking which, on or after 1 January 2016, seeks to be granted an authorisation to carry on business of insurance pursuant to article 7 of the Act, if any of the amounts set out in sub-regulation (1)(a), (b), (c) or (e) are expected to be exceeded within five years from the date on which the undertaking has obtained such an authorisation.

(5) Notwithstanding that an insurance undertaking fulfills all of the conditions set out in sub-regulation (1), if the undertaking exercises a European right pursuant to the European Passport Rights for Insurance and Reinsurance Undertakings Regulations, 2015, the Act, regulations and Insurance Rules issued thereunder shall apply in their entirety to such an undertaking.

(6) Where -

(a) an insurance undertaking is not exercising a European right pursuant to the European Passport Rights for Insurance and Reinsurance Undertakings Regulations, 2015; and

(b) none of the thresholds set out in sub-regulation (1):

(i) has been exceeded for three consecutive years; and

(ii) is expected to be exceeded during the following five years, the provisions of the Act, regulations and Insurance Rules, as modified by Insurance Rules issued for the purposes of sub-regulation (2), shall apply.