S.L. 403.6 ст. 6Recovery of administrative penalties.

Where a notice imposing an administrative penalty is served on a person and -

(a) such person fails to appeal within such time as an appeal may be entered, and fails to pay the penalty so imposed; or

(b) appeals within such time to the Financial Services Tribunal and the appeal is withdrawn or the Tribunal confirms the penalty in the amount fixed by the competent authority or in an amount reduced by it, and the penalty is not paid within fifteen days from the date of the withdrawal of the appeal or the date when the Tribunal confirms the penalty as aforesaid, then, in every such case, the competent authority shall be entitled to take civil action to recover the amount due to it. FIRST SCHEDULE

(Regulation 3)

Penalties which are enforceable by prosecution in the courts of Malta Second Column Third Column Fine (multa) Imprisonment not less than €230 but not more than €18,600 not more than three months not less than €9,300 but not more not less than one month but than €93,200 not more than six months not less than €46,600 but not more not less than six months than €466,000 but not more than four years.

SECOND SCHEDULE

(Regulation 3)

Administrative penalties which may be imposed by the competent authority without recourse to a court hearing Second Column Third Column Penalty Daily penalty not less than €1,000 but not more not less than €15 but not more than €23,000 than €35 not less than €23,000 but not more not less than €25 but not more than €50,000 than €75 not less than €50,000 but not more not less than €60 but not more than €150,000 than €116. THIRD SCHEDULE

(Regulation 4)

Court Penalties

First Second Column Column Article Offence 67(1) with Carrying on business of insurance in or from Malta reference to without authorisation 6(1) 67(1) with Carrying on business of insurance where authorisation is reference to automatically revoked 25 67(1) with Carrying on business of insurance where authorisation is reference to suspended or revoked 26 67(1) with Failure of an authorised insurance undertaking whose reference to head office is in Malta to observe the prohibition of free 41(2) disposal of the undertaking’s assets, whether such assets are situated in Malta or in a country outside Malta, or, in the case of an authorised third country insurance undertaking, prohibition of free disposal of the undertaking’s assets situated in Malta or in any other country outside Malta if such assets relate to the undertaking’s business in Malta 67(1) with Exchange of information about policies, policyholders, reference to potential policyholders, insureds, claimants or other 60(1) related parties amongst insurers, intermediaries and the police other than for the purposes of preventing, detecting or suppressing insurance fraud 67(2)(a) Obtaining by deceit authorisation under the Act, or pursuant to any provisions of this Act or any regulations, Insurance Rules or Conduct of Business Rules made thereunder 67(2)(b) Knowingly being a party to, or procuring or aiding and abetting, any contravention of any provision of the Act or level any regulations, Insurance Rules or Conduct of Business Rules made thereunder 67(2)(c) Obstructing a person exercising rightsconferred by the Act or any regulations, Insurance Rules or Conduct of Business Rules made thereunder; 67(2)(d) Any person who is knowingly a party to the carrying on of the business of insurance with a fraudulent intent or for a fraudulent purpose Second Column Third Column

Offence Penalty level Failure of director, controller, officer or employee of an 2 undertaking to secure compliance by the undertaking with any provision of the Act or of any regulations, Insurance Rules or Conduct of Business Rules made thereunder, or any authorisation or permit issued thereunder; or to ensure the correctness of statements made or information given under any of those provisions; or removes, destroys, conceals or fraudulently alters any document with intent to avoid detection of the commission of an offence under any of those provisions. offence arising under any provision of the Act not 2 provided for in this Schedule

FOURTH SCHEDULE

(Regulation 4)

Schedule "Administrative Penalties" are those made under and for the article 67(6) of the Act.

Administrative Penalties

Second Column Third Column

Infringement Penalty level Failure of an authorised insurance undertaking carrying on 1 direct business to seek authorisation to extend its business to reinsurance business Failure of an undertaking whose head office is in Malta to 1 notify the competent authority of the carrying on of business of insurance in a Member State or EEA State, other than Malta, in exercise of a European right Carrying on business of insurance without authorisation, 1 in classes other than those for which an authorised undertaking is already authorised Failure of an authorised undertaking to comply with any 2 condition of authorisation First Second Column Column Article Infringement 8(4) Failure of an authorised undertaking to provide the competent authority with information relating to close links 10(3) Opening a branch, agency or office, or holding itself out as carrying on business of insurance in or from a country outside Malta or setting up or acquiring any subsidiary in a country outside Malta, without the consent of the competent authority 11(4) Failure of a third country insurance undertaking or a third country reinsurance undertaking to maintain in Malta at all times an amount of eligible own funds in accordance with Insurance Rules and deposit a specified proportion of such own funds as may be prescribed under article 18G 14(2) Failure of an authorised undertaking to obtain the prior written approval of the competent authority in relation to ancillary own fund items 15(1) Failure of an authorised undertaking to hold eligible own funds covering the Solvency Capital Requirement 15(2) Failure of an authorised undertaking to calculate the Solvency Capital Requirement in accordance with the standard formula or, a full or partial internal model as approved by the competent authority 16(1) Failure of an authorised undertaking to notify the competent authority as soon as it observes that the Solvency Capital Requirement is no longer complied with, or where there is a risk of non-compliance in the following three months 16(2) Failure of an authorised undertaking to submit a realistic recovery plan for approval by the competent authority within two months from the observation of non-compliance with the Solvency Capital Requirement 16(3) Failure of an authorised undertaking to take the necessary measures to achieve within six months from the observation of non-compliance with the Solvency Capital Requirement, the re-establishment of the level of eligible own funds covering the Solvency Capital Requirement or the reduction of the risk profile of the undertaking to ensure compliance with the Solvency Capital Requirement 16(6) Failure of an authorised undertaking to observe the restriction or prohibition of the free disposal of the assets of such undertaking 17(1) Failure of an authorised undertaking to hold eligible basic own funds covering the Minimum Capital Requirement Second Column Third Column

Infringement Penalty level Failure of an authorised undertaking to immediately 2 inform the competent authority where it observes that the Minimum Capital Requirement is no longer complied with or where there is a risk of non-compliance in the following three months Failure of an authorised undertaking to submit a short- 2 term realistic finance scheme for approval by the competent authority within one month from the observation of non-compliance with the Minimum Capital Requirement Failure of an authorised undertaking to observe the 2 restriction or prohibition of the free disposal of the assets of such undertaking Failure of an authorised undertaking to notify the 2 competent authority immediately where such undertaking has identified that it is in a deteriorating financial condition Failure of an authorised undertaking to establish and 3 maintain technical provisions with respect to all of its insurance and reinsurance obligations Failure of an authorised undertaking to value and calculate 3 technical provisions in accordance with Insurance Rules made for the purposes of article 18E Failure of an authorised undertaking to increase the 3 amount of technical provisions so that they correspond to the level determined by such Insurance Rules made for the purposes of article 18E Failure of an authorised undertaking to observe the 2 prohibition of the free disposal of the assets of such undertaking Failure of an authorised undertaking with its head office in 1 Malta to disclose publicly and on an annual basis a report on the undertaking’s solvency and financial condition Failure of an undertaking to deposit in custody assets of a 3 prescribed kind or amount with a person prescribed by regulations made for the purpose of article 18G Transferring, withdrawing or encumbering the 3 undertaking’s assets required to be maintained in Malta either without permission of the competent authority or without proving to the competent authority that the undertaking has no further liability Failure of the Board of Directors to act as the ultimate 3 persons responsible for compliance by the authorised undertaking with the Act, regulations, Insurance Rules and Conduct of Business Rules issued thereunder and any obligations pursuant to the Solvency II Directive First Second Column Column Article Infringement 18I Failure of an authorised undertaking to have in place an effective system of governance which provides for sound and prudent management of the business of the undertakings in accordance with Insurance Rules made for the purposes of article 18I 19(2) or (3) Failure of an authorised undertaking whose head office is in Malta or a third country insurance undertaking or a third country reinsurance undertaking applying for authorisation under article 7 to carry on business of insurance in or from Malta to inform the competent authority in writing of altering its financial year 20(1) Failure of an authorised undertaking to forward annually to the competent authority a copy of the undertaking’s audited financial statements; or to exhibit those statements within a specified period or in a manner provided by article 20 20(1A) Failure of an authorised undertaking to provide a copy of its audited financial statements to a person applying to the undertaking for a copy thereof 21(1) Failure of an authorised undertaking to appoint an approved auditor 21(5) Failure of auditor to give notice to the competent authority if he resigns, does not seek re-appointment, qualifies the audit report or to specify reasons in the case of resignation 21(6) Failure of an authorised undertaking to give notice in writing to the competent authority if it receives notice of a resolution to appoint as auditor a person other than the retiring auditor or not to re-appoint the retiring auditor 21(7) Failure of an authorised undertaking to notify the competent authority in writing, or to notify the competent authority in writing within a specified period, the reasons for terminating the appointment of the undertaking’s auditor 21(8) Failure of an authorised undertaking to change auditor if so required by the competent authority 22(1) Failure of an authorised insurance undertaking carrying on long term with-profits business in terms of classes I and III, as specified in the Second Schedule to the Act, to appoint an approved actuary 22(2) Failure of an authorised insurance undertaking to inform the competent authority in writing within a specified period, of the appointment of an actuary, or termination of appointment of an actuary, as actuary of the undertaking 22(4) Failure of actuary to give reasons in writing to the competent authority for the termination of his appointment as actuary of an authorised insurance undertaking Second Column Third Column

Infringement Penalty level Failure of an authorised insurance undertaking to forward 2 to the competent authority a copy of the actuary’s report, together with the audited financial statements Failure of an auditor or an actuary to inform the competent 2 authority of any of matters, facts and decisions as provided by article 24 Failure of an authorised undertaking to comply with and 2 otherwise give effect to any measures taken by the competent authority pursuant to article 28 Failure of an authorised undertaking to furnish the 2 competent authority with information or documentation as required including existing telephone and existing data traffic records; or with information and documentation verified in a manner as specified; or to attend before the competent authority, or a person appointed by the competent authority, to answer questions and provide information or documentation as required Failure of an authorised undertaking to disclose to the 1 competent authority where information or documentation, as required, which is not in the undertaking’s possession, may be found; failure of a person, including a person to which the undertaking has outsourced any activities or functions, to provide the competent authority with information or documentation in his possession Failure of an officer or an agent of an authorised 1 undertaking to produce to an inspector all books and documents of, or relating to, the undertaking; or to give an inspector all assistance in connection with an examination of the affairs of the undertaking by the inspector Failure of a person to assist the competent authority to 2 enter and search premises to obtain information or documentation Failure of a person to comply with and otherwise give 1 effect to any directive imposed by the competent authority Failure of an authorised undertaking to remedy such 1 weakness or deficiency identified by the competent authority as a consequence of the supervisory review process Failure of an authorised undertaking to apply a capital 2 add-on set by the competent authority in accordance with article 31C Failure of an authorised undertaking to remedy the 2 deficiencies that led to the imposition of the capital add-on without delay Failure of an authorised undertaking to forward to the 1 competent authority the information which is necessary for the purposes of supervision, in terms of article 32 First Second Column Column Article Infringement 32C(12) Failure of a parent undertaking which has its head office in Malta to provide the competent authority with the required information following a request by the group supervisor 33(1) Transferring the authorised insurance undertaking’s rights and obligations under general business policies, or general business policies of a description, without the approval of the competent authority 35(1) Transferring an authorised insurance undertaking’s long term business, in whole or in part, without the approval of the Financial Services Tribunal 37(1) Transferring an authorised reinsurance undertaking’s business, in whole or in part, without the approval of the competent authority 37A Failure of an authorised undertaking to notify the competent authority prior to accepting the whole or part of the general business or long term business from an undertaking whose head office is in a country outside Malta 38(1) Failure of a person to notify the competent authority of a decision to acquire or increase a qualifying shareholding in an authorised undertaking; or to furnish the information required to be furnished as may be determined by Insurance Rules 38(2) Failure of a person to notify the competent authority of a decision to reduce or divest itself of a qualifying shareholding in an authorised undertaking; or to furnish the information required to be furnished as may be determined by Insurance Rules 38(4) Failure of an authorised undertaking and its directors to notify the competent authority of a person’s intention to acquire, increase, reduce or divest itself of a qualifying shareholding in the undertaking 38C(2) Failure of directors and qualifying shareholders of an authorised undertaking to notify the competent authority where the undertaking intends to merge with another undertaking, or to undergo reconstruction or division, or to increase or reduce its nominal or issued share capital or to effect any material change in voting rights 39(1) and Failure of an authorised undertaking to give notice, or to 40A give notice within a specified period, to the competent authority of the undertaking’s intention to cease to carry on, in whole or in part, the business it is authorised to carry on 40 and 40A Failure of an authorised undertaking issued with a permit to cease to carry on the business it was authorised to carry on, from desisting to effect and carry out new contracts of insurance in the business permitted to cease Second Column Third Column

Infringement Penalty level Failure of an authorised undertaking issued with a permit 2 to cease to carry on the business it was authorised to carry on, to service or run-off contracts of insurance effected and carried out before the specified date of cessation Failure of an authorised undertaking to immediately notify 2 in writing the competent authority upon taking a decision to dissolve and wind up Dissolving and winding up voluntarily by an authorised 3 undertaking carrying on long term business without the consent of the competent authority Failure of an authorised undertaking and its directors to 2 notify the competent authority upon becoming aware that such undertaking intends to dissolve and consequentially wind up voluntarily Failure of holder of authorisation to carry on business of 1 insurance or holder of permit to service or run-off business of insurance to notify the competent authority in writing of any material change in documentation or information provided, or required to be provided, by or under the Act and any regulations, Insurance Rules or Conduct of Business Rules made thereunder Failure of an authorised undertaking whose head office is 1 in Malta to submit to the competent authority in writing for the authority’s approval particulars of any proposed addition or alteration to the undertaking’s memorandum or articles of association or other instrument constituting the undertaking Failure of an authorised undertaking whose head office is 1 in Malta to inform at least once a year, the competent authority of the names of the persons holding a qualifying shareholding in the undertaking and the percentage of such holding in the form, manner and content within such date as determined by Insurance Rules made for the purposes of article 43 Failure of an authorised undertaking to notify the 1 competent authority on a continuous basis, with any change or circumstances which may give rise to the existence of close links Failure of an authorised insurance undertaking to issue 1 contracts of insurance expressed in a language as may be determined by Conduct of Business Rules made for the purpose of article 47 Failure of an authorised undertaking to issue contracts of 1 insurance expressed in the English language First Second Column Column Article Infringement 48(1) Issuing of advertisements or undertaking of promotional activities by an authorised insurance undertaking which generally mislead or deceive policyholders and the general public 48B Failure of an authorised undertaking to utilise the services of insurance intermediaries, reinsurance intermediaries, tied insurance intermediaries and ancillary insurance intermediaries enrolled under the Insurance Distribution Act or registered under Article 3 of the Insurance Distribution Directive or registered or regulated to carry out such services in a non-Member State or non-EEA State in accordance with the provisions of the laws applicable in such State 48D Failure of an authorised insurance undertaking and an authorised reinsurance undertaking carrying out insurance distribution activities and reinsurance distribution activities in terms of the Insurance Distribution Act to comply with the appropriate provisions of the said Act, any regulations, Insurance Distribution Rules and Conduct of Business Rules made thereunder. Any other infringement against any other provisions of the Act or any regulations, Insurance Rules or Conduct of Business Rules made thereunder, and failure of a person to comply with any condition, limitation, or requirement, or to satisfy any directive or order made or given under the Act or any regulations, Insurance Rules or Conduct of Business Rules, and not specifically provided for in this Schedule.