The MFSA is amending Insurance Rule 1 of 2007 - Own Funds of Companies Carrying on Business of Insurance to provide for an insurance and reinsurance company to include capital contribution as one of the components making up the company’s Own Funds.

Capital contribution will be permitted if it satisfies the minimum criteria set out in Title II of the Schedule to Insurance Rule 1. The Rule allows distribution of the capital contribution back to the contributor, to be madewith the prior approval of the MFSA and where such capital contribution is not used to cover the required level of own funds or margin of solvency of the company concerned.

As a consequence of the above paragraph 6 of Title II of the Schedule to the Rule has been renumbered as paragraph 7 and a new paragraph 6 has been inserted.

These amendments shall come into force on the 15 November 2013.

MFSA Ref: 67-2013