A protection and compensation scheme is available under local insurance business legislation should the insurer become insolvent in respect of claims and obligations that arise from a policy of insurance covering protected commitments where Malta is the country of commitment subject to such limitations, restrictions and exclusions as may from time to time be prescribed.
In terms of the Protection and Compensation Fund Regulations (SL 403.13), linked long term contracts of insurance, for example, are not protected commitments and thus the respective policyholders are not protected in the case of insolvency of the insurer.
The purposes of the Protection and Compensation Fund are only to:
- pay for any claims in the amounts prescribed by the Regulations against an insurer which have remained unpaid because the insurer became insolvent. These claims must be in respect of protected risks situated in Malta or protected commitments where Malta is the country of commitment; and
- compensate victims of road traffic accidents in certain specified circumstances
You should therefore also carefully consider these limitations/exclusions prior to making any decision to invest.