– Solvency follows the EU Solvency 1 Regime.
– Minimum Guarantee Fund depends on the class of business written and is in line with EU practice. Own funds may consist of paid up share capital (minimum 50%) and a mixture of issued and unpaid share capital, preferential share capital (maximum 25%), subordinated debt (maximum 25%), retained profits and reserves.
– Solvency test is the greater of 18% of first €57.5 million of GWP and 16.1% above €57.50 million of GWP and 26% of the first €40.3 million of claims and 23% above €40.3 million of claims. The percentage includes a buffer of 50% currently being required by the MFSA.
– Credit for reinsurance based on a ratio of net incurred claims as a percentage of gross incurred claims to a maximum of 50%.
– Net incurred claims is defined as claims less reinsurance recoverable.
