Malta is the only European Union member state to have established a legal framework that regulates Incorporated Cell Companies and attracts insurance business to domicile in the jurisdiction.
A cell company can create one or more cells with its own distinct assets and liabilities that are separate from the assets and liabilities of other cells and the parent cell company itself.
ICC Companies in Malta – The Insurance Sector
Although legislation allowing cell companies to carry out insurance sector business has been in force in Malta since 2004 in the form of Protected Cell Company (PCC) regulations, the ICC Regulations of 2010 employ a totally different approach to the cell company concept.
In Malta, the ICC was introduced as a corporate vehicle for the insurance sector through the introduction of the Companies Act (Incorporated Cell Companies Carrying on Business of Insurance) Regulations, Legal Notice 558 of 2010.
Both PCCs and ICCs can totally segregate assets and liabilities, but incorporated cells and protected cells each have a different status at law.
The difference between PCC and ICC
With PCCs, a protected cell does not have an autonomous legal status, and each cell must transact through the parent PCC itself.
With ICCs, however, each incorporated cell has its own legal status, which is completely separate from the other cells and the parent cell company. Put simply, each and every part of the ICC can do its own business and effect its own transactions with complete autonomy from the sum of parts that constitutes the ICC.
In an ICC, each cell has a separate memorandum and articles and its own members. As a result of this setup, individual cells can be used to carry out their own business activities.
Also, members of the cell parent company do not need to be members of the individual cell and vice versa.
Both the Incorporated Cell Company and its individual cells require individual authorisation in terms of the Insurance Business Act. In view of legal and operational independence, the individual cells must abide by the statutory financial obligations applicable to insurance companies and affiliated companies.
Under Maltese law, an ICC’s status is of a limited liability company, allowing it to effect transactions and enter into business contracts with third parties in its own name.
The Regulations also provide that a non-cellular company (a normal company) or even a PCC may be transformed into an ICC in accordance with the relevant provisions.
Incorporated Cell Licensing – ICC’s
Each Incorporated Cell of an Incorporated Cell Company must be licensed separately in terms of the Investment Services Act, 1994, even though they form part of the Incorporated Cell Company.
In Malta, ICCs can be set up in a variety of ways: incorporation, continuation (re-domiciliation), conversion or division.