Malta has streamlined the accounting requirements for Reinsurance Special Purpose Vehicles (RSPVs), a move expected to significantly bolster the country’s insurance-linked securities (ILS) market. According to Malta-based law firm Ganado Advocates, these changes offer a more proportionate regulatory environment for complex risk vehicles.
The Accountancy Profession (General Accounting Principles in respect of certain Eligible Entities related to the business of Insurance) Regulations (GAPEE) originally allowed specific re/insurers to opt out of IFRS 17 in favour of a local accounting framework.
With the introduction of Legal Notice 299 of 2025, the list of entities eligible for this opt-out has been expanded to include: insurance and/or risk transferee vehicles, insurance and/or reinsurance parent undertakings and risk transferee vehicle parent undertakings.
Ganado Advocates highlighted that the amendment recognises that the adoption of a more complex and resource-intensive IFRS 17 framework are often disproportionate for RSPVs, SCCs, and securitisation vehicles.
“The amendments deliver a significant benefit to the insurance-linked securitisation (ILS) sector by materially reducing compliance and administrative burdens for Malta-based RSPVs and RSPV SCCs through the introduction of a more accessible, proportionate, and functional GAPEE framework,” Ganado Advocates said.
Importantly, Ganado Advocates also explained that the wording of the amendment ensures that if any of these vehicles engage in a transaction defined as re/insurance, they can choose GAPEE over IFRS 17.
This flexibility allows parent companies to prepare financial statements that are more aligned with the actual nature of their operations rather than rigid international standards.
“The amendments to the Regulations complement Malta’s selling points when it comes to ILS transactions. These new amendments will not only facilitate the off-loading of risks by (re)insurance companies to different vehicles and using different risk mitigation strategies (rather than limiting themselves to the traditional methods of reinsurance/retrocession) but also cement Malta’s position when it comes to offering of securities,” Ganado Advocates concludes.
