This document discusses owning a cell in a protected cell company (PCC) for insurance purposes. A PCC allows different owners to participate in one company while segregating cellular assets and liabilities. Cells in a PCC can be set up with less capital than standalone companies as minimum requirements only apply to the PCC as a whole. Malta is highlighted as an attractive location for PCCs due to its PCC legislation, approachable regulator, EU single passport, tax efficiency and other factors. Owning a cell in a PCC provides a lower cost alternative to a standalone insurance company or captive. Cells avoid minimum capital requirements and can access reinsurance and lower running costs. The document also provides information on Atlas Insurance P

1. EU Insurance
Protected Cells
Captives on a budget
Ian-Edward Stafrace
MIRM FCII PIOR Chartered Insurer
Risk Analyst & International Business Development
ian.stafrace@atlas.com.mt
Atlas Insurance PCC Ltd
www.atlaspcc.eu
Financial Services In Malta
Stockholm Grand Hotel, 5 Oct 2011

2. Owning a Cell in a
Protected Cell Company (PCC)
Insurance PCC Purpose
 Segregate cellular assets & liabilities
 Allow different owners with varying
interests to participate in 1 company
 Cells set up with less capital as min
requirements apply to PCC as a whole
PCC
Cell
Cell
Core
Cell
Cell
www.atlaspcc.eu

3. Why Malta
Only EU State To
Have PCC Legislation
Approachable
Regulator
EU Single Passport
English, Time Zone,
Flight Connections
EU Compliant
Regulations
Tax Efficient
www.atlaspcc.eu

4. Protected Cells: “Low-cost” Alternative
To Owning A Stand Alone Insurance Company Or Captive
No Minimum Guarantee Fund (MGF) Required
• Complying with EU
directives through PCC
core capital
• E.g. Typical minimum
capital needed for
general insurer with €1m
annual premium:
EU Standalone Insurer
EU Protected Cell
No Fronting Required for EU/EEA Risks
Reinsurance access for smaller investors
Lower Running Costs vs. Stand-Alone companies
www.atlaspcc.eu

5. Benefits of PCC under Solvency II
Pillar I
Quantitative Requirements
• Core puts up Minimum Capital Required (MCR)
• No MCR absolute floor applies to cells (unlike
standalones which require min €2.3m/3.5m
as per Solvency 1)
• Cells only need to put up own Solvency
Capital Requirement (SCR), typically lower
than MCR for small undertakings
• PCCs with active cores lend diversification
benefits to cells where secondary recourse is
allowed, further lowering SCR
Pillar II
Pillar III
Governance, Risks
Management & Internal
Control Requirements
Disclosure
Requirements
All already catered
for by PCC under
its regulated
license
All procedural
structures &
resources in
place to report
& publish
results as one
single legal
entity
 Maltese PCC = Cost sharing of SII requirements &  Capital for cells
Cell
Cell
Core
Cell
Cell

6. Atlas Insurance PCC Ltd
History
Benefits
Under
Solvency II
Independent
PCC
• Leading Maltese Insurer since 1920s
• First EU PCC after converting in 2006
• Active non-cellular core in which local business is written
• Less capital required whilst protecting the policy holder as Atlas can
allow cells to have secondary recourse to its active core
• Less costs thanks to shared governance, risk management & reporting
• Enable subcontracting of cell management to authorised insurance
managers
Strong Core
Solvency Position
At End 2010 (Solvency I)
At End 2009 (Solvency I)
At End 2009 (QISV Solvency II)
Regulatory
Solvency
Required (SCR)
€3.5m
€3.2m
€7.1m
Actual
Position
Solvency
Ratio
€14.5m
€13.6m
€16.9m
414%
425%
237%