Benefits of a PCC
A Protected Cell Company (PCC) provides a number of advantages compared to setting up a stand alone company. One of the key elements is that an insurance broker can conduct business through the ownership of a protected cell using the core’s capital.
The benefits of using a protected cell are as follows:
- Lower capital requirement: Each cell is only obliged to hold capital needed to protect its risks, while the own funds requirements apply to the PCC as a whole.
- Lower running costs: Protected cells also benefit from lower running cost compared to stand-alone companies since there is no need to set up a separate company. Owners benefit from simpler administration and shared overhead costs.
- Lower Risk: The risks within each protected cell will be legally segregated from other cells.
- Direct Writing into Europe: PCCs and their cells licensed in Malta can access EU markets through single-passport route, thus avoiding fronting arrangements.
- Favourable Tax Regime: PCCs and their cells benefit from Malta’s tax imputation system through which shareholders can claim a tax credit for the tax paid by the company.
- Faster authorisation processes: The application process for a cell is less demanding because the management of the PCC is already known to the regulator.
- First experience: Entities that have not had a great deal of exposure to the business of insurance can benefit from the experience of the cell company in regulatory issues, as well as the day-to-day running of an insurance broking company.