Benefits of a PCC

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. 

 

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