Martello’s
unique selling proposition is its Protected Cell
structure combined with its ability to directly write all classes
of general insurance across the EEA (made up
of all 27 EU member countries plus Iceland, Liechtenstein
and Norway).
A PCC is a corporate body segregated into legally
distinct portions, known as the “core” and underlying
“cells”. Gibraltar PCC legislation ensures that business
transacted through a cell is segregated from the activities of
other cells and that its assets cannot be used to pay the losses
or to meet the liabilities of other cells. By the same principle,
reinsurance is arranged specifically for each cell and is available
to pay only the losses of that cell. Because minimum capital requirements,
board appointments, fiscal representatives and all other corporate
responsibilities rest with the core a Martello cell offers organizations
all the advantages of a captive insurance facility
without the considerable direct and indirect costs of running
its own stand-alone captive.
As an EU Insurer Martello’s paper has
the same regulatory status as any local insurer
in an EEA risk territory, thereby making Martello an ideal
fronting facility for any organization with European
interests. Martello, in liaison with its fiscal representatives,
co-ordinates all local taxes and levies in the risk territories
and collects and pays these over to the relevant local authorities.
100% reinsurance out of the cell is permitted although the cell
user can opt to retain risk in the cell if required.
If it wishes to retain risk the cell user is
required to introduce appropriate levels of capital, sufficient
to cover its risk gap and technical solvency, and is issued with
cell redeemable preference shares to represent its equity interest.
Where the cell user does not wish to introduce the full requirement
in cash Martello can, in certain circumstances, rent capital to
the user. Where the cell is used purely for fronting there is
no need to introduce capital and no need to own shares, although
the option exists to do so if preferred.
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