On the 23^rd April 2014, the Malta Financial Services Authority (MFSA) announced that the Insurance Business (Assets and Liabilities) Regulations (the “Regulations”) 2007 have been amended so as to clarify the manner in which the equity yield for variable interest rate is calculated.

The amendment follows feedback received from the insurance market subsequent to a consultation process initiated on the 10^th January 2014.

The amendment effectively allows authorised companies to calculate the equity yield as the value of the dividend yield calculated in accordance with sub-regulation (5) of the Regulations, if the dividend yield is more than the earnings yield. In the event that the dividend yield is less than the earnings yield, the equity yield is to be calculated as 50% of the sum of the dividend yield and the earnings yield.

The said amendments to the Insurance Business (Assets and Liabilities) Regulations, 2007, came into force on the 28^th March 2014.