The Malta Financial Services Authority has identified recurring weaknesses in the distribution of insurance based investment products and retirement products by tied insurance intermediaries. Its 2026 mystery shopping exercise found inadequate customer assessments and records, incomplete precontractual disclosures, unbalanced explanations of costs and risks, and product comparisons that were not always objective or substantiated. Some communications also risked crossing the boundary into regulated investment advice, while tax incentives were sometimes emphasized over customers’ needs and the products’ underlying features. The risk based exercise comprised 17 interactions and covered about 50% of applicable tied insurance intermediaries, representing approximately 58% of related gross written premiums. The authority expects intermediaries to assess and document customers’ demands and needs before discussing products in detail, provide Key Information Documents and other disclosures sufficiently in advance, and present returns, risks, costs, product features and tax considerations fairly and consistently. Intermediaries not authorized to provide investment advice must limit communications to factual, objective and balanced product information. Insurance undertakings remain responsible for compliance by their tied intermediaries and should strengthen governance, training, record keeping, quality assurance and oversight across all distribution channels. The authority will conduct further mystery shopping and may take regulatory action against intermediaries and their principals where it identifies shortcomings.

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