The Malta Financial Services Authority has issued three Dear CEO letters setting out the findings of a 2025 Outcomes-Based Supervision thematic review of complaints handling frameworks at credit institutions, insurance undertakings and investment firms. The review found recurring weaknesses in governance, implementation and consumer outcomes, with complaints handling in several cases remaining overly procedural rather than focused on fair client outcomes and clear, reasoned decisions. Across the three sectors, the Authority identified inconsistent or outdated complaints policies, including weak version control, missing senior management approval and fragmented documentation. It also found weak internal follow-up and root cause analysis, incomplete complaints registers that limited traceability and trend analysis, delays and inconsistencies against regulatory timelines, unclear or hard-to-access complaints procedures on firms' websites and disclosures, inadequate explanations in final decisions, incomplete information on escalation to the Office of the Arbiter for Financial Services, and cross-border handling challenges linked to language, distribution arrangements and unclear allocation of responsibilities. Firms are expected to align frameworks with regulatory requirements, keep policies current and approved, maintain comprehensive registers, publish clear and consistent client information, handle complaints fairly and within prescribed timelines, and strengthen monitoring, reporting and Board oversight, including regular reporting by the Compliance function. Licensed entities have been given one year to remediate the shortcomings identified under the Authority's multi-year Outcomes-Based Supervision framework. Follow-up supervisory assessments are planned during 2027 to test progress and the effectiveness of the enhancements put in place.
Malta Financial Services Authority 2026-04-28
Malta Financial Services Authority flags complaints handling weaknesses across credit institutions insurance undertakings and investment firms and gives firms one year to remediate
The Malta Financial Services Authority has issued three Dear CEO letters on a 2025 Outcomes-Based Supervision review of complaints handling at credit institutions, insurers and investment firms, highlighting recurring weaknesses in governance, implementation and consumer outcomes. Deficiencies include outdated policies, weak root cause analysis, incomplete complaints registers, delays, unclear client information, inadequate decision explanations and cross-border challenges. Firms must align frameworks with regulatory requirements, strengthen monitoring, reporting and Board oversight, with supervisory assessments planned in 2027 to test progress.