The Package Travel Insolvency Fund Regulations were enacted on the 4th October 2016, through Legal Notice 315 of 2016 . (Subsidiary legislation 409.18) to satisfy EU Directive 2015/2302 on Package Travel and Assisted Travel Arrangements, which will replace Council Directive 90/314/EEC currently reflected in Subsidiary Legislation 409.01.
These regulations were purposely drawn for the setting-up of an Insolvency Fund to provide security to consumers for a refund of money paid upfront for services booked and for the repatriation of the travellers in the event of insolvency of a 'travel package organiser.' The fund is managed and administered by a Managing Board set-up by virtue of these Regulations.
Consumers are to ensure that they buy travel packages only from Licensed Travel agents (listed below), who are obliged to issue a Certificate showing the MTA license number amongst other information of the package bought. In the event of an insolvency, consumers must first present this certificate in order that a claim is validated. Travel agents not shown in the list are not authorised to sell package travel and would be in breach of the law if they do so. They are not protected against insolvency and therefore consumers will be unable to submit any claim in the event of an insolvency.
Frequently asked questions by Consumers
Q. What makes a package Travel?
A. A package holiday comprises two or more travel-related services that are advertised and sold in a package, e.g. transport and accommodation. Air-transport can be via charter or scheduled air-tickets.
Q. Who is in charge of the Insolvency Fund?
A. The Fund is administered by the Insolvency Fund Managing Board which is made up of representatives of FATTA (Association of the travel sector), the Malta Tourism Authority and the Chairman appointed by the Minister of Tourism. The Board reports to the Malta Tourism Authority.
Q. Who will benefit from the Fund?
A. This fund is for the benefit of consumers that buy package travel. It provides a safety net for consumers that buy a package from licensed travel agents, who are therefore subscribed to the fund and protected against insolvency.
Q. Does one still need to be insured?
A. Yes. The fund does not replace travel insurance which covers accidents, lost luggage and other risks.
Q. Is this type of Insolvency Protection available in other European countries?
A. Yes. Insolvency Protection is a European Union mandatory requirement. With the introduction of the Insolvency Fund, Maltese citizens will be protected if a travel package organiser licensed by the Malta Tourism Authority and subscribed to the Fund becomes insolvent, as is the case in other EU countries.
Q. How will payments be effected in case of insolvency?
A. In the event that a package travel organiser becomes insolvent, consumers can make a claim for the refund of moneys paid upfront for services booked and for the repatriation to Malta or place of origin, if the travel package organiser files for bankruptcy and the consumer is caught abroad. Claims can only be made on presentation of the certificate issued by the package travel organiser.
Q. What is the certification scheme?
A. The certification scheme refers to the certificate which must be is issued for every package sold. Through this certification system the managing board will be able to evaluate the financial standing and risk exposure of every licensed travel agent and impose additional security requirements it deems appropriate.