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Purpose: This blog provides brief insurance news and digest for the busy executives. It is a handy archive covering major insurance news in Malaysia and nearby countries. 

Disclaimer: While all attempts are made to ensure the accuracy of the news herein, we are not liable for any loss arising from the use of any information contained in this blog.

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Proposed enhancements to appointed actuaries' role 

Insurance News

  -  Mar 22, 2013
BNM is targeting to release for consultation its proposed enhancements to existing Guidelines on the Appointed Actuary in April this year. The proposed enhancements would include:
  1. Strengthen the effectiveness of the actuarial function in supporting the insurers' and takaful operators' management of insurance/takaful and financial risks.
  2. Limit the Appointed Actuary's involvement in the pricing of insurance/takaful products.
  3. Set out requirements to support more effective communications of key issues and concerns by the Appointed Actuary to the board and management.
  4. Greater expectations for the board to have a good understanding of important actuarial issues and how these bear on an insurer or takaful operator's risk appetite and business strategy.
  5. Extend the appointed actuary guidelines to general insurers and takaful operators, including the requirement of financial condition reports to be tabled by the appointed actuaries to the board.
Prudential Requirements Applicable to Appointed Actuaries - The 2012 Financial Stability and Payment Systems Report Related to efforts by the Bank to strengthen risk governance practices in financial institutions was an exercise undertaken by the Bank to review the existing prudential requirements applicable to Appointed Actuaries.


Posted by Loo Hai Friday, March 22, 2013 6:56:00 PM Categories: actuary BNM Regulations Risk Management Takaful
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Insurance related items in BNM's Annual Report 2012 

Insurance News

  -  Mar 21, 2013
BNM released it's annual report yesterday.  The following are the insurance related items and announcements:
  1. The Financial Services Act (FSA) will be effective in May or June this year.
  2. Separate licenses for life and general insurance segments would encourage greater prudence as life and general insurance are of different nature.
  3. Resident takaful operators are permitted to undertake investments abroad of any amount on behalf of their resident clients subject to RBC requirements.  This will be effective when FSA comes into force.

Source: KiniBiz, The Star


Posted by Loo Hai Thursday, March 21, 2013 9:17:00 PM Categories: BNM Takaful
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New legislation for takaful products near finalisation 

Insurance News

  -  Dec 20, 2012
New legislation for takaful products that gives a stronger legal basis to contracts devised by takaful operators is in its final stages of introduction. However, no time frame has yet been set for its launch.
Zeti says the legislation will help Bank Negara better regulate the industry.(File pic shows Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz delivering her keynote address "Banking on Islamic Finance Form Legality to Ecomic Value" at the 8th World Islamic Economic Forum in Johor Baru on December 6, 2012. Pic by ABDUL RAHMAN EMBONG/The Star.)
New Malaysian law for Islamic banking and takaful products - The Star KUALA LUMPUR: Malaysia is in the final stages of introducing a new legislation for Islamic banking and takaful products, Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said, which gives a stronger legal basis to contracts devised by financial institutions.


Posted by Loo Hai Thursday, December 20, 2012 5:39:00 PM Categories: BNM Regulations Takaful
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New legal framework for Takaful being enacted 

Insurance News

  -  Dec 6, 2012
The new legal framework for takaful is currently undergoing the legislative process towards its enactment. http://bit.ly/TAS1206a
Zeti: Legal framework for Islamic banking, takaful being enacted JOHOR BAHARU: The new legal framework for Islamic banking and takaful is currently undergoing the legislative process towards its enactment, Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz said.
Posted by Loo Hai Friday, December 7, 2012 10:29:00 AM Categories: BNM Regulations Takaful
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News Posts 20120924-20120930 

[Budget 2013] Takaful sector
1) Takaful assets RM18.3 bil account for 9% of total insurance and takaful assets (Jul 2012) cf RM16.9 bil 8.6% (Dec 2011).
2) Net contributions RM2.6 bil (Jan-Jul 2012) cf RM2.2 bil (Jan-Jul 2011).
3) New family takaful contributions: RM2 bil (Jan-Jul 2012) cf RM1.6 bil (Jan-Jul 2011).
4) Market penetration rate for family takaful: 13% (Jul 2012) cf 12.8% (Dec 2011).
5) Gross direct contributions for general takaful grew 14.2% to RM1 bil (Jan-Jul 2012) cf 18.1% RM0.9 bil (Jan-Jul 2011).
6) Updated Guidelines on Valuation Basis for Liabilities of Family and General Takaful Business were issued on 15/5/2012.
[Budget 2013] Insurance sector
1) CAR: 216.7% (Jul 2012) cf 222.5% (Dec 2011).
2) Market penetration rate for life insurance: 54.4% (Jul 2012) cf 54.7% (Dec 2011).
3) ILP NB premiums grew 24.8% to RM1.7 bil (Jan-Jul 2012) cf 24.3% RM1.4 bil (Jan-Jul 2011).
4) GI gross direct premiums grew 9.1% to RM9.1 bil (Jan-Jul 2012) cf 7.1% RM8.4 bil (Jan-Jul 2011).
5) Lower overall loss ratio was recorded: 59.2% (Jul 2012) cf 60.8% (Jul 2011).
6) No. of direct insurance companies reduced from 37 (Life 9, General 22, Composite 6 - Dec 2011) to 36 (Life 9, General 21, Composite 6 - Jul 2012).
Insurance NewsYesterday 11:04Edit
Can anyone tell me why there is a big jump in the insurance penetration rate from 43+% to 54+%? Did BNM change the calculation basis and if so what was changed?
[Budget 2013] The only item on LIAM's wish list that received positive news yesterday in the Budget announcement was the removal of the 8% tax on investment income on deferred annuity. With the removal of the 8% tax, deferred annuity fund will now enjoy the same tax status as PRS and will be able to compete on level playing field for retirement savings.  http://bit.ly/TAS0929a http://bit.ly/TAS0929b

The Life Insurance Association of Malaysia (LIAM) said the government's removal of the eight per cent investment 
income tax on deferred annuity will allow policyholders to enjoy better returns on their retirement savings. 

Insurance News

28 Sep 2012  -  Public
[Budget 2013]
Government will allocate RM40 mil to provide insurance cover for 2 years for 2 mil students taking licensed school buses to and from school. The insurance will cover accidental death and TPD.

Group insurance scheme will be set up for the army and police force with maximum cover of RM15,000. The scheme will cover 242,000 members and costs RM12 mil to the government.

1.5 months bonus for public servants, 0.5 month has already been paid before Hari Raya, another 0.5 month will be paid in December, and the balance 0.5 month in January 2013.

1% reduction in personal income tax rate for chargeable income between RM2,500 to RM50,000.

Insurance News

28 Sep 2012  -  Public
Insurance industry can expect the "best practice" as described in the prudential framework on corporate governance to be elevated to principles or minimum expectations to be met. Areas that were covered by BNM in its recent review included independence and board size and composition. http://bit.ly/TAS0928d
BNM completes review of corporate governance framework »
Bank Negara Malaysia (BNM) has completed a review of the existing corporate governance framework for banking and insurance industries and expects to consult with the industry later this year, said as...

Insurance News

28 Sep 2012  -  Public
[Budget 2013] A group insurance scheme will be made available for registered hawkers and small businesses with coverage of up to RM5,000. The cost to the government for the scheme is RM16 mil a year. http://bit.ly/TAS0928b
[Budget 2013] Finance and insurance and transport are expected to expand slower at 4.2% and 5.2%. http://bit.ly/TAS0928a
Economic Report 2012/2013: Slower growth in 2012 »
The government expects the Malaysian economy to grow at a slower pace of between 4.5% and 5% in 2012 compared with 5.1% for 2011, weighed by downside risks from the external sector.

Insurance News

28 Sep 2012  -  Public
Having fewer PRS providers may not be a bad thing as it can result in administrative efficiency, according to EY. Increasing the awareness of PRS is important as we cannot simply assume that people will take up PRS voluntarily.http://bit.ly/TAS0928c
E&Y says awareness on private pension schemes is important »
KUALA LUMPUR: Having fewer providers to manage a pension plan like the recently launched Private Retirement Scheme (PRS), will result in better administrative efficiency, according to Ernst & Youn...

Insurance News

27 Sep 2012  -  Public
Oriental Capital Assurance has been rebranded as Tune Insurance. It plans to undertake M&A in Indonesia and Thailand to boost its capacity. The company has targeted RM330 mil gross premiums next year, up from RM260 mil in 2012.http://bit.ly/TAS0927b

Tune Insurance Malaysia Bhd will be the first entity under the Tune Group to go public. 

Insurance News

27 Sep 2012  -  Public
A few Malaysian takaful operators are interested in capturing the Indonesian market due to the high-growth potential. Takaful operators that have recently expressed their interest include GETSB and Etiqa. http://bit.ly/TAS0927a

Malaysian Islamic insurers are expanding into neighboring Indonesia to tap growth three times as fast as in their home market, where Standard & Poor’s predicts tighter rules will curb expansion.

Insurance News

26 Sep 2012  -  Public
S&P is more positive on the developments of takaful in Malaysia than in other countries. In particular it cited the more sophisticated regulatory oversight and the stronger investment profile of the industry as 2 factors. The main concern for takaful industry worldwide is the lack of global standards in accounting and Shariah compliance.  http://bit.ly/TAS0926c
Malaysia's takaful market healthy, sustainable, says S&P »
Malaysia's takaful industry appears to be more healthy and sustainable compared to its peers in other countries as its development is underpinned by strong fundamentals, says Standard & Poor&#...

Insurance News

26 Sep 2012  -  Public
AmG has completed the acquisition of Kurnia Insurans. KSK Group Bhd (formerly known as Kurnia Asia Bhd) will concentrate on its general insurance business in Indonesia and Thailand after pulling out of Malaysia.http://bit.ly/TAS0926b

PETALING JAYA (Sept 26): KSK Group Bhd, formerly known as KURNIA ASIA BHD [], has completed the deal to dispose its wholly-owned subsidiary Kurnia Insurans (Malaysia) Bhd to AmG Insurance Bhd for RM1.63 billion on Wednesday.

Insurance News

26 Sep 2012  -  Public
We may soon know whether CIMB will pull out from CIMB Aviva. It was reported that Prudential, Manulife and Sun Life could be potential buyers of CIMB Aviva.http://bit.ly/TAS0926a

KUALA LUMPUR: CIMB Group could make a decision as early as this Saturday if it will part with its 51 per cent stake in CIMB Aviva Assurance Bhd, people familiar with the matter said.

Insurance News

25 Sep 2012  -  Public
LIAM's Budget wishlist: 1) Separate the RM6,000 tax relief for life insurance premium from EPF contribution. 2) Increase the medical insurance premium tax relief from RM3,000 to RM6,000. 3) Abolish the 8% tax on investment income for both life fund and annuity fund. 4) The tax relief of RM3,000 on annuity premium is currently only available for year 2012 to 2021. To extend beyond 2021.  http://bit.ly/TAS0925a

The Life Insurance Association of Malaysia (LIAM) has proposed the government give a separate tax relief of RM6,000 on insurance premiums alone in Budget 2013. 

Insurance News

24 Sep 2012  -  Public
And here is the English version of the article on commission liberalisation in Malaysia. http://bit.ly/TAS0924a

BANK Negara Malaysia is considering more flexibility for the insurance industry and insurance companies in order to formulate a commission structure which is suitable with their respective business philosophies.



Posted by Loo Hai Sunday, September 30, 2012 4:47:00 PM Categories: AmG Aviva BNM Budget Etiqa GETSB LIAM Merger PRS Tune
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