BNM Issues Draft Framework For Digital Insurers, Takaful Operators
Author Avatar
(Image: Bloomberg)

Bank Negara Malaysia (BNM) has said that it is looking to award up to five licences to eligible digital insurers and takaful operators (DITOs) soon. This is following the issuance of the exposure draft on the Licensing and Regulatory Framework for DITOs last week to invite written feedback.

In a statement, BNM said that the exposure draft outlines a proposed framework that can be used to ease the entry of DITOs into Malaysia. Additionally, it ensures that the selected entities can offer strong value propositions, thereby heightening inclusion, competition, and efficiency in the industry.

“The exposure draft specifies licensing and application procedures, as well as specific requirements on the eligible business models and distribution channels of DITOs. This is intended to promote sustainable business operations, while delivering value to policyholders,” said the central bank, adding that DITOs will also have to comply with the existing requirements under the Financial Services Act 2013 or Islamic Financial Services Act 2013.

BNM further said that DITOs are expected to carry their insurance or takaful business wholly – or almost wholly – through digital and electronic means. In turn, this is expected to drive new types of business and operating models, as well as offer wider product choices and more efficient service quality to meet consumer needs.

bnm
(Image: The Sun Daily)

Moreover, the central bank explained that just like Malaysia’s first five digital banks, the DITOs that are eventually selected will need to go through a foundational phase of three to five years. During this period, they will be allowed to operate with lower minimum paid-up capital requirements and some regulatory flexibilities that are commensurate with their early stage of operations. In turn, they are expected to prove their capabilities in serving the Malaysian public and achieving BNM’s goals set for them. Those who are unable to do so by the end of the foundational phase will need to implement an exit plan, as per indicated in the exposure draft.

In terms of timeline, BNM is accepting written feedback for the current exposure draft until 28 April 2023. Following that, it aims to finalise the policy document and invite applications for the five licences in 2023. Meanwhile, the central bank had already issued the discussion paper on the Licensing and Regulatory Framework for DITOs earlier this year.

All feedback on the exposure draft on the Licensing and Regulatory Framework for DITOs can be sent to [email protected]. You can also read up on the exposure draft here.

(Source: Bank Negara Malaysia)

0 0 votes
Article Rating

SHARE

Comments (0)

Subscribe
Notify of

0 Comments
Inline Feedbacks
View all comments
Top Insurance Articles
Post Image
Government and Private Hospitals in Malaysia: How Much Do They Really Cost?
ringgitplus
- 2nd January 2018
We keep hearing that government hospitals are cheaper than the private ones, but what’s the price difference really like? Keep reading to find out!
Post Image
How To Claim Income Tax Reliefs For Your Insurance Premiums
Alex Cheong Pui Yin
- 7th April 2022
There are quite a few types of tax reliefs that you can claim to reduce your chargeable income […]
Post Image
The First Cancer Rider Offering Treatment Allowance & Hospice Care In Malaysia By Takaful IKHLAS
Katrina Balan Quiroz
- 1st July 2021
Around the world, Malaysia included, cancer has remained as one of the leading causes of death. Last year, […]
Post Image
Cancer Treatment In Malaysia: How Much Does It Cost?
ringgitplus
- 2nd October 2018
Many know the devastating effects of cancer, but few talk about just how expensive cancer treatment costs can be.

Related articles

Related Posts Image
Related Posts Image
Related Posts Image
Related Posts Image