KUALA LUMPUR, Nov 25 2022 — Bank Negara Malaysia (BNM) today issued the exposure draft on Licensing and Regulatory Framework for Digital Insurers and Takaful Operators (DITOs) for written feedback following the issuance of the discussion paper earlier this year.
In a statement today, BNM said the exposure draft outlined the proposed framework to facilitate the entry of DITOs in Malaysia that can offer strong value propositions to realise inclusion, competition and efficiency.
According to the central bank, DITOs are envisaged to carry on insurance or takaful business wholly (or almost wholly) through digital or electronic means.
“This in turn is expected to drive new types of business and operating models to meet diverse consumer needs through wider product choices and more efficient service quality. In advancing these innovations, BNM continues to preserve a strong focus on sound risk management and consumer protection,” BNM said.
BNM said, 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. DITOs will have to comply with the existing requirements under the Financial Services Act 2013 (FSA) or Islamic Financial Services Act 2013 (IFSA).
This includes standards on prudential aspects, business conduct and anti-money laundering and terrorism financing measures,” the central bank said.
BNM aims to finalise the policy document and invite the applications for licence in 2023 and up to five licences may be issued to applicants that meet all requirements.
Feedback on the exposure draft can include clarification or elaboration and alternative proposals.
“BNM welcomes written feedback, backed by clear rationales, to be submitted by 28 April 2023 to DITF@bnm.gov.my ,” the central bank added.
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