Bank Negara Malaysia Releases New Policy Document on Bancassurance and Bancatakaful – Commentary

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On June 30, 2022, Bank Negara Malaysia issued a Policy Paper on Bancassurance and Bancatakaful.

The policy document will be effective January 1, 2023 (except for Sections 9.12 through 9.14, which will be effective immediately on the date of publication of this policy document). The policy document replaces:

  • the Bancassurance Guidelines and the Bancatakaful Guidelines, both issued on June 17, 2010; and
  • the circular on the marketing of bancassurance and bancatakaful products, published on December 24, 2008.

The policy document applies to financial service providers who are:

  • licensed insurers, licensed banks and licensed investment banks under the Financial Services Act 2013;
  • licensed takaful operators and licensed Islamic banks under the Islamic Financial Services Act 2013; and
  • institutions prescribed under the Development Finance Institutions Act 2002.

The policy document sets out the requirements and guidelines for bancassurance and bancatakaful arrangements. The policy document serves to:

  • ensure that bancassurance and bancatakaful remain a viable and widely accessible channel for consumers to purchase insurance and takaful products;
  • promote sound market conduct practices that safeguard consumer interests through needs-based selling, disclosure and increased transparency; and
  • promote market competitiveness and preserve consumer choice.

The policy document requirements are now extended to bancassurance and bancatakaful partners, where applicable.

The policy requirements will apply to existing and new bancassurance and bancatakaful agreements, including renewals of such agreements, unless otherwise specified.

For more information on this subject, please contact Pamela Kung at Shearn Delamore & Co by phone (+60 3 2027 2911) or email ([email protected]). The Shearn Delamore & Co website can be accessed at www.shearndelamore.com.

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