BNM publishes update on insurance regulatory framework

Several aspects were refined following consultations

BNM publishes update on insurance regulatory framework

Insurance News

By Kenneth Araullo

Bank Negara Malaysia (BNM), the country’s central bank, has provided an update regarding the outcomes of the consultation paper on the exposure draft concerning the Licensing and Regulatory Framework for Digital Insurers and Takaful Operators (DITO framework) that was issued in November 2022.

The exposure draft delineates the proposed framework to streamline the entry of DITOs into Malaysia, enabling them to offer value propositions to achieve the policy objectives of inclusion, competition, and efficiency.

During the consultation period, which concluded in April earlier this year, feedback was garnered from over 50 stakeholders. In the subsequent months, BNM actively engaged with various stakeholders to consider the feedback received on the exposure draft, especially pertaining to alternative business and operational models, as well as the approach to the foundational phase.

In a news release, BNM said that the input and feedback obtained provided additional insights, including market trends, shaping the final version of the policy document.

Revisions following consultations

After consideration of the feedback and the insights gained, BNM announced that it has taken the opportunity to refine several aspects of the DITO framework. This includes augmentations aimed at providing clarity for emerging and innovative business models like embedded insurance and insurance-as-a-service.

The objective, BNM said, is to promote broader involvement from entities within the insurance and takaful value chain that can contribute to the intended policy objectives of the DITO framework. BNM is on track to finalise the framework by the first half of 2024.

Elsewhere in the country, the RHB Bank of Malaysia is reportedly soliciting proposals from financial advisors regarding its insurance sales partnership as its existing arrangement with Tokio Marine is set to conclude at the close of the upcoming year.

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