The Malaysian central bank will issue a new trade credit insurance/takaful framework by the end of this year or early next year, according to a senior finance official.
The current framework only covers trade credit insurance, and the revision will also contain provisions for the takaful (Islamic insurance) version. This was revealed by Bank Negara Malaysia (BNM) director of Islamic banking and takaful, Mohd Zabidi Md Nor, at the Trade Credit Takaful Forum on Tuesday.
The new framework will clarify terms of product recognition and criteria for qualifying credit risk mitigation for takaful operators.
“The guidelines that we have issued do not capture takaful. So it is timely (for us) to refresh this and bring visibility to a higher level,” Mohd Zabidi was quoted by state media outlet
Bernama.
“My team and the industry are working on this … so that the capital framework will be adjusted to reflect that exquisite acceptance of trade credit takaful and insurance, as part of the credit risk mitigation framework.”
He also urged takaful operators to enter this untapped market once the new framework is out due to its excellent growth potential. Currently, only Exim Bank offers trade credit takaful in the country, and the product is only available internally.
The Trade Credit Takaful Forum was organised by
Marsh Insurance Brokers (Malaysia) Sdn Bhd and
Marsh Takaful Brokers (M) Sdn Bhd, in cooperation with BNM.
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