A discussion paper on the Licensing Framework for Digital Insurers and Takaful Operators was issued by Bank Negara Malaysia on 4 January 2022 seeking for public feedback by 28 February 2022.
The discussion paper:
• states that Bank Negara Malaysia is developing the Digital Insurance and Takaful Framework (“Framework”) to facilitate the licensing of a new set of digital insurers and takaful operators (“DITOs”) under the Financial Services Act 2013 and Islamic Financial Services Act 2013, respectively;
• provides that existing licensed insurer and takaful operator wishing to carry out digital insurance and takaful business separately from their existing business, may apply to carry on digital insurance or takaful business through a separate entity (that is, its subsidiary) or through a joint venture agreement. However, the existing licensed insurer and takaful operators are not required to obtain a separate licence in digitalising their current business operations;
• sets out the proposed entry requirements and key assessment criteria for the licensing of DITOs, potential temporary or foundational regulatory flexibilities, the overall regulatory framework, as well as market infrastructure to support the development of digital insurance and takaful in Malaysia;
Bank Negara Malaysia has indicated that separate policy document(s) will be issued to address the prudential and business conduct requirements relating to DITOs later in 2022.
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