KUALA LUMPUR (Sept 18): Bank Negara Malaysia (BNM) on Wednesday reaffirmed its ongoing efforts to modernise the regulatory framework and foster innovation within the insurance industry.
BNM governor Datuk Seri Abdul Rasheed Ghaffour said the central bank is actively laying the foundation for a competitive, efficient and inclusive protection landscape.
“This involves driving meaningful initiatives to modernise the existing regulatory framework, making it more principle-based, while opening avenues for insurers and technical operators to innovate and test new solutions,” Abdul Rasheed said in his keynote address during the rebranding launch of the Malaysian Insurance Institute (MII) to the Asian Institute of Insurance (Aii) on Wednesday.
BNM had recently implemented several key initiatives for the insurance industry, including the refreshed regulatory sandbox, and had introduced the licensing and regulatory framework for digital insurers and takaful operators, according to the central bank governor.
Abdul Rasheed stressed that BNM strives to make critical protection solutions more accessible and targeted.
“As one of the countries with the highest cost of private medical care in Southeast Asia, an important priority for us at the bank is to improve access to affordable insurance and takaful coverage, through the revised policy document on medical and health insurance, and takaful, and [the] Perlindungan Tenang microinsurance and microtakaful,” he said.
The central bank had in February this year issued its policy document, which sets out revised requirements and guidance to licensed insurers and licensed takaful operators carrying the medical and health insurance/takaful (MHIT) business. The revised policy requirements came into force in June.
Additionally, Abdul Rasheed noted that the Malaysian insurance and takaful sector is at a pivotal point, amid rising complexity in risk models which adds to underwriting challenges, as well as technological advancements, shifting customer expectations, and an ageing population.
“No doubt, the industry’s experience in recent years in driving reforms in the areas of medical protection and motor cover, have indeed been encouraging.
“Yet, although we have charted great progress towards ensuring sustainability of coverage and fostering innovation, there is still a lot of work to be done for us,” he added.
In the first half of 2024 (1H2024), the new business premiums in the life insurance and general insurance industry recorded a double-digit growth to more than RM20 billion, according to the governor.
Meanwhile, the family takaful and general takaful industry also showed strong growth to record total contributions of over RM7 billion.