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Search results for takaful. Items 1 to 10 of the best 24 displayed.
Dialogue with Insurers and Takaful Operators
Bank Negara Malaysia held a dialogue with insurers and takaful operators on 9 and 10 August 2005. The chairmen, members of the Board and chief executive officers of insurers and takaful operators attended the dialogue. Themed "Moving Towards a More
Last modified : 10 Aug 2005
Measures to Further Strengthen the Institutional Infrastructure of the Takaful Industry
Bank Negara Malaysia announces several measures to further strengthen the institutional infrastructure of the takaful industry and accelerate the expansion of takaful business. This move is in line with the objectives of the Financial Sector Masterplan
Last modified : 26 May 2005
The Takaful Annual Report 2004
The Takaful 2004 Annual Report provides a review on the performance and developments of the Malaysian takaful industry and the administration of the Takaful Act 1984 by Bank Negara Malaysia throughout the year. The takaful industry expanded further in
Last modified : 27 Apr 2005
Appointment of Members of the Shariah Advisory Council for Islamic Banking and Takaful
Bank Negara Malaysia today announces the appointment of ten (10) members of the Shariah Advisory Council for Islamic Banking and Takaful. The two-year term appointment which takes effect from 1st November 2004 was made pursuant to Section 16B, Central
Last modified : 02 Nov 2004
Dialogue Session with Insurers and Takaful Operators
The Governor of Bank Negara Malaysia, together with senior officials of Bank Negara Malaysia, met with the chief executive officers of insurance companies and takaful operators for a dialogue at Bank Negara Malaysia on 29 October 2004. The Dialogue
Last modified : 29 Oct 2004
Memorandum of Understanding between Malaysia and the Islamic Development Bank
The Government of Malaysia and the Islamic Development Bank (IDB) today signed a Memorandum of Understanding (MOU), witnessed by the Prime Minister of Malaysia, Dato' Seri Abdullah Hj. Ahmad Badawi. The Governor of Bank Negara Malaysia, Tan Sri Dr. Zeti
Last modified : 30 Jun 2004
The Takaful Annual Report 2003
Bank Negara Malaysia released the Takaful 2003 Annual Report today. The Takaful 2003 Annual Report The Takaful 2003 Annual Report provides a review of the performance and developments of the Malaysian takaful industry and the administration of the
Last modified : 22 Apr 2004
Liberalisation of the Foreign Exchange Administration Rules
In conjunction with the release of the Annual Report 2003, Bank Negara Malaysia is announcing further liberalisation of the foreign exchange administration rules. This is part of the Bank’s continuous effort to enhance the business environment
Last modified : 01 Apr 2004
Banking and Financial Law School 2004: "The Use and Documentation of OTC Derivatives"
Bank Negara Malaysia, Institut Bank-Bank Malaysia (IBBM), the Malaysian Bar Council and International Swaps and Derivatives Association (ISDA) will be organising the fourth Banking and Financial Law School 2004. This year the topic is "The Use and
Last modified : 11 Feb 2004
Dialogue Session with Insurers and Takaful Operators
The Governor of Bank Negara Malaysia, together with senior officials of the Bank, met with chief executive officers of insurance companies and takaful operators for a dialogue at the Bank on 30 October 2003. The Dialogue discussed recent economic and
Last modified : 30 Oct 2003
PEN: 08/05/34 (BN)
Embargo: Not for publication or broadcast before 1700 hours on Wednesday, 10 August 2005
Dialogue with Insurers and Takaful Operators
Bank Negara Malaysia held a dialogue with insurers and takaful operators on 9 and 10 August 2005. The chairmen, members of the Board and chief executive officers of insurers and takaful operators attended the dialogue. Themed "Moving Towards a More Competitive Market", the dialogue session provided a platform for insurers, takaful operators and Bank Negara Malaysia to discuss strategic issues concerning the call to greater transparency in the industry's interactions with consumers and challenges of the changing competitive landscape.
The 2005 annual dialogue session was conducted over a period of one and a half days, and focused on the challenges of pricing deregulation, product transparency, operating cost efficiencies and commission disclosures. Practitioners from renown global insurance institutions were present to share their experiences in these areas. Discussions during the dialogue centred on the challenges faced by the industry in preparing for the transition towards a more deregulated market, readiness of the market for commission disclosure and industry initiatives to enhance product transparency. On these issues, the dialogue supported: the need to draw up a clear road map for moving towards a detariffed market; the need to build up an adequate supply of actuarial resources to meet the increasing demand that will arise for such expertise; the need for adequate safeguards to curb unhealthy practices and maintain financial discipline in transitioning to commission disclosures and the liberalisation of management expense controls; and new initiatives outlined to enhance consumer awareness. The broad proposals outlined to take these issues forward will provide added impetus for further progress by the industry towards building more competitive insurance and takaful systems. Bank Negara Malaysia will continue to provide the enabling regulatory environment to support an orderly evolution and to secure long-term market stability.
At the dialogue, Bank Negara Malaysia announced that it would in the near term issue licences for financial advisers with the recent passage of the Insurance (Amendment) Bill on Financial Advisers. The introduction of financial advisers is aimed at further diversifying the distribution system for life insurance. Financial advisers will be positioned to offer professional financial planning services, and a broader range of insurance products from multiple insurers to suit increasingly diverse consumer needs. Financial advisers must be a corporate entity with a minimum paid-up capital of RM100,000 and have in place management that fulfil prescribed 'fit and proper' criteria in order to qualify for a licence.
Bank Negara Malaysia also informed the industry of the imminent issuance of revised Guidelines on Medical and Health Insurance Business which aims to promote the more equitable and consistent treatment of consumers in the provision of core benefits under medical insurance policies. This will be achieved primarily through more clearly defined rules governing minimum policy terms and conditions and improved disclosures to consumers at the point of sale. The Guidelines will take effect in early 2006.
Bank Negara Malaysia
10 August 2005
PEN: 05/05/58 (BN)
Embargo: Not for publication or broadcast before 1200 hours on Thursday, 26 May 2005
Measures to Further Strengthen the Institutional Infrastructure of the Takaful Industry
Bank Negara Malaysia announces several measures to further strengthen the institutional infrastructure of the takaful industry and accelerate the expansion of takaful business. This move is in line with the objectives of the Financial Sector Masterplan to create an efficient, progressive and comprehensive Islamic financial system and reinforce takaful as one of the key components of the Malaysian financial system. In this regard, Bank Negara Malaysia hereby announces the following initiatives:
i. Licensing of new takaful operators; and
ii. Licensing of takaful brokers and adjusters.
Licensing of new takaful operators
Bank Negara Malaysia will issue up to four new takaful licenses to qualified applicants. The following criteria will be adopted in assessing the merits of applicants:
- The applicant must be financially sound financial institutions, preferably with experience in Islamic banking, takaful or insurance business;
- Preference will be accorded to a joint-venture or consortium of financial institutions (including insurance and banking groups, as well as development financial institutions). For the consortium, there should be participation from an anchor bank or insurer with a significant equity holding to steer the consortium. In addition, the joint-venture or consortium should be participated by at least one banking group; and
- The applicant must be able to demonstrate, through its business plans, that the proposed takaful operator could contribute effectively to the development of the takaful industry and hence complement the efforts taken by the Government and the Bank in establishing Malaysia as an Islamic financial centre. The business plan should demonstrate clear business strategy of the applicant with regard to:
- The expected growth of the proposed takaful operator through the projected financial condition and pro forma financial statements for the company in the first three years.
- An overview of each line of business to be conducted by the takaful operator and the products and services to be offered, including the marketing strategy to be adopted, both in short-term and long-term periods; and
- The competency and experience of the potential management team of the proposed takaful operator.
In the submission of application to Bank Negara Malaysia, the applicant must include the proposed ownership structure of the proposed takaful operator, including its direct and indirect control and major shareholders, their financial strength, the review of the past banking and insurance business ventures as well as the source of initial capital to be invested.
The takaful licences will be issued as composite licences and the new takaful operator must comply with the minimum paid-up capital requirement of RM100 million, which should not be funded through borrowings. In addition, the foreign equity interest in the new takaful operator is permitted up to 49%.
Submission of applications to Bank Negara Malaysia should be made by 31 October 2005.
Licensing of takaful brokers and adjusters
In an effort to further strengthen the regulation and supervision of takaful intermediaries and enhance consumer protection, Bank Negara Malaysia will issue licences under the Takaful Act 1984 to qualified applicants to conduct takaful broking and adjusting business. This move is also aimed at increasing the level of professionalism and competence of the takaful intermediaries.
(a) Takaful broking licence
For the takaful broking business, application is opened to qualified insurance brokers currently licensed under the Insurance Act 1996. The insurance broker must transact at least RM1 million takaful contributions in the previous calendar year or have combined takaful and insurance contributions of at least RM30 million, of which takaful contributions accounts for more than RM0.5 million of the combined amount. In addition, the insurance broker must have a minimum paid-up share capital unimpaired by losses of RM0.6 million and professional indemnity cover of at least RM1 million net of deductible.
Apart from the above, up to five new takaful broking licences will be issued to new players in an effort to promote specialisation in takaful broking business. Among the licensing conditions imposed on the new players include requirement on minimum paid-up share capital unimpaired by losses of RM0.5 million and professional indemnity cover of at least RM0.5 million net of deductible.
The application for takaful broker licence must be made using the application forms available at Bank Negara Malaysia's website. The application forms must reach Bank Negara Malaysia by 1 July 2005.
(b) Takaful adjusting licence
For the takaful adjusting business, application is opened to insurance adjusters currently licensed under the Insurance Act 1996 having a minimum paid-up share capital unimpaired by losses of RM0.15 million. Interested applicants are required to submit to Bank Negara Malaysia by 1 July 2005 a letter of intent to conduct takaful adjusting business.
Both takaful broking and adjusting licences are yearly renewable based on the performance of the applicants.
Enquiries on the licensing conditions and submission of applications should be directed to:
Director
Islamic Banking & Takaful Department
Bank Negara Malaysia
Jalan Dato' Onn
P.O. Box 10922
50929 Kuala Lumpur
Telephone:
03-2698 8044 ext. 7641/8539
Fax:
03-2693 3826
E-mail:
salamran @ bnm.gov.my
nas @ bnm.gov.my
Application Forms
BNM/JPIT/BA1 - Information on Applicant Company
BNM/JPIT/BA2 - Information on Shareholders/Directors/Key Officers
PEN: 04/05/59 (BN)
Embargo: Not for publication or broadcast before 1800 hours on Wednesday, 27 April 2005
The Takaful Annual Report 2004
The Takaful 2004 Annual Report provides a review on the performance and developments of the Malaysian takaful industry and the administration of the Takaful Act 1984 by Bank Negara Malaysia throughout the year.
The takaful industry expanded further in year 2004 in tandem with the expansion in domestic economic activities. The combined contributions of family and general takaful business increased by 10.8% to RM1.1 billion with the market share of the takaful industry accounting for 5.1% (2003: 5.4%) of the insurance sector contributions (aggregate of takaful and insurance industry). Total assets of the takaful funds strengthened by 13.5% to reach RM5 billion, accounting for 5.6% (2003: 5.6%) share of the insurance sector. In 2004, several positive developments in the industry continued to set the course for future growth of the takaful sector in Malaysia. These include the implementation of mandatory takaful cover for Islamic financing where the cost of coverage is part of the financing package. In addition, all takaful operators have completed the capital raising exercise to a minimum of RM100 million which is expected to improve their underwriting capacity and precipitate more product launches.
Family Takaful
The family takaful business continued to dominate the takaful industry with 70.7% share of total contributions. New business contributions recorded growth of 18.1% to RM603.7 million mainly generated from mortgage takaful plans, driven by the expansion in disbursements of mortgage financing by the Islamic financial institutions. Since its introduction in 2003, the investment-linked takaful plans has recorded significant growth of 197.5%, showing tremendous potential for the plan to expand further to fulfil the consumer needs for Shariah compliant investment avenues.
Table 1: Distribution of New Business by Plan
Contributions / RM million / % change / % share2003 / 2004 / 2004 / 2003 / 2004
Ordinary Family / 502.9 / 592.4 / 17.8 / 98.4 / 98.1
Individual
/ 452.8 / 485.0 / 7.1 / 88.6 / 80.3
Group
/ 50.1 / 107.4 / 114.5 / 9.8 / 17.8
Annuity1 / 4.9 / 1.9 / -62.0 / 1.0 / 0.3
Investment-linked / 3.2 / 9.4 / 197.5 / 0.6 / 1.6
Total / 511.0 / 603.7 / 18.1 / 100.0 / 100.0
1 Excluding SATK
Sums participated for new business grew significantly by 98.9% to RM36.5 billion while takaful certificates issued increased by 9.6% to 290,538 certificates. Market penetration of the family takaful business, as measured by the number of certificates in force to total population, increased from 4.5% to 5.1%.
Growth of total income of the family takaful business in 2004 increased marginally by 6.1% to RM1 billion, impacted by the slowdown in growth of net investment income from deposit placements and lower yield from Islamic bonds. On the other hand, total outgo of the family fund increased by 64.5% to RM591.2 million largely due to the high provision for non-performing financing and diminution in value of securities. As a result, the excess of income over outgo stood at RM437.3 million, an increase of 42.5% from the year 2003.
General Takaful
The general takaful business expanded further in 2004 with the total gross contributions increased by 22.2% to RM492.5 million. Fire and motor sectors continued to dominate the portfolio of general takaful business with 37.8% and 30.4% share of total gross contributions. The marine, aviation and transit sector further expanded in 2004 with a significant growth of 115.3% in gross contributions. The overall retention ratio declined marginally to 80.7% as compared with 81.1% in 2003 arising from the limited capacity of the takaful operators to retain marine, aviation and transit business.
Table 2: Distribution of Gross Contributions by Sectors
2003 / 2004 / 2004 / 2003 / 2004
Marine, Aviation & Transit / 35.0 / 75.4 / 115.3 / 8.6 / 15.3
Fire / 167.2 / 186.2 / 11.4 / 41.5 / 37.8
Motor / 120.4 / 149.8 / 24.4 / 29.9 / 30.4
Miscellaneous / 80.4 / 81.1 / 0.8 / 20.0 / 16.5
All Sectors / 403.0 / 492.5 / 21.1 / 100.0 / 100.0
Total gross claims paid increased by 11.5% amounting to RM116 million. 21.7% or RM25.2 million of the total gross claims paid were borne by retakaful and reinsurance companies under the retakaful arrangement. The claims experience of the takaful industry increased to 41.2% mainly due to the increase in provision for outstanding claims for the fire sector and higher net claims paid for the motor sector. The general takaful fund experienced lower underwriting profit of RM68.7 million following higher underwriting expenses recorded during the year.
Developments and Measures to Strengthen the Industry
During 2004, Bank Negara Malaysia continued the efforts to strengthen further the overall infrastructure supporting the development of a resilient and robust takaful industry. Focus was centred on enhancing the institutional infrastructure, regulatory and prudential framework, Shariah and legal infrastructure, as well as consumer protection and awareness. Several guidelines were issued by Bank Negara Malaysia to strengthen the effectiveness of the board of directors and senior management in the overall management of a takaful operator, improve the transparency of financial reporting and enhance product disclosure and transparency in the marketing of takaful products. In line with the need to ensure the systemic stability and sustainability of the takaful industry, the scope of takaful schemes were also expanded by requiring the shareholders of takaful operators to make an outright transfer of assets into the takaful risk funds so as to rectify any deficit in the funds. These measures were complemented with the continous efforts to strengthen the consumer protection infrastructure and enhance financial literacy to increase public confidence in the takaful industry. The efforts included the launching of the Financial Mediation Bureau to lend support for efficient dispute resolution process involving the financial products and services provided by the financial institutions under the supervision of Bank Negara Malaysia. The Bank and the takaful industry also organised the inaugural Malaysia International Halal Showcase and the annual Islamic Banking and Takaful Expo.
The Shariah and legal framework was further strengthened with the issuance of Guidelines on the Governance of Shariah Committee for the Islamic Financial Institutions. The Guidelines were issued to streamline the functions and duties of the Shariah Committee of takaful operators as well as to enlarge and reinforce the role of the Shariah Advisory Council on Islamic Banking and Takaful (SAC) to ensure better Shariah governance in the takaful industry. This followed the amendments made in 2003 to the Central Bank of Malaysia Act 1958 and the Takaful Act 1984 which enhanced the role and functions of the SAC as the sole authority on Shariah matters pertaining to Islamic banking and takaful. Further amendments were also made to the Income Tax Act 1967, Real Property Gains Tax Act 1976 and Stamp Act 1949 to exempt additional instruments and transactions executed to meet the Shariah requirements from stamp duty and tax payment.