Bank Negara Malaysia (BNM) has issued investment-related insurance business policy documents that apply to conventional insurance companies and family takaful operators engaged in this line of insurance.
The main objective of this new policy document is to ensure that people who have a license provide fair treatment to policy owners/takaful participants in maintaining the value of the policy certificate related to the investment/takaful certificate of the policy owner/takaful participant. Therefore, this policy document sets out requirements for licensed persons aiming to achieve the following:
(a) promote and maintain high corporate governance and professionalism in investment-related businesses;
(b) ensure professional and proper conduct in the sale and marketing of investment-related products; And
(c) increase product transparency and disclosure to protect the interests of policy owners/takaful participants.
To achieve the above objectives, this policy document stipulates the following requirements:
(a) approval to carry on investment-related business;
(b) investment-related fund management;
(c) product design;
(d) costs, expenses and expenses;
(f) investment; And
(g) valuation of assets and liabilities of investment-related funds.
The policy document was released on February 13, 2023 and goes into effect on the same date. This is an update to the 2019 Investment-Related Business Policy Document, and other relevant specifications.
This latest policy document sets out important changes in the following areas:
(a) application of the Minimum Allocation Rate (MAR) in accordance with the Life Insurance and Family Takaful Framework to protect the value of the accounts of policyholders/takaful participants;
(b) introduction of standards for sustainability testing to ensure proper management of the long-term persistence of investment-related policy certificates/takaful certificates; And
(c) improvement of product illustration format.
BNM said that owners of investment-related insurance policies/takaful participants bear both the gains and losses from the investment risk, and the long-term persistence of their investment-related products can be affected by the investment risks and the flexibility afforded to those investment-related products. product. It is therefore critical that licensed persons maintain high standards of governance in the management of their investment-related business and to uphold high standards of conduct and transparency in the sales, marketing, and disclosure of information relating to investment-related products, at all times. , to assist decision-making information by takaful policy owners/participants.