Thursday, October 19, 2017

Malaysia reminds foreign insurers of 70% ownership cap

The central bank of Malaysia has urged foreign shareholders of local insurers to honour their promise of maintaining a 30% domestic shareholding.

Bank Negara Malaysia explained that the requirement is part of the commitments made by foreign shareholders when they originally applied for entry into the domestic market.

In a statement, the insurance regulator said it expects foreign investors to follow these vows and make sure that these are met.

Three weeks ago, the central bank sent letters to wholly owned insurers, asking their foreign parents to trim down their stakes as part of the regulation for domestically incorporated insurers.

In 2009, Malaysia adopted a foreign policy cap of 70%. However, waivers from this requirement are available in special circumstances, such as in the case of an acquisition that is deemed to help consolidate or rationalise the industry.

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