Bank Negara Malaysia (BNM) has released the Policy Document on Licensing and Regulatory Framework for Digital Insurers and Takaful Operators (DITOs) today.
This initiative aligns with the Financial Sector Blueprint 2022–2026, which aims to enhance the digitalisation of the financial sector.
The new policy outlines requirements for the entry of DITOs that can provide significant value through inclusion, competition, and efficiency.
After considering feedback from stakeholders, BNM has refined the entry requirements with feedback from various stakeholders
DITOs will undergo a foundational phase of three to seven years to prove their viability and operational soundness.
During this period, they will benefit from a lower minimum paid-up capital, that is more proportionate and reflects their early-stage business operations.
Digital Insurers and Takaful Operators are expected to introduce innovative business models and products that address consumer needs more effectively.
These operators aim to close protection gaps in digitally-focused segments, complementing existing insurance and takaful providers.
BNM will issue licenses to applicants who successfully demonstrate strong capacity and capability to meet the intended policy outcomes, with a strong focus on risk management and consumer protection.
It is worth noting that BNM no longer limits the number of licenses to five only as it had announced earlier in November 2022.
Applications will be accepted for a two-year period from 2 January 2025 to 31 December 2026. Prospective applicants must consult with BNM starting from 1 October 2024 via DITF@bnm.gov.my.
The assessment criteria include prudential aspects, business conduct, consumer protection, Shariah compliance (where relevant), anti-money laundering measures and terrorism financing measures, as well as meaningful value propositions for Malaysia.
Applicants must adhere to the application procedures in the policy document and comply with other relevant policies such as the Financial Services Act 2013 and Islamic Financial Services Act 2013.
The policy document is available here.
