Bank Negara Malaysia (BNM) issued the exposure draft on Licensing and Regulatory Framework for Digital Insurers and Takaful Operators (DITOs) for written feedback following the issuance of the discussion paper earlier this year.
In a statement, the central bank said the exposure draft outlined the proposed framework to facilitate the entry of DITOs in Malaysia that can offer strong value propositions to realise inclusion, competition and efficiency.
“The exposure draft specifies licensing and application procedures, as well as specific requirements on the eligible business models and distribution channels of DITOs.
“This is intended to promote sustainable business operations, while delivering value to policyholders. DITOs will have to comply with the existing requirements under the Financial Services Act 2013 or Islamic Financial Services Act 2013,” it said.
BNM said DITOs are envisaged to carry on insurance or takaful business wholly (or almost wholly) through digital or electronic means.
This in turn is expected to drive new types of business and operating models to meet diverse consumer needs through wider product choices and more efficient service quality.
In advancing these innovations, the central bank continues to preserve a strong focus on sound risk management and consumer protection.
BNM said it aimed to finalise the policy document and invite the applications for licence in 2023, and up to five licences may be issued to applicants that meet all requirements.
Feedback on the exposure draft can include clarification or elaboration and alternative proposals.
“BNM welcomes written feedback, backed by clear rationales, to be submitted by April 28, 2023 to DITF@bnm.gov.my,” it said.