26 February 2019

On 11 January 2018, Bank Negara Malaysia (“BNM”) issued a policy document on investment-linked business (“Policy”). The stated principle objective of this policy document is to ensure that licensed persons provide fair treatment to consumers in preserving the value of the consumers’ investment-linked policies/takaful certificates. The Policy stipulates requirements on licensed persons which seek to achieve the following:

  • Promote and maintain high corporate governance and professionalism in the administration of investment-linked business;
  • Ensure professional and proper conduct in the sales and marketing of investment-linked policies/takaful certificates; and
  • Enhance product transparency and disclosure to protect the interests of policy owners/takaful participants.

BNM has considered the feedback obtained during the consultation period of the Life Insurance and Family Takaful Framework (“LIFE Framework”), and has followed up with additional industry consultation to understand renewed concerns by the industry.

The Policy provides for key changes in the following areas:

  • Implementation of Minimum Allocation Rates (MAR) as per the LIFE Framework to protect the account value of policy owners/takaful participants;
  • Introduction of standards for sustainability tests to ensure proper management of long term persistency of investment-linked policies/takaful certificates; and
  • Enhancements to product illustration format.

Reference materials

The Policy is available on the BNM website www.bnm.gov.my or by clicking here.


Download PDF