BNM invites applications for digital insurer, takaful operator licences

 

Bank Negara Malaysia issued a policy document on licensing and regulatory framework for digital insurers and takaful operators today.

KUALA LUMPUR: Bank Negara Malaysia (BNM) has invited applications for digital insurer and takaful operator (Dito) licences to be submitted between Jan 2, 2025 and Dec 31, 2026.

In a statement today, the central bank said licences would be issued to successful Dito applicants who could demonstrate their capacity and capability to advance the digitalisation of the financial sector, while preserving a strong focus on risk management and consumer protection.

All applicants must consult BNM before submitting their applications. They may do so from Oct 1, 2024, via DITF@bnm.gov.my.

The central bank issued a policy document on licensing and regulatory framework for Ditos today, which sets out requirements to facilitate the entry of Ditos.

BNM said applicants were expected to meet the assessment criteria such as the character and integrity of applicants, the nature and sufficiency of financial resources, as well as soundness and feasibility of business and technology plans.

They also need to meet requirements for business conduct and consumer protection, shariah (where relevant), anti-money laundering and anti-terrorism financing measures.

“All applicants must ensure that the application procedures described in this policy document are duly observed, together with other relevant policy documents such as the application procedures for new licences under the Financial Services Act 2013 and Islamic Financial Services Act 2013, and the application procedures for the acquisition of interest in shares, and to be a financial holding company,” it said.

BNM said Ditos would observe a foundational phase over a period of between three and seven years to demonstrate their viability and operational soundness.

Ditos will also be accorded a lower minimum paid-up capital during the foundational phase, proportionate to their business operations in the initial stages.

“Ditos are characterised by their digital operations, with innovative business models and products to better meet consumer needs.

“Once operational, Ditos are envisioned to close critical protection gaps in digitally focused segments alongside existing insurance, takaful operators and other players in the insurance and takaful value chain,” it said. - FMT