New BNM proposals to boost insurance sector growth

Bank Negara Malaysia’s (BNM) recently announced concept paper on life insurance and family takaful (LI and FT) may be the insurance sector’s re-rating catalyst. The proposals made in the paper focus on ensuring sustainable operating costs, enhancing disclosure and improving policyholders’ value proposition, which should collectively boost penetration, especially in the mass market. Key measures in the recent proposals include the introduction of the minimum allocation rate to replace commission/operating cost limits on investment-linked products, promoting distribution channels and encouraging greater product transparency with enhanced disclosure requirements and web aggregators. The outcome is considered a win-win for customers and insurers.