BANK Negara Malaysia (BNM) is giving foreign insurers until the end of next year to reduce stakes in their local ventures, Bloomberg News, quoting sources, reports.

Those who fail to comply with the requirement by the deadline can have the option to pay to the B40 Health Protection Fund.

The option of paying to the B40 fund was to provide coverage to lower-income households needing treatment for critical illnesses.

Companies that contribute to the fund will be deemed to have complied with the ownership limit, Bloomberg quoted its sources as saying.
BNM, in response to a query from the portal, stated foreign shareholders accepted the divestment condition when they entered the Malaysian market.

The deadline for compliance was to have been in 2018 but it was shelved following a change in government in the general election that year.

AIA Group Ltd, Prudential plc, Tokio Marine Holdings Inc, and Zurich Insurance Group AG are among the international insurers with ventures in Malaysia.

Singapore’s Great Eastern Holdings Ltd is the only foreign insurer to have publicly announced a contribution to date, pledging RM2 billion to the B40 fund in 2019, according to a stock exchange filing.

The deadline would see BNM enforcing the limit it introduced in 2009 with the liberalisation of foreign ownership.

The ruling mandated that oversees insurance companies were allowed to hold a maximum 70% in local firms, but it was mostly disregarded until 2017 when the regulator issued a directive reminding insurers they have to meet the requirement. – July 19, 2022.