Legal Update February 2023 (2)

• Published date: 08 March 2023
• Subject Matter: Finance and Banking, Corporate/Commercial Law, Financial Services, Corporate and Company Law, Securities
• Law Firm: Shearn Delamore & Co.
• Author: Shearn Delamore & Co

Financial Services

New Insurance Guidelines issued by Bank Negara Malaysia ("BNM")

On 13 February 2023, BNM issued two new policy documents relating to insurance business:

1. universal life business which applies to insurers licensed under the Financial Services Act 2013 to carry on life business.

A "universal life policy" is a contract of insurance on human life or an annuity where the benefits are, wholly or partly, to be determined by reference to a nonunitised account, and the value of which is related to (i) the income from property of any description or (ii) the market value of such property.

The policy document sets out the regulatory requirements relating to, among others, the corporate governance in the management of such business and the disclosure requirements to promote transparency to universal life policy owners.

2. https://www.bnm.gov.my/documents/20124/948107/PD-Investment-Linked-Business-2023.pdf investment-linked business which:

(i) applies to:

• insurers licensed under the Financial Services Act 2013 which offer, market or sell investment-linked policies; and
• takaful operators licensed under the Islamic Financial Services Act 2013 which offer, market or sell investment-linked takaful certificates.

(ii) supersedes the following policies with effect from 13 February 2013:

• Investment-linked Business policy document issued on 11 January 2019; Specifications relating to Product Illustration Rate for Investment-Linked ("IL") Insurance Policy/Takaful Certificate under the Policy Document on Investment-linked Business issued on 7 October 2020; and
• Specification pursuant to Sections 47, 123 and 143 of the Financial Services Act 2013 and Sections 57, 135 and 155 of the Islamic Financial Services Act 2013 in respect of the Investment-linked Business Policy Document issued on 22 March 2021.

(iii) sets out, among others, the requirement to obtain approval before any entity set out in (i) above can carry out investment-linked business and the ongoing obligations which such entity must comply with.

Exposure draft on Fair Treatment of Vulnerable Consumers

An https://www.bnm.gov.my/-/ed-ftvc exposure draft on Fair Treatment of Vulnerable Consumers was issued by on 28 February 2023 for feedback by 14 April 2023.

Pursuant to the exposure draft, BNM:

1. defines "vulnerable consumers" as a financial consumer who has:

1. the capacity to make his or her own financial decisions but may face challenges in accessing financial services or may require assistance to...