BNM INVITES APPLICATIONS FOR DIGITAL INSURER, TAKAFUL OPERATOR LICENCES

KUALA LUMPUR, July 9 (Bernama) -- 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 will be granted to successful DITO applicants who can demonstrate their capacity and capability to achieve the nation’s intended policy outcomes 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 that can deliver strong and meaningful value propositions of inclusion, competition and efficiency in line with the Financial Sector Blueprint 2022–2026 strategic thrust to advance the digitalisation of the financial sector.

BNM said applicants are expected to meet the assessment criteria including the prudential aspects, for example, 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 on business conduct and consumer protection; shariah (where relevant), anti-money laundering and terrorism financing measures. They must be able to create meaningful value propositions to serve the country’s best interests.

“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 will observe a foundational phase over a period between three years and up to seven years to demonstrate their viability and operational soundness.

DITOs will also be accorded a lower minimum paid-up capital during the foundational phase to be proportionate to DITO’s business operations at their 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 noted.

-- BERNAMA