This Exposure Draft (ED) sets out proposed regulatory requirements and guidance for determining the capital adequacy of licensed insurers and licensed takaful operators (including professional reinsurers and professional retakaful operators), as part of the Bank’s multi-phased review of the capital adequacy framework.

The proposed enhancements aim to ensure that the capital adequacy framework:

• appropriately reflects the underlying risk exposures of licensed insurers and licensed takaful operators based on measurement approaches that are sufficiently risk-sensitive and responsive to changes in the market conditions;
• facilitates consistent and comparable capital adequacy measurement across the insurance and takaful industry taking into account the similarities in the underlying risks, while considering the differences between the underlying business models of insurance and takaful; and
• achieve greater alignment with key elements of the global regulatory capital standards, with modifications appropriate to the Malaysian market.

The Bank invites written feedback on this ED, including issues or areas to be clarified or elaborated further and any alternative proposals that the Bank should consider.

Responses must be submitted electronically and emailed to [email protected] by 31 December 2024.

Issuance Date
28 June 2024

Issuing Department
Prudential Financial Policy Department

Documents

• Exposure Draft on Risk-Based Capital Framework for Insurers and Takaful Operators
• Response Template