Malaysia central bank says no new policy on foreign ownership of insurers' local units

[KUALA LUMPUR] Malaysia's central bank said on Tuesday that foreign shareholders of local insurers must honour their commitment in maintaining specified levels of domestic shareholding.

Bank Negara Malaysia (BNM) said there is no new policy on foreign ownership in insurance companies, and that the requirement is part of commitments made by foreign shareholders when they applied for entry into the Malaysian insurance market.

"As the regulator, Bank Negara Malaysia expects adherence to these agreements and will play a facilitative role to ensure these commitments are met," the central bank said in a statement.

Reuters reported that Bank Negara Malaysia sent letters to wholly owned insurers three weeks ago requesting their foreign parents to reduce their stakes in line with regulation for domestically incorporated insurers.

Foreign ownership of Malaysian insurers was set in 2009 at 70 per cent - or more if the buyer could help consolidate and rationalise the industry. But some foreign insurers operating in the country could still be wholly owned by their overseas parent.

REUTERS