Bank Negara said to mull enforcing cap on foreign insurer ownership

MALAYSIA is weighing tougher enforcement of a cap on foreign ownership of insurers as it seeks to boost local participation in the industry, people with knowledge of the matter said.

The central bank is considering applying more strictly an existing policy that foreign companies owning 100 per cent of local insurance firms must pare their stakes to no more than 70 per cent, according to those people. It could make an announcement on the matter as soon as this month, they said, asking not to be identified because the information is private. 

Bank Negara Malaysia, which has routinely granted extensions to firms that didn't comply, may be less lenient in the future and require such companies to show they have the country's best interests at heart, the people said.