2013年-IMF国际货币组织全球_Malaysia_Publication_of_Financial_Sector_Assessment_Program_DocumentationDetailed_Assessment_of_Observance_of_Insurance_Core_Principles_84页_1mb

Summary of Malaysia's Financial Sector Assessment Program (FSAP) - Detailed Assessment of Observance of Insurance Core Principles

Core Content

This document presents the results of the Detailed Assessment of Observance of Insurance Core Principles (ICPs) in Malaysia, conducted by the International Monetary Fund (IMF) and the World Bank in 2013. The assessment was based on discussions with Malaysian officials and stakeholders, and it evaluates the regulatory and supervisory framework of the Malaysian insurance sector in relation to the ICPs issued by the International Association of Insurance Supervisors (IAIS). The assessment concludes that BNM, the regulator, is highly respected and its regulatory guidance and supervision are effective and comprehensive.

Main Findings

• Overall Observance: None of the 26 ICPs were rated as "not observed", and only four were rated as "partly observed". The rest were rated as "largely observed" or "observed".
• Regulatory Framework: The assessment was conducted against the ICPs issued in October 2011. The ICPs are structured in a hierarchy of supervisory material: statements, standards, and guidance.
• Insurance Industry Overview:
  • The Malaysian insurance sector accounts for about 6% of financial sector assets, equivalent to 15% of GDP.
  • The sector is relatively small and fragmented, with limited growth in insurance penetration and density rates.
  • Life insurance has been a key driver of improvement in these rates.
  • The insurance industry is a significant employer, but employment growth has been stagnant.
  • BNM has encouraged consolidation in the general insurance sector to strengthen the industry.

Key Points of the Assessment

I. Assessment of Insurance Core Principles

• Introduction and Scope:

  • The assessment covers the regulatory and supervisory framework for the insurance sector.
  • It includes the regulation and supervision of takaful and Islamic insurance products, though these are not part of the ICP assessment ratings.
  • The assessment was conducted by an external expert from OSFI Canada in April 2012.
  • The FSAP is the first of its kind for Malaysia, including a formal evaluation of its observance with the ICPs.

• Methodology:

  • Observance levels are determined based on the implementation of standards and guidance.
  • Ratings include: Observed, Largely Observed, Partly Observed, and Not Observed.
  • The assessment is based on the legal and regulatory framework in place at the time, and does not include ongoing initiatives unless they are implemented.

II. Institutional and Macro Prudential Setting

• Market Structure:

  • The insurance market is sophisticated, offering a wide range of products, but remains relatively small and fragmented.
  • Takaful comprises less than 15% of total premiums and contributions.
  • The market has seen growth in Islamic insurance products, especially family takaful, which accounts for 85% of total takaful funds.

• Ownership and Licensing:

  • Domestic banks and non-financial entities dominate ownership of insurers and takaful operators.
  • Foreign ownership is allowed up to 70% for insurers and reinsurers, and there is no limit for retakaful operators.
  • BNM issues a limited number of licenses, and cross-border operations by domestic insurers are minimal.

• Distribution Channels:

  • Agency is the primary distribution channel for both life and general insurance.
  • Bancassurance has gained prominence, leveraging banks' existing networks.
  • In the takaful sector, bancatakaful is the main distribution channel, contributing 53% to the sector's premium in 2011.

• Asset Composition:

  • Private debt securities (PDS) make up the majority of insurance fund assets.
  • Holdings in PDS are mostly in high-grade papers, and insurers have reduced equity holdings in favor of less risky assets like MGS and fixed deposits.

• Risk Management:

  • The overall capital adequacy ratio (CAR) for the insurance industry remains strong, well above the supervisory minimum of 130%.
  • The retention ratio for general insurers is around 70%, with significant use of reinsurance for large and specialized risks.
  • The claims ratio for motor third-party bodily injury insurance rose to a record high of 300%, but the overall motor claims ratio improved to 76.8%.

• Special Focus on Danajamin Nasional Berhad (Danajamin):

  • Danajamin is a financial guarantee insurer, licensed under the Insurance Act 1996 and supervised by BNM.
  • It provides guarantees to help viable companies access the bond/sukuk market.
  • Danajamin's exposure to the bond/sukuk market is high, and its role in the market is significant.
  • The regulatory framework for financial guarantee insurance is incomplete, and BNM has indicated plans to strengthen it.

Recommendations

• Implementation of Proposed Legislation: The proposed Financial Services Act (FSA) and Islamic Financial Services Act (IFSA) aim to consolidate and rationalize existing laws, and will address concerns regarding BNM's group-wide supervisory powers.
• Improvement of Risk Governance: The implementation of the Internal Capital Adequacy Assessment Process (ICAAP) and new risk governance guidance will help close current gaps in risk management practices.
• Enhancement of Transparency and Clarity: Formalizing expectations into current guidelines and clarifying approaches in certain areas are recommended.
• Monitoring of New Entrants and Risk Accumulations: Insurers with a recent change of control or those with limited business history should be closely monitored. Danajamin's risk accumulations should also be closely watched due to the incomplete regulatory framework.

Conclusion

The Malaysian insurance industry is well-regulated by BNM, which is viewed as a competent and respected authority. While there are minor shortcomings in the observance of certain ICPs, they do not pose significant risks to financial stability. The industry remains relatively small and fragmented, with opportunities for growth and consolidation. BNM is not a home supervisor to any insurance group, and cross-border activities are not significant, so there is no immediate urgency for changes in this area. The assessment recommends continued improvements in transparency, risk governance, and the regulatory framework for financial guarantee insurance.