Bank Negara Issues Exposure Draft of Policy Document on Insurance and Takaful Aggregators
21 June 2019
- a person intending to become a registered insurance and takaful aggregator; and
- an insurance and takaful aggregator registered under section 18(1) of the Financial Services Act 2013 (“registered aggregator”).
The expression “insurance and takaful aggregation business” means the business of providing services through any electronic means that:
- sources, aggregates and compares insurance or takaful products of more than one licensed person; and
- makes referrals to any such licensed person in respect of the procurement of such insurance or takaful products; or
- arranges the procurement of such insurance or takaful products through such electronic means.
The insurance and takaful aggregation business is a new category of business under the Financial Services Act 2013.
The exposure draft sets out the proposed requirements and guidance for registration of a person who intends to carry on insurance and takaful aggregation business and the obligations to be complied with by a registered aggregator.
A person who intends to carry on insurance and takaful aggregation business must be registered with BNM. It must, among others:
- fulfil the requirements set out in Box 1 of section 7 of the exposure draft, including the requirement to be incorporated under the Companies Act 2016 and the criteria to be satisfied by its directors, shareholders management personnel); and
- submit to BNM the documents and information set out in Box 2 of section 7 of the exposure draft – this requirement is a continuing obligation that also applies to a registered aggregator.
A registered aggregator must, among others, comply with the following requirements:
- notify BNM in writing within 14 days of any changes to its
- shareholder, director or chief executive officer;
- web address; or
- office address;
- disclose the general information set out in section 10 of the exposure draft, including its role and status, the nature of its business, the remuneration it receives for its services and the nature of its relationship with licensed persons;
- ensure the suitability of the products being offered and inform the consumers on factors to consider in choosing a product that is suitable to their needs and circumstances;
- disclose the information set out to in sections 11 and 12 of the exposure draft on the insurance and takaful products;
- ensure that the insurance and takaful products are presented in a transparent and impartial manner to avoid systematic bias that may lead to suboptimal choices by consumers;
- establish a consumer assistance and redress mechanism, including an internal complaints and enquiries handling procedure and consumer support services such as live chat features, hotline services or email enquiry facilities;
- have in place written policy and procedures to identify and manage any conflict of interest between itself and any person from adversely affecting the interest of the consumers;
- ensure that its information technology system, including security, complies with the requirements in section 19 of the exposure draft.
A registered aggregator is prohibited from providing recommendations to consumers in respect of any insurance or takaful products.
Submission of statistics
A registered aggregator must submit to BNM the following information and statistics on a quarterly basis:
- the number of complaints received (with a break down by the types of complaints) and the number of unique site visits in the format specified in Appendix 2 Form A of the exposure draft;
- if a registered aggregator makes referrals in respect of any insurance or takaful products for a licensed person:
- the number of insurance or takaful referrals;
- the number of insurance or takaful referrals which resulted in the purchase of those products; and
- the total insurance gross premiums or takaful contributions from referrals which resulted in the purchase of those products,
in the format specified in Appendix 2 Form B of the exposure draft; and
- if a registered aggregator arranges the procurement of any insurance or takaful products for a licensed person:
- the number of insurance policies or takaful certificates purchased; and
- the total insurance gross premiums or takaful gross contributions purchased,
in the format specified in Appendix 2 Form C of the exposure draft.
The deadline for submission of feedback is 19 July 2019.