Liberalisation of financial sector

The details of the liberalisation of the financial sector announced by PM and BNM (those relevant to insurance and takaful):

• Up to 2 new family takaful licences to be granted in 2009 (all existing takaful licences are composite, the new ones seem to be restricted to family takaful business only)
• Limit on foreign shareholding in insurance and takaful companies increased to 70%
• Case-by-case consideration for limit beyond 70% if players can facilitate consolidation and rationalisation of the insurance industry
• Restriction on establishment of branches imposed on locally-incorporated foreign insurers and takaful operators uplifted
• Restriction on bancassurance tie-up imposed on locally-incorporated foreign insurers and takaful operators uplifted
• Greater flexibility to employ specialist expatriates
• Offshore insurance companies licensed under Lofsa can have physical onshore presence from 2011 after meeting predetermined criteria

Industry statistics:

• Financial sector contribution to GDP: 9.2% (2000), 11% (2008)
• 2006-08: Finance and insurance sector grew 8.8%, GDP growth 6%
• 2004-08: Islamic banking and takaful sector grew 20%
• >140,000 workers employed in banking institutions and insurance companies

Source: BNM's Press Statement, PM's Press Statement, Issuance of Family Takaful Licences