January 19th, 2024 | Sterling

Bank Negara Malaysia Issues Policy Ensure Licensed Insurers and Takaful Operators are Fit and Proper.

Bank Negara Malaysia (the Malaysian insurance regulatory body) issued policy documents on the Professionalism of Insurance and Takaful agents on 17th April 2023. The policy document came into effect on 1st January 2024.  

The objective of the policy is to have licensed insurers and takaful operators (ITOs) take steps to ensure agents are sufficiently qualified, competent, and act professionally, while also  improving public confidence in the integrity of agents.  

One of the requirements outlined in the policy document is to assess if an individual is “fit and proper” prior to appointing them as agents. 

Fit and Proper criteria is based on the following: – 

  • Probity, personal integrity, and reputation 
  • Competency and capability 
  • Financial integrity 

  Guidelines require ITO’s to conduct fit and proper assessments for their appointed agents at regular intervals or whenever the ITO becomes aware of any information that may compromise the appointed agent’s fitness and propriety. 

  It’s important also to note that the Malaysian policy document highlights the employer’s requirement of conducting reference checks with an individual’s current and past employers/ITOs for the last seven 7 years (including any internal disciplinary proceedings/actions) using a specific template provided by Bank Negara Malaysia. 

The policy document came into effect on 1st January 2024

Employers’ Next Steps 

  Employers hiring within the Malaysian insurance industry  should consider the following to ensure they’re prepared to meet the new fit and proper requirements: –   

  • Use appropriate checks for screening purposes to gather information that will support an individual’s fit and proper assessment to work as an agent. 
  • Determine the frequency of fit and proper assessments for their existing agents. 

How Can Sterling  Help? 

Sterling is a leading provider of background checks in the Asia Pacific region, with operations around the world, deep regional expertise, local service proficiency, and reliable global fulfilment capabilities. 

Chat with our team today about how our screening solutions can help enable your organisation to make informed and regulatory compliant hiring decisions. 

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