The same can and should be replicated in this region, with the presence of foreign global insurers driving this process. Major developments in Malaysia – Liberalisation of the life and general insurance sectors On the home front, two major developments are taking place; (i) the introduction of the Life Insurance and Family Takaful Framework and (ii) liberalisation of the Fire and Motor Tariffs. Both these initiatives will allow the industry greater operational flexibility to innovate, while ensuring that consumers’ interests remain adequately protected. Our goal remains unchanged – to ensure Malaysians have the opportunity to avail themselves of efficient and effective means to manage risks with insurance and takaful solutions that are appropriate for their circumstances. For the life insurance and family takaful sector, the focus remains to increase the penetration level, as measured by the number of policies in force per population, from 56 per cent currently to 75 per cent by 2020. This is envisaged in the Economic Transformation Programme and this target is certainly achievable. Product innovation remains key to achieve this target, particularly in the micro-insurance and microtakaful space which would expand the reach to the underserved segments of society. In the non-life or general insurance space, a more market-driven pricing structure will be introduced for motor and fire insurance. This will also pave the way for the development of products that can be more responsive to consumer and business needs in the two most dominant lines of business in the Malaysian general insurance sector.

Conduct issues are viewed seriously by the Bank and we are fully committed to the responsibility entrusted to the Bank to effectively enforce regulatory requirements on fair conduct towards consumers. The Financial Services Act provides the Bank with explicit and expanded enforcement powers which include monetary and non-monetary actions. In addition to private and public reprimand as well as direction to make restitution to aggrieved parties. As a result of supervisory interventions by the Bank, more than RM30 million in premiums were refunded to the affected policyholders due to mis-selling practices in the sale of life insurance products in the past. 4  BIS central bankers’ speeches  The Bank had also directed insurers to refund the premiums in more than 700,000 cases involving the forced purchase of personal accident policies. In addition, insurers have been directed to modify or withdraw misleading advertisements, make call backs to consumers to confirm the products purchased without adhering to proper disclosure practices, as well as strengthen internal controls over sales and marketing practices with respect to bancassurance products. The enforcement measures undertaken signals the Bank’s low level of tolerance for misconduct. It also serves to remind the industry of the Bank’s expectation for common complaints and grouses against the industry such as delay in claim settlement and mis selling practices by agents to be completely eliminated or at the very least reduced significantly. Conclusion The period ahead for the Asia Pacific region presents new risks, challenges and opportunities for the insurance and takaful industries.