As a mobiliser of long term private savings, life insurance has a critical role in providing long term funding for the massive investment required to achieve the growth and income objectives of Vision 2020, that is, in becoming a fully developed economy. In line with the rapid changes taking place in the business landscape of the insurance industry, the authorities have moved away from prescriptive regulation to one that allows for a more flexible operating environment. Specifically, insurers are now operating in an environment where regulations have become more principle-based. The principle-based regime places greater expectation and demands on the leadership and senior management of insurers in driving fundamental changes required within the organization in response to the changing regulatory landscape. In particular, senior management of insurers must raise the bar for the organization to achieve best-in-class practices that are aligned with the organization's strategic orientations, rather than merely complying with a minimum set of prescribed requirements. A pre-requisite for this transformation is that senior management acquires a thorough understanding of the relationship and inter-linkages between the various components of the insurance business, and to manage these dynamics in a manner that optimizes performance. 2  BIS Review 123/2007  The regulatory shift also places greater prominence on creating a strong risk management culture that is fundamental to sound insurance operations. In Malaysia, the transition to a Risk Based Capital Framework and the implementation of the risk-based supervisory regime constitute important capacity building elements of this change.

In just a few years, many new electronic services and gadgets have become natural parts of our lives. This has also influenced how we execute payments. Payments via Internet banking, mobile banking and card payments over the Internet have become the norm. Paperbased instruments such as cheques and mail giros have become less important. Norway is a good example of the transition from a paper-based to an electronically-based payment system. Only twenty years ago, 90 per cent of payments from deposit accounts were made using paper-based instruments such as cheques and paper giros. Today, more than 95 per cent of such payments are made electronically, mostly via payment cards and Internet banking. The first results from Norges Bank’s cost survey were published today. The survey estimates the social costs of using and producing payment services in Norway to around 11 billion kroner, or just under half a per cent of GDP. This estimate covers payment activities by banks, subcontractors, the central bank, households and merchants. The estimate for Norway is quite low in an international context, although estimation methods may vary. How we organise our payment system has consequences beyond the system. Direct debiting and electronic invoicing will, for example, involve substantial savings for businesses. Thus the potential savings for banks and the rest of society of moving towards more efficient payment systems are considerable. Payment cards and Internet banking have not only replaced cheques and mail giros, they have also contributed to a reduction in the use of cash.