Bank Negara considering more flexibility for insurance industry
KUALA LUMPUR, Sept 22 – Bank Negara Malaysia is considering more flexibility for the insurance industry and insurance companies in order to formulate a commission structure which is suitable with their respective business philosophies.
Bank Negara Deputy Governor Datuk Muhammad Ibrahim said the consideration would be based on the Financial Sector Plan 2011-2020 and was also in line with current economic developments.
He was optimistic, by allowing the insurance industry to determine its own commission structure, it would be just as transparent as the existing commission structure.
“Liberalising the commission structure is not a new issue, it has been practised in many countries in the region.
“As such, it is important for agents to be able to operate in a transparent and liberal environment,” he told 500 participants at the Bumiputera Life Insurance Agents Convention 2012.
However, Muhammad said the interest of the general public must always be protected so that they do not shoulder any unreasonable cost and are well informed to make timely decisions.
He said under the Financial Sector Plan, Bank Negara would encourage insurance and takaful industries to offer more options in the form of micro products to those who have less access to financial services.
“Insurance services will be made available more efficiently by way of cost, easy accessibility, easy to understand and convenient to apply for compensation,” he said.
Muhammad also said the central bank would allow insurance companies to provide training and flexible development for insurance agencies in order to assist new agents entering the industry.
The move, mooted by Bank Negara, is aimed at strengthening the insurance industry in Malaysia.
“Incentive packages are also being considered in order to encourage life insurance agents to upgrade their productivity, expertise and professionalism in a move to upgrade their service,” Muhammad added. – Bernama