Malaysia gives insurers until April to comply with foreign ownership rules

Great Eastern Holdings

14/02/2019 08:53

KUALA LUMPUR, Feb 14 (Reuters) - Malaysia has given
foreign-owned insurance companies until April to outline their
plans to comply with local shareholding requirements, the
central bank said on Thursday.
    Bank Negara Malaysia, which regulates insurers, is pushing
to enforce a 2009 rule that sets a 70 percent cap on foreign
ownership of local insurance businesses. The central bank had
issued a directive in 2017 urging insurers to comply.
    The bank is expecting insurers to come up with "concrete
plans" by early April on how they will comply - via divestments,
listings or corporate social responsibility contributions,
central bank governor Nur Shamsiah Mohd Yunus told media after
announcing Malaysia's fourth-quarter economic performance.
    Cutting back shareholding to increase domestic participation
could thrust total deals worth more than $2 billion on foreign
players, such as UK-based Prudential  PRU.L , Japan's Tokio
Marine Holdings Inc  8766.T  and Zurich Insurance  ZURN.S .
    Singapore-based Great Eastern Holdings  GELA.SI  has opted
to contribute 2 billion ringgit ($492 million) to a national
health insurance scheme, which the finance minister said was an
alternative to complying with the ownership cap.  urn:newsml:reuters.com:*:nFWN1ZO07O
    Foreign insurers have been expanding in Southeast Asian
countries, attracted by the strong economic growth, rising
middle-class income and lower insurance penetration.
    Malaysia's economy expanded at a faster pace in the final
quarter of 2018 at 4.7 percent, ending a year of weakening
momentum as resilient exports helped to shore up growth amid a
slowdown in global demand from the U.S.-China trade war.
 urn:newsml:reuters.com:*:nL3N2072Z7
 ($1 = 4.0670 ringgit)

 (Reporting by Liz Lee; Editing by Himani Sarkar)
 ((liz.lee@thomsonreuters.com; +60323338039; Reuters Messaging:
liz.lee.thomsonreuters.com@reuters.net))