Insurance sector still resilient, says council

Regulatory framework ensures insurers maintain adequate capital

The Star, Tuesday September 23, 2008, KUALA LUMPUR: The local insurance industry remains resilient despite the volatile global economic environment, said Malaysian Financial Planning Council (MFPC) president Kee Wah Soong.

He said Malaysia’s economic structure had evolved and developed over several decades to become more diversified.

MFPC has received enquiries on the recent developments in the global financial markets, particularly concerning US insurance giant AIG.

Kee explained that in Malaysia, AIG Bhd, a chartered financial services institution licensed by Bank Negara, was subject to stringent local regulatory and high level capital requirements as prescribed by the Insurance Act and Regulation.

Kee Wah Soong

”The regulatory and supervisory framework in the local insurance industry ensures that adequate capital is maintained by companies to fulfil obligations to policyholders,” he said in a statement yesterday.

Kee added that there was also a separation of assets and structure between the local subsidiary and its parent company.

This, he said, ensured that the subsidiary’s operations were not affected by any negative developments in the parent company.

”As a locally incorporated company, AIA’s capital is committed to supporting its domestic operations.

“With more than 96% of its total assets invested in Malaysia, we are confident that AIA would continue to meet its obligations to policyholders and customers,” he said. — Bernama