Malaysian insurance industry still resilient: Groups

Business Time Online, Monday, 22 September, 2008: THE National Association of Malaysian Life Insurance and Financial Advisors (Namlifa) and the Malaysian

Financial Planning Council (MFPC) have given their assurance that the local insurance industry remains resilient.

Both associations were responding to concerns relating to Malaysia's insurance industry in the wake of the American International Group Inc (AIG) bailout effort in the US.

Their response lent further support to AIG General Insurance (Malaysia) Bhd's, which had last week said that business was as usual and that it was not impacted by the ongoing financial issues in the US.

In a statement issued yesterday, Namlifa president Michael Kok Fook On said that the insurance business written in Malaysia is well-regulated by Bank Negara Malaysia.

He added that all insurance policies underwritten by insurance companies in Malaysia are subjected to stringent local regulatory and capital requirements as prescribed by the Insurance Act and Regulations under the close supervision of Bank Negara.

Kok said that AIA Bhd is not impacted by the financial issues in the US as AIA is locally incorporated with more than 96 per cent of its total assets invested in Malaysia.

"AIA is well-capitalised and it maintains separate reserves in Malaysia in line with the regulations, to meet the obligations of its policyholders," Kok said.

"With more than 60 years of market experience and with a group of highly-trained insurance professionals, Namlifa confidently believes that AIA will continue to meet its obligations to all Malaysian policyholders," Kok added.

MFPC president Kee Wah Seong said that the Malaysian economic structure has evolved and developed for several decades to become a much diversified economy today.

"The regulatory and supervisory framework in our insurance industry ensures that adequate capital is maintained by the insurance company to fulfil its obligations to policyholders.

"The separation of assets and structure between the local subsidiary and parent company ensures the local company's operations are not impacted and remain protected from any negative developments involving the parent company," he said in a separate statement.

He said AIA is committed to support its domestic operations and is confident that the company will continue to meet its obligations to policyholders and customers.