Podcast
Questions and Answers
What is a primary reason for the regulatory framework in the insurance industry?
What is a primary reason for the regulatory framework in the insurance industry?
Which of the following is NOT a key objective of Bank Negara Malaysia (BNM)?
Which of the following is NOT a key objective of Bank Negara Malaysia (BNM)?
What does the Financial Services Act (FSA) 2013 empower BNM to specify standards for?
What does the Financial Services Act (FSA) 2013 empower BNM to specify standards for?
Which aspect is directly addressed by the Islamic Financial Services Act (IFSA) 2013?
Which aspect is directly addressed by the Islamic Financial Services Act (IFSA) 2013?
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Which is NOT an outcome sought by governmental regulation of the insurance market?
Which is NOT an outcome sought by governmental regulation of the insurance market?
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Which of the following is NOT a requirement stated under the Companies Act 1965?
Which of the following is NOT a requirement stated under the Companies Act 1965?
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What is the primary function of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLATFA)?
What is the primary function of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLATFA)?
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Which of the following best describes the process of money laundering?
Which of the following best describes the process of money laundering?
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Which element is emphasized in the governance principles stated in the Companies Act 1965?
Which element is emphasized in the governance principles stated in the Companies Act 1965?
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What is a requirement for financial institutions under AMLATFA regarding transactions?
What is a requirement for financial institutions under AMLATFA regarding transactions?
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Study Notes
The Regulatory & Legal Framework of Underwriting
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The insurance industry is subject to rigorous regulation due to its direct and indirect impact on the public and its role in supporting economic growth.
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Key Regulatory Bodies:
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Bank Negara Malaysia (BNM): Malaysia's central bank, responsible for:
- Fostering fair and professional conduct in the insurance industry.
- Protecting consumer rights and interests.
- Ensuring insurer solvency and market conduct to enhance professional standards and consumer confidence.
- Promoting monetary and financial stability for sustainable economic growth.
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Financial Services Act (FSA) 2013: Empowers BNM to set standards for:
- Capital adequacy
- Liquidity
- Corporate governance
- Risk management
- Maintenance of reserve funds and insurance funds
- Preventing financial institutions from being used for illegal activities.
- Islamic Financial Services Act (IFSA) 2013: Empowers BNM to issue standards on Shariah requirements and ensure end-to-end compliance in the Takaful (Islamic insurance) sector.
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Bank Negara Malaysia (BNM): Malaysia's central bank, responsible for:
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Ancillary Legislation:
- Contracts Act 1950: Addresses online contracts, data messages, writing requirements, and the time and place of dispatch and receipt of data messages.
- Companies Act 1965: Regulates company registration, preparation and submission of annual accounts, asset valuation, liability valuation, and corporate governance principles.
- Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLATFA): Outlines offences related to money laundering and terrorism financing, and requires financial institutions to promptly report suspicious transactions exceeding specific thresholds, involving known or suspected individuals, or exhibiting unusual circumstances.
Money Laundering
- Definition: Converting illicitly-obtained cash or property into assets that appear to originate from legitimate sources, hiding the connection between the funds and the original criminal activity.
- Requirement: An underlying crime that generates the illicit profit.
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Description
Explore the regulatory and legal frameworks governing the insurance industry, specifically focusing on the roles of Bank Negara Malaysia and the Financial Services Act 2013. Understand the importance of regulation in fostering consumer protection and ensuring insurer solvency. This quiz will help clarify the complexities of the insurance regulatory landscape.
