It's a commitment by foreign insurers, says Bank Negara

PETALING JAYA: Bank Negara Malaysia (BNM) today clarified that measures taken by some foreign insurers to rationalise their stakes in their local units are part of commitments made by foreign shareholders when they applied for entry into the Malaysian market.

BNM was responding to Reuters’ article entitled “Prudential Malaysia Unit in Talks with KWAP to Sell 30% Stake” published on Wednesday.

Reuters reported that Prudential PLC’s Malaysian unit is in talks with Kumpulan Wang Persaraan (Diperbadankan) (KWAP) to sell a 30% stake valued at about US$435 million, as overseas insurers race to comply with new foreign ownership rules.

In a statement, the Malaysian central bank explained that the requirement is not a recent directive or a new foreign ownership rule as implied in the article.

“The bank expects foreign insurers to honour these commitments,” BNM said.

In 2009, foreign ownership of Malaysian insurers was capped at 70%.