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INSURANCE COMPANIES' SUPERVISORY LAW - Coggle Diagram
INSURANCE COMPANIES' SUPERVISORY LAW
1)THE FINANCIAL SERVICE ACT 2013
a) Authorization and Registration
-prohibit the insurance company from operating both genaral and life insurance simultaneously
-requirement of the company granted a license under the FSA to maintain a min capital funds or surplus of asset over liabilities
b) Business Conduct and Consumer Protection
-able to regulate more effectively the business conduct of the financial services providers
-to provide a fair, professional and more responsible services to the public
2) THE ISLAMIC FINANCIAL SERVICES ACT 2013
a) Shariah Compliance
-established the Shariah Advisory Council(SAC) to ensure the takaful operations are in compliance with Shariah parameters
-established of Shariah committee for the purpose of advising a licensed person in ensuring its business,affairs and activities are complying with Shariah
3.INSURANCE COMPANY
-organization that offer and provide insurance protection exchange for a premium payment.
-customers are the insured/policyholders
-regulated and supervised by BNM
-subject to control imposed by Insurance Act 1996 as well other Acts like the Company Act 1965
-min Paid Up Capital : RM100MILLION
1.1 ROLES OF INSURANCE COMPANIES IN AN ECONOMY
i.to reduce risk in society through system of pooling individual risks
ii.to prevent or min the size of losses
iii.insurance companies are among the most important sources of funds used for economic growth
iv.insurance companies have generated numerous employment opportunities
v.some insurance companies operate internationally - The import and export of insurance services is known as 'invisible trade'.
1.2 FACTORS AFFECTING OPPERATION IN INSURANCE COMPANY
i.Population trends
ii.Economic trends
iii.Technological changes
iv.Changes in the Regulatory Environment
1.3 SUPERVISION OF INSURANCE COMPANIES
i.for the promissory nature of insurance contracts
ii.in order to maintain the solvency of the insurance contract
iii.in order to ensure reasonable premium rate
iv. it deals with some complex terms that might not been understand by the ordinary persons.
v.in order to create a good and quality product
1.4 INSURANCE INDUSTRY IN MALAYSIA
i.Life business only
ii.General business only
iii.Life and General business
iv.Reinsurance business