INSURANCE & INSURANCE RELATED ACTIVITIES


Application For Licencelabuan Insurance & Insurance Related Activities

Labuan insurance business means insurance business transacted in foreign currency and it includes life, general, reinsurance and captive insurance but does not include domestic insurance business. Labuan insurance may carry on reinsurance of domestic insurance business, in Malaysia currency and such other business as may specified by The Authority. The activities are governed by the Labuan Financial Services and Securities Act 2010.

1. Types of Licence

  • Captive insurance;
  • Direct insurance – Life/General;
  • Reinsurance;
  • Insurance manager;
  • Underwriting manager; and
  • Insurance broker.

2. How to apply?

Applicant is required to submit the respective prescribe forms accordance to the type of licence applied

3. Capitalization / working fund and solvency requirement

Type of LicenseMinimum Paid-up capital/Net Working Funds (RM) or its equivalent in any foreign currencyMinimum Solvency Margin
Single Owner/Multiple Owner Captive 0.3 million RM0.3 million
Rent-A-Captive/Cell Captive or Similar Vehicle 0.5 million RM0.5 million or 20% of net premium income of the preceding year or 3% of the actuarial valuation of liabilities for life insurance, whichever is greater.
General 7.5 million RM7.5 million or 20% of net premium income of the preceding year, whichever is greater.
Life 7.5 million RM7.5 million or 3% of the latest actuarial valuation of liabilities, whichever is greater.
Composite 10.0 million RM7.5 million or aggregate of 20% and 3% requirements in the above general and life business, whichever is greater.
Reinsurance 10.0 million Similar to that of direct insurance business but the minimum requirement is RM10.0 million instead of RM7.5 million.
Underwriting Manager, Insurance Manager and Broker 0.3 million Not applicable

4. Maintaining of Funds in Labuan

  • The applicant must submit banker’s certificate as evidence that the working funds are maintained in the account of the applicant with a bank in Labuan;
  • However, the applicant may apply for flexibility to pay up less than 100% of the working funds required, subject to the provision of adequate guarantee, acceptable to The Authority for the difference in amount.

5. Management

  • To establish management office in Labuan or has appointed or will appoint a licensed Labuan underwriting manager in Labuan;
  • Applicant for broker’s licence can establish its management in Labuan or appoint an insurance manager;
  • The applicant may set up a marketing office in Kuala Lumpur to facilitate meetings and business dealing with clients. The number of staff in the marketing office must balance the number of staff in the Management Office in Labuan (not applicable to captive and insurance broker);
  • The person in control, director and principal officer must be a fit and proper person.

6. Annual Licence Fee

All licensees are required to pay to The Authority annual licence fees on or before 15 January of each year;

Type of LicenceLicence Fee (RM)
Captive Insurer 10,000
Master Rent-A-Captive 13,000
Subsidiary Rent-A-Captive 3,000
General Insurer 30,000
Life Insurer 30,000
Composite Insurer 60,000
Underwriting Manager 10,000
Insurance Manager 10,000
Broker 10,000

7. Reporting Requirement

  • Labuan insurers are required to submit within six months after close of each financial year-end, 4 copies each of their audited annual balance sheet, profit and loss account, revenue account and, in the case of life insurance business, also an actuarial valuation report;
  • A foreign Labuan insurer established as a branch in Labuan is also required to submit the latest audited annual balance sheet of its parent company;
  • In the case of other Labuan insurance-related entities, they are only required to submit 4 copies each of their audited annual balance sheet and profit and loss account;
  • Provide statistic and information required in relation to prudential regulation and business operation to The Authority from time to time.

8. List of Labuan Insurers

Labuan insurance manager and Labuan underwriting manager are required to submit within 30 days from the close of its financial year, list of all Labuan insurers for whom such licensed Labuan insurance manager provides administration services or licensed Labuan underwriting manager provides underwriting services.