Changes to Investment-Linked Policy effective 1 July 2019 2019年7月1日 调整投资联接保单

You may have recently read about ILP insurance guideline changes starting 1/7/2019. Well, these are the exact words from regulatory guideline: http://www.bnm.gov.my/index.php?ch=57&pg=140&ac=781&bb=file [page 23] In summary, using example below to explain what it is all about: 1) for a current ILP quotation as shown, although the basic policy term is 64 years, but the [Blue Box Bold Message] stated that the quoted monthly premium of RM300 may only sustain the policy to inforce for a period of 43 to 48 years depending on projected investment return. 2) the new regulatory guideline 16.1 requires the policy to sustain inforce until the end of policy term, which means [Blue Box Bold Message] in quotation would indicate the policy may sustain to inforce for 64 years (instead of just 43 to 48 years in current example quotation) to match with the basic policy term of 64 years. How can this be achieved? Your guess is as good as mine. 3) in order to comply to the new regulatory guideline, some insurance companies opt to replace currently available ILP plan with new ILP plan. How will the new ILP plan fair compare to current ILP Plan? Let us wait and see ...or do we ?

《The Star》 Great Eastern weighs options on stake (22th September 2017)   (http://www.thestar.com.my/business/business-news/2017/09/22/great-eastern-weighs-options-on-stake/) 《南洋商报》大东方保险拟减持大马业务传要以42亿脱手 (22th September 2017)   (http://www.enanyang.my/news/20170922/大东方保险拟减持大马业务-br-传要以42亿脱手/)

Of late, there were viral news circulating on social media with confusing titles suggesting several major foreign owned insurance companies were selling stakes and possibly exiting Malaysia market. While the news of these foreign owned companies planning to sell part of the stakes in Malaysia was true, the purpose and intention however were grossly misleading. This stake "disposing" exercise is in fact required by Bank Negara Malaysia, and the deadline to meet this requirement is June 2018 The details of Bank Negara Malaysia requirement is well explained in the above news link.

Goods and Services Tax (GST) and Insurance Policies (effective 1st April 2015)

A) General Insurance Policy - Almost all general insurance policies will be subjected to 6% GST, such as fire insurance, motor insurance, personal accident insurance, medical insurance and etc. - 6% GST is charged on and added to premium payable. B) Life Insurance Policy - All basic life insurance policies are exampted from GST. - All personal accident riders are subjected to GST. - All medical riders (including hospitalisation & critical illness) are subjected to GST. - All miscellaneous fees are subjected to GST, including ILP policy fee, alteration fee and etc. - Traditional Policy: 6% GST is charged on and added to premium payable, where applicable. - Investment-Linked Policy (ILP): 6% GST is charged on insurance charges and deducted from accumulated fund units. note: GST is subject to continuous revision by the relevant authorities. The above information is correct to the best knowledge of the author at time of writing.