How to check if an insurer or takaful operator is licensed

Insurance and takaful companies in Malaysia must be licensed by Bank Negara Malaysia. You can check a company against BNM's Financial Sector Participants Directory at bnm.gov.my before you take up a policy.

Insurance and takaful policies are long-term promises. Before you pay a premium or contribution, it helps to know that the company behind the policy is licensed. This guide explains who licenses insurers and takaful operators in Malaysia, and how to check one yourself.

Who licenses insurers and takaful operators

Bank Negara Malaysia (BNM) regulates insurance and takaful. Conventional insurers are licensed under the Financial Services Act 2013 (FSA). Takaful operators are licensed under the Islamic Financial Services Act 2013 (IFSA). Both laws came into force on 30 June 2013 and replaced the older Insurance Act 1996 and Takaful Act 1984.

BNM has stated that only licensed entities may carry on insurance business or takaful business in Malaysia. In the past, BNM has issued public advice about apps that looked like insurance or takaful but were run by companies not licensed under the FSA or IFSA.

How to use BNM's directory

BNM publishes a Financial Sector Participants Directory on its website, bnm.gov.my, under Regulations. Choose "Insurance Companies and Takaful Operators" to see licensed insurers and takaful operators, with the type of business each is licensed for, such as life insurance, general insurance, family takaful or general takaful.

Under "More Lists", the same directory shows approved insurance and takaful brokers, registered adjusters, and approved financial advisers and their representatives.

Check the exact company name on the proposal form or policy document, not only the brand name in an advert or app. Long lists run across several pages, so use the "Next" button before deciding a name is missing.

If you are unsure, you can call BNM's contact centre, BNMTELELINK, at 1-300-88-5465.

PIDM protection for policy benefits

Perbadanan Insurans Deposit Malaysia (PIDM) runs the Takaful and Insurance Benefits Protection System (TIPS). Insurers licensed under the FSA for life or general insurance, and takaful operators licensed under the IFSA for family or general takaful, are PIDM members. PIDM says membership is compulsory under its law.

TIPS protects eligible benefits if a member stops operating and cannot meet claims. According to PIDM, most benefits are protected up to RM500,000, and eligible healthcare benefits are protected at 100%. The protection is free and automatic.

Not every company is a member. PIDM lists reinsurers, international takaful operators, offshore insurers, and brokers and adjusters among those that are not. You can see the list of insurer members at pidm.gov.my, and members must display the PIDM membership sign at their offices.

Investment products are checked elsewhere

BNM states that it does not approve or keep a list of registered investment schemes or companies. If a product is sold as an investment rather than as insurance or takaful, check the company with the Securities Commission at sc.com.my/investment-checker. You can also search the name on the SC Investor Alert List and BNM's Financial Consumer Alert List.

SmartChecker shows register records and reviews for the companies it lists, so you can see official information in one place.

Common questions

Is a policy from an unlicensed company protected by PIDM? No. TIPS covers PIDM insurer members, which are insurers and takaful operators licensed under the FSA or IFSA.

Are insurance and takaful brokers listed by BNM? Yes. BNM's directory has a list of approved insurance and takaful brokers under "More Lists". Brokers are not PIDM members.

Is an offshore insurer covered by TIPS? No. PIDM lists offshore insurers among the companies that are not members of TIPS.