ISLAMIC FINANCIAL SERVICES ACT

2013
 An act to provide for the licensing
and regulation of Islamic banking
business

 There are 291 sections divided into

18 Parts (categories)

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Insurance Act 1996

 An Act to provide new laws for the licensing

and regulation of insurance business,
insurance broking business, adjusting
business and financial advisory business and
for other related purposes
 The act vested the authority to administer
the provisions to BNM
 It has 18 Parts with 255 sections

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 The insurance act seeks to improve the legislative
framework governing the supervision and regulation
of the insurance industry
 Thus, there will be
- a better accountability for insurers
- stronger insurers’ financial standards
- greater protection to policy holders
- better operations according to sound insurance
principles
 The insurance industry will grow in tandem with
other financial institutions and fulfill its role in
national economy
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Sec 2 - Interpretation
 “adjuster” means a person who carries on
adjusting business either for the insurer or the
policy owner or both;
 “adjusting business” means the business of
investigating the cause and circumstances of a
loss and ascertaining the quantum of the loss;
 “insurance” includes reinsurance;
 “reinsurance” means insurance cover effected by
an insurer with a second insurer on the risks,
wholly or partly, it has accepted and includes any
similar arrangement by a branch of the insurer in
Malaysia with its branch outside Malaysia
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 “insurance agent” means a person who does
all or any of the following:
 (a) solicits or obtains a proposal for insurance
on behalf of an insurer;
 (b) offers or assumes to act on behalf of an
insurer in negotiating a policy; or
 (c) does any other act on behalf of an insurer
in relation to the issuance, renewal, or
continuance, of a policy;
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 “insurance broker” means a person who, as
an independent contractor, carries on
insurance broking business and includes a
reinsurance broker;
 “insurance broking business” means the
business of soliciting, negotiating or
procuring a policy with an insurer, or the
renewal or continuance of the policy, for a
policy owner other than himself and includes
reinsurance broking for an insurer;

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 “insurance claim” means a demand for
payment of an amount due under a policy;
 “insurance fund” means an insurance fund
established and maintained under section
38;
 “insurer” includes a professional reinsurer;

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 “life business” means the business of
undertaking liability under a life policy;
 “life policy” means a policy by which payment
of policy moneys is insured on death or
survival, including extensions of cover for
personal accident, disease or sickness and
includes an annuity but does not include a
personal accident policy;

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 “personal accident policy” means a policy
providing fixed pecuniary benefits or benefits
in the nature of indemnity or both against
risks of the person insured sustaining injury or
dying as the result of an accident or
becoming incapacitated in consequence of
disease;

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 “policy” means an insurance policy and
includes a cover note or a contract of
insurance, whether or not embodied in or
evidenced by an instrument in the form of an
insurance policy,
 “premium” means the amount payable to an
insurer under a policy as consideration for the
obligations assumed by the insurer;

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Takaful Act 1984

 An Act to provide for the regulation of takaful

business in Malaysia and for other purposes
relating to or connected with takaful.
 It has 4 Parts and 69 sections
 Part I – Preliminary
 Part II – Conduct of Takaful Business
 Part III - Returns, investigations, winding up
and transfers of business
 Part IV – Miscellaneous and general

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Interpretation
 “takaful” means a scheme based on
brotherhood, solidarity and mutual
assistance which provides for mutual financial
aid and assistance to the participants in case
of need whereby the participants mutually
agree to contribute for that purpose;

 “takaful business” means business of takaful

whose aims and operations do not involve
any element which is not approved by the
Syariah;
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 “operator” means a company or a society
which carries on takaful business registered
under section 8 and includes an international
takaful operator registered under section
40B;
 “participant” includes, where a certificate has
been assigned, the assignee for the time
being and, where they are entitled as against
the takaful operator to the benefit of the
certificate, the personal representatives of a
deceased participant;
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 “re-takaful” means an arrangement
consistent with sound takaful principles for
re-takaful of liabilities in respect of risks
incurred or to be incurred by the takaful
operator in the course of his carrying on
takaful business;

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Advice of Syariah Advisory Council (SAC)
 Sec 53A (1) A takaful operator, a takaful
agent, a takaful broker or an adjuster may
seek the advice of the Syariah Advisory
Council on Syariah matters relating to its or
his takaful business and the takaful operator,
takaful agent, takaful broker or adjuster shall
comply with the advice of the Syariah
Advisory Council.

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Anti-Money Laundering and Anti-
Terrorism Financing Act 2001
 This revised Act which came into force on 15
January 2002, is to provide for:
- the offence of money laundering
- the measures to be taken for the prevention
of money laundering and terrorism financing
offences
- the forfeiture of terrorist property and
property involved in, or derived from, money
laundering and terrorism financing offences
 Consist of 7 Parts and 93 sections
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 “money laundering” means the act of a person
who:
(a) engages, directly or indirectly, in a transaction
that involves proceeds of any unlawful activity;
(b) acquires, receives, possesses, disguises,
transfers, converts, exchanges, carries, disposes,
uses, removes from or brings into Malaysia
proceeds of any unlawful activity; or
(c) conceals, disguises or impedes the
establishment of the true nature, origin,
location, movement, disposition, title of, rights
with respect to, or ownership of, proceeds of any
unlawful activity
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 , where —
 (aa) as may be inferred from objective factual
circumstance, the person knows or has
reason to believe, that the property is
proceeds from any unlawful activity; or
 (bb) in respect of the conduct of a natural
person, the person without reasonable
excuse fails to take reasonable steps to
ascertain whether or not the property is
proceeds from any unlawful activity;
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PART II - MONEY LAUNDERING OFFENCES
Offence of money laundering
 Sec 4 (1) Any person who —
(a) engages in, or attempts to engage in; or
(b) abets the commission of, money
laundering, commits an offence and shall on
conviction be liable to a fine not exceeding
five million ringgit or to imprisonment for a
term not exceeding five years or to both

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Development Financial
Institutions Act 2002
 The DFIA came into force on 15 February
2002
 Focuses on promoting the development of
effective and efficient development financial
institutions (DFIs) to ensure that the roles,
objectives and activities of the DFIs are
consistent with the Government policies and
that the mandated roles are effectively and
efficiently implemented

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 DFIA also emphasises on efficient
management and effective corporate
governance, provides a comprehensive
supervision mechanism and mechanism to
strengthen the financial position of DFIs
through the specification of prudential
requirements

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