KUALA LUMPUR, Feb 19 (Reuters) - Brunei will introduce new guidelines for its Islamic insurance (takaful) sector by June, in order to standardise the way agents are managed by firms.
The guidelines will regulate commission rates payable to agents and the qualifications required for them to sell takaful products, Osman Jair, chairman of industry body Brunei Insurance & Takaful Association (BITA), said in an interview.
“We will sign an inter-company agreement so companies will be better disciplined,” said Jair.
Brunei, which has southeast Asia’s highest per capita income after Singapore, is the latest country to reform its takaful sector in the hope of stimulating growth.
Malaysia announced new rules in July 2013 requiring the separation of life and general business lines, while Indonesia will mandate takaful firms to be spun off into independent entities this year.
BITA was launched in November last year and it is the first to bring all four of Brunei’s takaful firms under one roof. “We would like to standardise the industry, this is the main thing,” said Jair. The impending guidelines are being reviewed by industry consultants and Autoriti Monetari Brunei Darussalam (AMBD), the country’s central bank.
“We want the treatment of agents to be done right. This is so agents can generate serious income, and not take it as part-time work,” said a source with AMBD, who did not want to be named as he was not authorised to comment.
The last meeting on the guidelines took place on Feb. 6 and reviewed the different jurisdictions involved in implementation, he added.
With a national population of under half a million people, Brunei’s insurance sector is considerably smaller than those of neighbouring Indonesia and Malaysia. Takaful firms own 33 percent of total insurance assets. (Reporting by Al-Zaquan Amer Hamzah; Editing by Andrew Torchia)