Guide to Set Up Labuan Insurance Broker
A Labuan insurance broker is defined as a person who is licensed to arrange Labuan insurance business on behalf of prospective or existing policy owners and arrange Labuan reinsurance business on behalf of any insurer seeking reinsurance.
Additionally, a Labuan insurance broker may perform financial planning activities. A Labuan insurance broker is prohibited from dealing with residents (except for high-net-worth individuals, reinsurance and others as defined by Labuan FSA from time to time) and broker for direct Malaysian risks. The applicant should have at least 3 years of relevant experience or audited annual accounts of the company.
The Approved Activities:
Direct insurance business: May broke direct insurance business (except direct Malaysian risks) with any insurance company irrespective of whether they are licensed under Labuan Financial Services and Securities Act 2010 (LFSSA) or otherwise.
Life insurance business: May broke life insurance policy for high net worth individual Malaysians with life insurance companies licensed under LFSSA.
Reinsurance business: May broke reinsurance of direct Malaysian risks transacted in Malaysian ringgit.
Licensing and Operational Requirements for Labuan Insurance Broker:
- Maintain minimum paid-up capital or working funds of RM300,000 or its equivalent in any foreign currency.
- Must be a member of the Labuan International Insurance Association.
- Must provide a letter of guarantee or undertaking from the parent company to Labuan FSA (if applicable)
- For operations:
- Either: establish an operational office in Labuan managed by a management team that has adequate knowledge and expertise in the insurance business of minimum 4 staffs
- Must appoint an auditor
- Appointment of any person in control, director or principal officer (PO) must obtain prior approval from Labuan FSA. However, Labuan insurance brokers that are established as a branch are not required to obtain approval on the appointment of their directors.
- The person in control, director and PO must be fit and proper persons and shall not be subject of any adverse report from any reliable sources.
- Must have professional indemnity insurance coverage of a minimum of RM2.5 million or its equivalent in any foreign currency.
- Comply to yearly corporate tax filing with Labuan Inland Revenue Board and Labuan FSA.
- Other ON-GOING OPERATIONAL OF INSURANCE BROKER LICENSE
- Have a Principal Representative (insurance manager) and monitoring the company’s compliance with the Labuan Financial Services and Securities Act, 2010 and related regulations.
- Maintain liaison with the CP Trust (company secretary) on the company to facilitate company’s compliances with Labuan FSA, rules and regulations and other related authorities such as tax, auditor, etc
- Liaison with the Labuan Financial Services Authority (Labuan FSA) for the latest updates, reporting, rulings or approvals are required including payment of license fee.
- Record-keeping of the books of accounts and correspondences relating to the business of the Company.
- Record-keeping of inward and outward correspondence records and forwarding documents as and when required
- Record-keeping of policy contracts, commission statements, statement of accounts, debit notes, credit notes, and correspondences.
- Record-keeping of all financial records and statutory records/documents for the auditor to audit the accounts.
Annual Fee for Labuan Insurance Broker:
The initial license fee is payable to Labuan FSA upon approval of the license may not be of the full year. Thereafter, the yearly license fee is RM 20,000 will be payable by 15th Jan, in addition to annual maintenance fees of the company payable to company secretary.
CP TRUST one-stop license application service level for Labuan Insurance Broker License is as follows:
* Consultation of your eligibility and procedures based on your profile
* Profiling, due diligence and guidance on documents preparation
* Preparation of Business Plan, Financial Forecast, AMLAH and KYC frameworks
* Submission and supervision of application approving process
* Act as your liaison and contact point with Labuan FSA for all correspondence and arrange an interview (if any)
Feel free to call us at +603-2161 0354 for an appointment if you decide to start your Labuan insurance broker business for the personal meeting. Alternatively, email us if you are interested to find out more about Labuan Insurance Broker License application and your eligibility. We “simplify the complexities” of your investment in Labuan.