Financial Advisers | (Update) Roles in General Insurance Business

2013 New instruction concerning the issuance of cover on behalf of insurer or takaful operator by Financial Advisers operating in Malaysia.

The following circular by Persatuan Insuran Am Malaysia (PIAM) says it all…. Financial Advisers are barred from issuing cover on behalf of any insurance company or Takaful operator as they are deemed to be independent agent representing the interest of their clients. 

The following circular says it all….

29th January 2013 | MEMBERS’ CIRCULAR NO. 11 OF 2013
The Chief Executive Officer 

Dear Sir 

FINANCIAL ADVISERS 

We refer to the above matter and append below an extract of the advise received from Bank Negara Malaysia for members’ attention:- 

 
“Please be informed that financial advisers (FAs) represent the interest of their clients and are expected to provide independent advice on insurance products to their clients. FAs’ representatives are required to meet minimum professional qualifications and most have the relevant experience to provide advice on life insurance business, but this does not apply to general insurance business.
 
In view of the above, we are of the opinion that it is inappropriate for FAs to be allowed to hold or issue cover notes on behalf of general insurers , especially as this could result in FAs being perceived to be representing the product manufacturers when they are meant to be providing independent advice to clients”. 
Members are requested to take note of the above accordingly. 

Thank you. 

Yours faithfully, 

BY ORDER OF THE MANAGEMENT COMMITTEE
 

In another words, financial advisers are not required to register as an agent of any insurance company or takaful operator and likewise not supposed to hold cover notes of insurance companies / takaful operators. 

 

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