Labuan Reinsurance Business

Labuan reinsurance business means a business whereby the reinsurer assumes a part of the liability under an original contract of insurance of another insurer or reinsurer. A Labuan reinsurer may either be conducting general or life reinsurance business.

 

Licensing and Operational Requirements

  1. Applicant must maintain a minimum paid up capital or working fund with a bank in Labuan; amounting to RM10.0 million equivalents in any foreign currency.
  2. Applicant must be a member of Labuan International Insurance Association.
  3. Applicant must provide a Letter of guarantee or undertaking from the parent company to Labuan FSA
  4. Applicant for licence to carry on reinsurance business in Labuan must ensure the following:
    i)  Establish an operational management office in Labuan managed by a management team that has an adequate knowledge and expertise in insurance business; or
    ii)  Appoint a licensed Labuan underwriting manager.
  5. Appointment of any person in control, director, or Principal Officer (PO) of a Labuan reinsurer must obtain prior approval from Labuan FSA. Notwithstanding, Labuan reinsurers that are established as a branch are not required to obtain approval on the appointment of their directors.
  6. The person in control, director and PO of a Labuan reinsurer must be of fit and proper persons and shall not be subject of any adverse report from any reliable sources.

 

Fees

All licensees are required to pay to Labuan FSA annual licence fees on or before 15 January of each year.

Type of Fees

Amount

Annual Fee

RM50,000

USD15,000

PCC Structure

Amount

Core

RM30,000

USD9,500

Each cell

RM10,000

USD3,000
 

 

 

Governing Legislation

The Labuan reinsurance activities are governed by the following Labuan laws:-

Labuan Financial Services and Securities Act 2010
Labuan Companies Act 1990
Labuan Business Activity Tax Act 1990

For a complete list of all Labuan laws, please click here.

 

Related Guidelines and Circulars for Labuan Reinsurers

Guidelines on Market Conduct for Labuan Insurance and Insurance Related Companies
Prudential Framework of Corporate Governance for Insurance and Insurance Related Companies
Guidelines on Minimum Audit Standards for Internal Auditors of Labuan Insurance and Insurance Related Companies
Guidelines on Fit and Proper Person

For a complete list of the related guidelines and circulars for Labuan life insurers, please click here.