Insurance Companies
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ABOUT INSURANCE .....
gives you a quick guide to the history, nature, legislation, functions and organisations of insurance in Malaysia
Insurance companies

There are two methods of classifying insurance companies, i.e.
  1. on the nature of the business transacted - Insurance companies in Malaysia are either Life Insurance Companies or General Insurance Companies. Life Insurance Companies transact all types of policies covering all aspects of life, personal accident and, to a minor extent, health insurance. General Insurance Companies, on the other hand, deal with all non-life insurances such as fire protection policies, theft protection policies, motor insurance policies, etc. Some companies transact both Life and General insurance business. Such companies are called Composite Companies.
  2. on the nature of the ownership of the company - The insurance companies are generally owned by shareholders who contribute to the share capital of the company by purchasing the shares of the company. Such companies are called Proprietary Companies. The proprietary companies are limited liability companies where the liability of the shareholders is limited to the amount of shares they purchased. Sometimes the companies are owned solely by the policyholders and there are no shareholders. Such companies are call Mutual Companies.

Establishing an Insurance Company

As stated in the Insurance Act, 1963, insurance business in Malaysia can be carried out only:-

  1. "by a company as defined in the Companies Act 1965 or a company incorporated outside Malaysia which has an established place of business in Malaysia;
  2. by a society registered under the Co-operative Societies Ordinance; or
  3. by an unincorporated company established in the United Kingdom before the year 1862 which has been carrying on business as insurer in Malaysia since or before 21 January 1963 and has an established place of business in Malaysia."
 

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