BNM Policy Document on Trade Credit Insurance and Trade Credit Takaful
BNM published a policy document sets out requirements on the offering of trade credit insurance and trade credit takaful by licensed insurers and takaful operators. The policy document comes into effect on May 03, 2019. The requirements for the recognition of trade credit insurance and trade credit takaful as credit risk mitigation are also outlined under the capital adequacy frameworks for Basel II (risk-weighted assets or RWAs) and Islamic banks (RWAs), respectively. Therefore, BNM also published updated documents on Capital Adequacy Framework (Basel II – risk-weighted assets) and Capital Adequacy Framework for Islamic banks (risk-weighted assets).
The policy document on trade credit insurance and trade credit takaful sets out the approval process and requirements on the offering of trade credit insurance by a licensed insurer and trade credit takaful by a licensed takaful operator. The document also sets out the treatment of trade credit insurance or trade credit takaful as credit risk mitigation (CRM) by a banking institution under the Capital Adequacy Framework applicable to it. These policy requirements seek to position insurance and takaful products to better meet the protection needs of businesses.
Related Links
- Notice
- Trade Credit Insurance and Trade Credit Takaful (PDF)
- Capital Adequacy Framework for Basel II (PDF)
- Capital Adequacy Framework for Islamic Banks (PDF)
Effective Date: May 03, 2019
Keywords: Asia Pacific, Malaysia, Banking, Insurance, Basel II, Capital Adequacy Framework, Risk-Weighted Assets, Trade Credit Insurance, Trade Credit Takaful, BNM
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Pierre-Etienne Chabanel
Brings expertise in technology and software solutions around banking regulation, whether deployed on-premises or in the cloud.
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Previous Article
FSB Publishes Update on Meeting of RCG for MENA RegionNext Article
EBA Single Rulebook Q&A: First Update for May 2019Related Articles
EBA Updates List of Validation Rules for Reporting by Banks
EBA issued a revised list of validation rules with respect to the implementing technical standards on supervisory reporting.
EBA Responds to EC Call for Advice to Strengthen AML/CFT Framework
EBA published its response to the call for advice of EC on ways to strengthen the EU legal framework on anti-money laundering and countering the financing of terrorism (AML/CFT).
NGFS Advocates Environmental Risk Analysis for Financial Sector
NGFS published a paper on the overview of environmental risk analysis by financial institutions and an occasional paper on the case studies on environmental risk analysis methodologies.
MAS Issues Guidelines to Promote Senior Management Accountability
MAS published the guidelines on individual accountability and conduct at financial institutions.
APRA Formalizes Capital Treatment and Reporting of COVID-19 Loans
APRA published final versions of the prudential standard APS 220 on credit quality and the reporting standard ARS 923.2 on repayment deferrals.
SRB Chair Discusses Path to Harmonized Liquidation Regime for Banks
SRB published two articles, with one article discussing the framework in place to safeguard financial stability amid crisis and the other article outlining the path to a harmonized and predictable liquidation regime.
FSB Workshop Discusses Preliminary Findings of Too-Big-To-Fail Reforms
FSB hosted a virtual workshop as part of the consultation process for its evaluation of the too-big-to-fail reforms.
ECB Updates List of Supervised Entities in EU in September 2020
ECB updated the list of supervised entities in EU, with the number of significant supervised entities being 115.
OSFI Identifies Focus Areas to Strengthen Third-Party Risk Management
OSFI published the key findings of a study on third-party risk management.
FSB Extends Implementation Timeline for Framework on SFTs
FSB is extending the implementation timeline, by one year, for the minimum haircut standards for non-centrally cleared securities financing transactions or SFTs.
