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Labuan FSA Issues New Guidelines on Investment Management for Labuan Insurance and Takaful Business and Revises Guidelines on Fit and Proper Person Requirements
Labuan Financial Services Authority (Labuan FSA) on 11 February 2014 issued the following two guidelines, which will come into effect on 1 January 2015:
  1. Guidelines on Investment Management for Labuan Insurance and Takaful Business (new) 
  2. Guidelines on Fit and Proper Person Requirements (revised) 

Guidelines on Investment Management for Labuan Insurance and Takaful Business

The new guidelines are aimed at promoting better governance and prudent practices of investment activities undertaken by Labuan (re)insurers and (re)takaful operators (collectively referred to as "Labuan insurers"). They are intended to ensure that the investment management framework and practices of Labuan insurers operating in both the conventional and Islamic space remain sound and effective.
In general, the guidelines require Labuan insurers to have in place a formal and written overall investment policy, an adequate investment risk management framework, and appropriate monitoring and control of the investment management function. Additionally, they clarify the relevant roles of the board of directors and senior management of Labuan insurers.

Guidelines on Fit and Proper Person Requirements

The revised guidelines seek to provide further clarity on the expectations of Labuan FSA on the suitability of relevant persons of a Labuan financial institution (LFI). Among others, the revision entails a modified scope of relevant persons and an internal fitness and propriety policy to be developed by an LFI to reflect its application of the revised guidelines' requirements.
The guidelines serve as a framework for assessing a person's capacity to act as a fit and proper person. As such, Labuan FSA expects that the relevant persons to whom these guidelines are applicable to are competent, honest, possess integrity and have sound financial standing. If the relevant person fails to satisfy Labuan FSA's expectations, it may refuse the person's application, revoke the person's authorisation or exemption or take other appropriate regulatory action, as deemed necessary.
For the comprehensive guidelines on investment management for the Labuan insurance and takaful business and fit and proper person requirements, please refer to the attachments.

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