The new approach is effective from 1 January 2009, although insurers who have
the capacity to adopt the framework earlier can migrate to it in 2008.
Lloyd’s underwriters are not licensed insurers in Malaysia, so this change will not
have a direct impact on them. Furthermore, Lloyd’s operation in Labuan is a
reinsurance service company, so the new requirements do not apply to it either.
Nevertheless, the new system will affect Lloyd’s underwriters who reinsure
Malaysian insurers and reinsurers. The new framework includes an assessment of
reinsurance, and Malaysian insurers can incur capital loadings if they reinsure with
a reinsurer (wherever it is based) that does not have a security rating of A or above
and a parental guarantee.
Lloyd’s International Market Access is assessing this provision and will provide
further details in due course.
