Malaysia may give insurers more time to sell stakes

KUALA LUMPUR: Malaysia’s central bank is considering granting extensions to some foreign insurers to give them more time to trim stakes in their local ventures, people with knowledge of the matter said.

Foreign insurers are expected to be given additional time to comply with the ownership limit as long as they submit plans to show they have made progress in their divestment plans, said the people, who asked not to be identified as the process is private.

The central bank has been urging overseas insurers to reduce their holdings in Malaysian units to no more than 70% as it more strictly enforces ownership limits.

The regulator earlier gave these firms until June 30 to cut their stakes, people familiar with the matter said last year.

Bank Negara Malaysia will keep engaging insurers on their plans, the central bank said in an emailed response to Bloomberg queries yesterday.

Incoming governor Datuk Nor Shamsiah Mohd Yunus, who will be taking office on July 1, will be briefed on the foreign insurers’ divestment plans and their current progress, the statement shows.

Prudential Plc filed for a potential listing of its Malaysian unit last month as the insur- er explores options to reduce its stake in the business, people familiar said this week.

The UK insurer hasn’t decided whether to proceed with the listing, and it’s still considering other alternatives like finding a buyer for a minority stake in the business, they said.

Zurich Insurance Group AG is working with advisers to trim its stake in its Malaysian life insurance unit, people familiar said in April. Singapore’s Great Eastern Holdings Ltd and Japan’s Tokio Marine Holdings Inc were also among those weighing deals to cut local stakes, people familiar said last year.