Under the Life Insurance and Family Takaful Framework, wider channels will also be developed for the provision of life insurance and family takaful products to the public.
"The concept paper aims to seek feedback from members of the public, industry players, intermediaries and related stakeholders on proposals to further develop the life insurance and family takaful industry in Malaysia as envisaged in the Financial Sector Blueprint," BNM added.
BNM said the framework encapsulates initiatives to support a higher level of insurance and takaful penetration in line with Malaysia's transition to a high-income economy.
At the same time, consumers' interest will be further promoted through the preservation of policyholders' value, the intensification of consumer education efforts, higher quality of services provided by intermediaries and enhanced disclosure standards to promote greater consumer empowerment.
"The framework provides for the partial liberalisation of the commission, management expenses and agency related expenses limits to allow competitive forces to work more effectively, while strengthening incentives for product innovation and high standards of service provided by insurance and takaful intermediaries.
"Consumers' interests will continue to be preserved through important safeguards that will be implemented under the framework, specifically wit the introduction of the minimum allocation rate for investment-linked products that will ensure a specific proportion of premiums paid by policyholders and participants will be allocated to the their unit fund for investment purposes," said BNM.
This includes improved disclosures to facilitate comparisons by consumers between products and to help consumers better understand the financial implications of purchasing an insurance or takaful product.
On the development of a wider choice of delivery channels, BNM said this will be achieved through the rationalisation of incentive structures between channels, while providing options for consumers to purchase pure protection products (term cover, medical and health and critical illness) through cost efficient direct channels, including over-the-counter and online channels.
"In addition, the minimum financial and qualification requirements for financial advisers will be reviewed to deepen the pool of financial advisers in the insurance and takaful industry," it explained.
Limits on financing facilities provided to agents by insurers and takaful operators will be removed to allow greater flexibility for insurance and takaful firms to support the professional development of agents, in particular new agents.
This will be accompanied by requirements for insurers and takaful operators to proactively uplift the professional conduct of intermediaries through an increased emphasis on product suitability, quality of advice and service, and productivity, in the design and implementation of intermediary remuneration schemes.
To facilitate consumers in making informed decisions, a customised online product aggregator will be introduced to assist comparison of pure protection products from various providers.
The online insurance account will also be introduced to provide consumers with easy access to the status of their policies.
The concept paper can be downloaded from BNM's website at www.bnm.gov.my. The deadline for submission of feedback and comments is by Dec 9, 2013.
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