In Malaysia, actuarial services are vital in the insurance, pensions, finance, and risk management industries. The provision of actuarial services is subject to specific regulations, licenses, and approvals to ensure professional integrity, public interest, and compliance with statutory requirements. These regulatory frameworks are enforced primarily through Bank Negara Malaysia (BNM), the Actuarial Society of Malaysia (ASM), and international actuarial bodies. This article explores the legal, professional, and regulatory requirements to provide actuarial services in Malaysia.
Understanding Actuarial Services in Malaysia
Actuarial services refer to applying mathematics, statistics, and financial theory to assess and manage risk, particularly in insurance, pension, and investment sectors. In Malaysia, actuaries are involved in:
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Pricing insurance products
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Valuation of policyholder liabilities
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Pension and employee benefit valuations
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Investment and asset-liability modeling
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Risk-based capital and solvency reporting
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Regulatory compliance under standards like IFRS 17 and MFRS 119
The provision of these services—particularly for regulated entities like insurers and takaful operators—requires appropriate licensing and approvals as stipulated by law.
Key Authorities Involved
Several authorities and professional bodies oversee actuarial licensing and practice in Malaysia:
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Bank Negara Malaysia (BNM) – Regulator for financial institutions, insurance, and takaful
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Actuarial Society of Malaysia (ASM) – National professional body for actuaries
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Malaysia Accounting Standards Board (MASB) – Sets accounting standards, including actuarial valuation requirements
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International Actuarial Bodies – SOA, IFoA, IAA for qualification and global recognition.
Licensing and Approval Requirements
1. Appointed Actuary Approval (Insurance and Takaful)
One of the most critical roles for actuaries in Malaysia is the position of Appointed Actuary under the Financial Services Act 2013 (FSA) and Islamic Financial Services Act 2013 (IFSA).
To be appointed as an Appointed Actuary for a life insurer, general insurer, or takaful operator, an actuary must:
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Be qualified under a recognized actuarial body (e.g., SOA, IFoA)
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Be a Fellow of the Actuarial Society of Malaysia (FASM)
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Have relevant experience (typically at least 5 years)
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Be approved by Bank Negara Malaysia via a formal application process
The appointed actuary is responsible for preparing key financial reports, including:
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Liability valuation
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Solvency and capital adequacy reports
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Financial Condition Reports (FCR)
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IFRS 17 actuarial input and disclosures
2. Practicing Certificate (ASM)
While the Actuarial Society of Malaysia (ASM) does not issue a license in the legal sense, it certifies actuarial professionals and maintains a registry of:
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Associates (AASM)
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Fellows (FASM)
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Practicing Actuaries
To provide statutory actuarial opinions in Malaysia, particularly in the insurance or pensions sectors, the actuary must generally be a Fellow of the ASM. The Fellow status ensures that the actuary:
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Has completed all professional exams
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Complies with Continuing Professional Development (CPD) requirements
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Abides by ASM’s Code of Conduct
3. Registration with Bank Negara Malaysia (BNM)
Actuarial firms or consulting actuaries providing services to regulated financial entities (e.g., insurers, reinsurers, takaful operators) must be recognized by BNM. While there is no public licensing registry for all actuarial firms, any actuarial consultant involved in statutory reporting (e.g., RBC reporting, IFRS 17 implementation) must be approved for that engagement.
The approval process includes:
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Submission of actuarial qualifications and credentials
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Details of relevant experience
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Independence and conflict of interest declarations
BNM may conduct regular reviews and audits on appointed actuaries and their methodologies.
4. Pension Valuation Compliance
For actuaries performing employee benefit valuations, particularly under MFRS 119 (IAS 19), no formal BNM approval is needed. However:
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The actuary must follow international accounting and actuarial standards
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Public companies and listed entities may require assurance of the actuary’s Fellow status
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Malaysian regulators or auditors may request evidence of competency, qualifications, and independence
Actuaries may need to provide valuation reports certified by licensed trustees or scheme administrators for pension schemes governed under EPF rules or private retirement schemes (PRS).
5. Foreign Actuaries and Cross-Border Services
Foreign actuaries providing services in Malaysia must:
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Be recognized by a global actuarial body (e.g., IFoA, SOA, CIA)
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Partner with a local Malaysian actuary (preferably a Fellow of the ASM)
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Obtain temporary approval from BNM if involved in statutory engagements
Cross-border work (especially IFRS 17, mergers, or risk assessments) may be accepted, provided that local regulatory requirements are met and adequate local representation or certification exists.
Penalties for Non-Compliance
Failure to obtain the necessary licenses or approvals can lead to:
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Rejection of actuarial reports by regulators or auditors
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Legal action under the Financial Services Act or Companies Act
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Penalties and fines imposed by BNM
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Damage to professional reputation and revocation of ASM membership
Hence, only qualified, approved, and licensed actuaries should offer actuarial services, particularly when engaged with regulated financial institutions.
FAQs on Actuarial Licensing in Malaysia
1. Who can be an Appointed Actuary in Malaysia?
Only an actuary who is a Fellow of ASM with at least five years of relevant experience and formal approval from Bank Negara Malaysia can be appointed as an Actuary for insurance or takaful companies.
2. Is a license from the Actuarial Society of Malaysia mandatory to provide actuarial services?
While ASM doesn’t issue licenses per se, being a Fellow (FASM) is generally required for statutory roles. Clients and regulators may not recognize actuaries without proper certification from the ASM.
3. Can foreign actuaries practice in Malaysia?
Foreign actuaries must collaborate with a qualified local actuary, especially for regulated roles. They must meet equivalent standards and may need temporary BNM approval for certain assignments.
4. Are actuarial consultants required to register their firms?
BNM must recognize firms providing actuarial services to insurers or takaful operators. Individual consultants must demonstrate qualifications, experience, and independence for each engagement.
5. Is approval needed to provide pension valuation services?
No direct licensing is required, but actuaries must comply with MFRS 119 or IAS 19 standards. Organizations typically require an actuary with a Fellow status and relevant pension experience.
Conclusion
Actuarial services in Malaysia are strictly regulated to uphold high standards of professionalism, accuracy, and ethical conduct. Whether offering insurance valuations, pension assessments, or risk analysis, actuaries must hold proper qualifications, Fellow status, and—in many cases—approval from Bank Negara Malaysia. These requirements ensure that actuarial services contribute to Malaysia’s economic sectors’ financial health, stability, and compliance. Businesses and financial institutions should always verify an actuary’s credentials and approvals before engaging their services.
