Can you provide a short history of life insurance in Malaysia?  

Records indicated that the first life insurance policy was written in 16th century England.

The insurance industry in Malaysia first started in the 18th century. The insurance industry then was based on the British system because it was introduced and managed by British trading companies and agencies. There were few locals involved due to lack of expertise.

The insurance industry really took off only in the 1950s. The market then was controlled by British and American firms. At the same time, locally incorporated companies had also started selling insurance. After independence in 1957, nationalistic policies gave much encouragement to domestic companies to improve their market share. However, this boom burst when many companies, without proper underwriting practices, went out of business leaving their policyowners holding worthless policies.

The government stepped in to remedy the situation by introducing the Insurance Act, 1963. The office of the Director General of Insurance was given the task of regulating the insurance industry. Today, the Governor of Bank Negara is also the Director General of Insurance.

There are at present two Takaful and 18 life insurers operating in Malaysia. Out of the 18 life insurers, 14 are domestic and 4 are constituted outside Malaysia.

Of the 14 domestic life insurers, two are listed on the KLSE, one of which is John Hancock Life Insurance (Malaysia) Berhad, which is sponsoring this FAQ. The third listed insurance company is a non-life insurer with a life insurance subsidiary.

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