In this regard, Perbadanan Insurans Deposit Malaysia (PIDM) will bring forward legislation to enable the Government to increase the deposit insurance limit to RM250,000, effective 1 January, 2011. The plan is for this legislation package to be tabled in Parliament, for debate and enactment before the end of this year.
PIDM will also develop legislation to introduce an explicit Insurance Compensation Scheme (ICS) for insurance and takaful policyholders. The Government’s intention is to ensure that policy holders of insurance and takaful products will also enjoy a similar level of consumer protection provided by PIDM for depositors in the commercial banks and Islamic banks.
These enhanced consumer protection initiatives demonstrate the Government’s continued commitment to enhance financial consumer protection for Malaysians and to promote continued public confidence in the financial system.
Since the temporary government deposit guarantee will lapse as scheduled at the end of this year, the enhanced protection package will continue to provide increased protection to depositors. With this new limit, 99% of depositors will be protected in full.
On the establishment of an explicit ICS to be administered by PIDM, it would level the playing field between the banking industry and the insurance industry as it would remove the competitive distortions between the two, as policyholders and depositors in both sectors would now be protected. The proposed ICS will contribute to enhancing financial consumer confidence which would in turn promote consumer demand for insurance and takaful products.
PIDM will conduct a consultation process with stakeholders on the key design features of the proposed insurance compensation scheme before bringing forward its recommendations to the Government.
PIDM protects your deposits in the bank as well as your takaful and insurance benefits in the unlikely event of a failure of a member bank or a takaful operator / insurance company.