Great Eastern denies claim of $659.76m contribution to Malaysian insurance fund

It is still in talks with Malaysian authorities for options on meeting foreign ownership rules.

Great Eastern Holdings (GEH) is currently in discussions with Malaysian authorities on the possible options for Great Eastern Life Assurance (Malaysia) Berhad (GELM) to satisfy foreign ownership requirements for insurance companies operating in Malaysia, it said.

According to an announcement, such options include GELM making a contribution to a special insurance development trust fund, which could be in the form of a B40 Health Protection Fund.

“The discussions on the options are on-going at this stage and details have yet to be finalised. Based on the options currently being considered, GEH believes there will not be a material impact on the earnings of GELM and GEH,” GEH said.

The announcement is a response to the statement of Malaysia’s finance minister Lim Guan Eng on 2 November 2018 that said GELM will contribute an initial seed funding of $659.76m (RM2b).

Previous reports have said that GEH was in talks with Malaysian banks to sell its stake in GELM following Bank Negara Malaysia’s (BNM) stricter enforcement of the 70% foreign ownership cap on insurers, which was issued back in 2009. Other insurers like Prudential Malaysia and Tokio Marine Insurance Malaysia were also exploring similar options.

However, a new Financial Times report said that BNM is now open to negotiation and could allow foreign insurers to keep full ownership of their firms.