Section 40

the former member institution shall not assume or use the words “deposit insurance” or “takaful benefit protection” or

“takaful benefit compensation” or “insurance benefit protection” or “insurance benefit compensation”, or any derivative or variation of those words in any language or any other words in any language that are capable of being construed to mean or imply that the institution is a member institution;

in the case of a former deposit-taking member, deposits outstanding on the day the cancellation or termination of membership takes effect, less any withdrawals from those deposits, continue to be insured for a period of two years from the effective date of cancellation or termination or until fully withdrawn, whichever is earlier;

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in the case of a former insurer member, protected benefits on the day the cancellation or termination of membership takes effects, less any payments made on account of the benefits, shall continue to be protected after the effective date of cancellation or termination until fulfilment of all the obligations of the former insurer member in respect of the takaful or insurance benefits;

the former member institution shall not be considered to be a member institution by reason only that its liabilities in respect of deposits or takaful or insurance benefits continue to be insured or protected under this Act despite the cancellation or termination of its membership; and

the former member institution shall not be relieved from its obligations or liabilities to the Corporation that have accrued before the cancellation or termination of its membership.

Where the membership of a former deposit-taking member has been terminated under section 39, the institution shall not, as from the effective date of the termination, solicit or take any further deposits.

Where the membership of a former insurer member has been terminated under section 39, the institution shall not, as from the effective date of termination, offer or issue any further takaful certificates or insurance policies or renew any takaful certificates or insurance policies.

For the purposes of paragraph (1)(b) or (c), a cancellation or termination of membership shall not affect the obligation, right and ability of the Corporation to make a payment under Chapter 3 of

Part IV or Chapter 3 of Part V.

Where the membership of a member institution has been cancelled or terminated—

Where a former deposit-taking member is obligated to repay to a person any monies that were received or held by it while it was a member institution, such monies shall not constitute a deposit or part of a deposit for the purposes of deposit insurance with the Corporation if the date on which the person acquired his interest in the monies is a date subsequent to the date on which the cancellation or termination of the membership of the former member institution took effect as specified by the Corporation.

Where a former insurer member is liable to any person for a takaful or insurance benefit and that liability was incurred while it was a member institution, such takaful or insurance benefit shall not constitute a protected benefit if the date on which the person acquired his interest in the benefit is a date subsequent to the date on which the cancellation or termination of the membership of the former member institution took effect as specified by the Corporation.

Any former member institution that contravenes paragraph (1)(a) or paragraph (5)(a) or (b) commits an offence and shall, on conviction, be liable to a fine not exceeding five million ringgit and shall, in addition, be liable to a daily fine not exceeding fifty thousand ringgit for every day the offence continues after conviction.

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