Malaysia Deposit Insurance Corporation (Amendment) Act 2022

This Act comes into operation on a date to be appointed by the Minister by notification in the Gazette and the Minister may appoint different dates for the coming into operation of different provisions of this Act.

by substituting for the words “Companies Act 1965”

wherever appearing including in the shoulder note the words “Companies Act 2016”; and

by substituting for the words “provisional liquidator”

wherever appearing the words “interim liquidator”.

Amendment of section 2

by inserting before the definition of “Islamic bank”

the following definition:

‘ “investment account” has the same meaning as defined under subsection 2(1) of the Islamic Financial

Services Act 2013;’;

in the definition of “related”, by substituting for the words

“section 6” the words “section 7”;

by substituting for the definition of “Islamic deposit”

the following definition:

‘ “Islamic deposit” has the same meaning as defined under subsection 2(1) of the Islamic Financial Services

Act 2013;’;

by substituting for the definition of “conventional deposit”

the following definition:

‘ “conventional deposit” has the same meaning assigned to the definition of “deposit” under subsection 2(1) of the Financial Services Act 2013

and does not include an Islamic deposit;’;

in the national language text, in the definition of

“manfaat insurans”, by inserting after the word “kejadian”

the words “atau lebih”;

by substituting for the definition of “Registrar of Companies”

the following definition:

‘ “Registrar of Companies” means the Registrar designated under subsection 20 a(1) of the

Companies Commision of Malaysia Act 2001 [Act 614];’;

Malaysia Deposit Insurance Corporation (Amendment)

in the definition of “corporation”, by substituting for the words “section 4” the words “section 3”; and

in the definition of “insurance company”, by substituting for the words “and Danajamin Nasional Berhad”

the words “, Danajamin Nasional Berhad and any person carrying on solely financial guarantee insurance business or credit guarantee insurance business”.

diversity of the board of directors in terms of interest, knowledge, skill and experience;

the person’s probity and standing; and

the person’s knowledge, skill and experience in banking, insurance, economics or in any other relevant discipline, which will enable him to discharge his functions as a director.

Each director referred to in paragraph (2)(b) or (c)

may assign in writing a position within his organization as the alternate director who shall attend meetings of the

Board in place of the director when the director is for any reason unable to attend.

For the avoidance of doubt, for the purposes of subsection 15(9) of the Central Bank of Malaysia

Act 2009 [Act 701], the position of the Deputy Governor of

Bank Negara Malaysia may be assigned as the alternate director under subsection (2b).

When attending meetings of the Board in place of the directors referred to in paragraph (2)(b) or (c), the alternate directors shall for all purposes be deemed to be directors of the Board.”.

in subparagraph (1)(a)(i), by inserting after the words

“primarily liable” the words “and which meets the criteria as specified by the Corporation”;

in subsubparagraph (1)(a)(E), by deleting the word “and”

at the end of the subsubparagraph;

by inserting after subsubparagraph (1)(a)(E) the following subsubparagraph:

“(EA)  an investment linked to derivatives; and”; and

by deleting subsection (2).

“total insured deposits” means the total deposits separately insured as Islamic deposits or conventional deposits under section 42, calculated in such manner as specified by the Corporation;

“transferring party” means a person, including a deposit-taking member, which transfers its business under a business transfer scheme;

“business transfer scheme” refers to a scheme of transfer for the whole or material part of the deposit-taking business; and

“transfer date” means the date on which a business transfer scheme takes effect as specified by the Corporation.

For the purposes of paragraph (1)(c), the Corporation may specify what constitutes a material part of the deposit-taking business.”.

the first premium to be paid by a new deposit-taking member shall be calculated on the basis as may be prescribed by the Minister;

the first premiums of Islamic and conventional deposits shall be calculated separately; and

the applicable premium rates for each new deposit-taking member shall be based on such criteria as may be prescribed in the regulations.

The first premium payable by a new deposit-taking member shall be based on returns to be certified by the chief executive of the new deposit-taking member and submitted in such form and within such period as the Corporation may require.”.

Amendment of section 48

by substituting for the word “Every” the words

“Subject to paragraph 47(3)(a) and subsection 49a(1), every”; and

in the national language text, by substituting for the words “menjadi anggota penerima deposit” the words

“menjadi institusi anggota”.

Amendment of section 49

by substituting for the words “The annual premiums”

the words “Subject to section 49a, the annual premiums”;

and

Malaysia Deposit Insurance Corporation (Amendment)

by substituting for paragraph (a) the following paragraph:

“(a) the annual premium to be paid by a deposit-taking member shall be calculated on the basis as may be prescribed by the Minister;”.

the transferee member shall pay annual premium for that assessment year calculated on the basis as may be prescribed by the Minister;

the annual premium payable under paragraph (a)

shall be—

based on the rates and subject to the minimum amounts to be prescribed by the Minister on the recommendation of the Corporation; and

the transferring parties shall not be required to pay annual premium under section 48 for that assessment year; and

for the avoidance of doubt, where the transferring parties are deposit-taking members which have been approved under paragraph 15(1)(a) of the

Financial Services Act 2013 to carry on Islamic banking business and their Islamic banking business is transferred under a business transfer scheme to a transferee member before the annual due date referred to in subsection 48(1) in an assessment year, no annual premium shall be required to be paid by the deposit-taking members for that assessment year in respect of the Islamic banking business.

Where the business of one or more non-deposit taking members is transferred under a business transfer scheme to a deposit-taking member (referred to in this subsection as the “transferee member”) after the annual due date referred to in subsection 48(1) in an assessment year—

For the avoidance of doubt, the rates prescribed under subsections (1) and (2) and the minimum amounts prescribed under subsections (1) and (2) may relate to categories in which deposit-taking members are classified under premium regulations and different rates and minimum amounts may apply to different categories.

Any deposit-taking member which contravenes subsection (1) or (2) commits an offence and shall, on conviction, be liable to a fine not exceeding three million ringgit and shall, in addition, be liable to a daily fine not exceeding thirty thousand ringgit for every day the offence continues after conviction.”.

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Amendment of section 54

by renumbering the existing provision as subsection (1);

in subsection (1) as renumbered, by substituting for the word “Any” the words “Subject to subsection (2), any”;

and

by inserting after subsection (1) as renumbered the following subsection:

“(2)  The Minister may, on the recommendation of the Corporation, by order published in the Gazette—

provide for the partial or total reduction, waiver, refund or rebate of the amount of any premium or premium surcharge to such deposit-taking member; and

specify any condition in respect of paragraph (a).”.

Amendment of section 63

in the shoulder note, by substituting for the words

“index-linked deposit” the words “investments linked to derivatives previously specified as insured by Corporation”;

by substituting for the words “a deposit held by a deposit-taking member” the words “investments linked to derivatives held by a deposit-taking member and previously specified as insured by the Corporation”; and

by substituting for the words “in respect of the deposit”

the words “in respect of the investments linked to derivatives”.

“transferring party” means a person, including an insurer member, which transfers its business under a business transfer scheme;

“business transfer scheme” refers to a scheme of transfer for the whole or material part of the business of family takaful or life insurance or the business of general takaful or general insurance; and

“transfer date” means the date on which a business transfer scheme takes effect as specified by the Corporation.

For the purposes of paragraph (1)(b), the Corporation may specify what constitutes a material part of the business of family takaful or life insurance or the business of general takaful or general insurance.”.

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the first levy to be paid by a new insurer member shall be calculated on the basis as may be prescribed by the Minister;

the first levies in respect of the business of family takaful, general takaful, life insurance and general insurance shall be calculated separately; and

the applicable levy rates for each new insurer member shall be based on such criteria as may be prescribed in the regulations.

The first levy payable by a new insurer member shall be based on returns to be certified by the chief executive of the new insurer member and submitted in such form and within such period as the Corporation may require.”.

Malaysia Deposit Insurance Corporation (Amendment)

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Amendment of section 72

in subsection (1)—

by substituting for the word “Every” the words “Subject to paragraph 71(3)(a) and subsection 73a(1), every”; and

in the national language text, in subsection (3), by inserting after the words “anggota penanggung insurans”

the words “bagi suatu tahun taksiran”.

Amendment of section 73

in subsection (1)—

by substituting for the words “The annual levies”

the words “Subject to section 73a, the annual levies”;

by deleting subsection (2).

the transferee member shall pay annual levy for that assessment year calculated on the basis as may be prescribed by the Minister;

the annual levy payable under paragraph (a)

shall be—

based on the rates and subject to the minimum amounts to be prescribed by the Minister on the recommendation of the Corporation;

and

the transferring parties shall not be required to pay annual levy under section 72 for that assessment year.

Where the business of one or more non-insurer members is transferred under a business transfer scheme to an insurer member (referred to in this subsection as the

“transferee member”) after the annual due date referred to in subsection 72(1) in an assessment year—

For the avoidance of doubt, the rates prescribed under subsections (1) and (2) and the minimum amounts prescribed under subsections (1) and (2) may relate to categories in which insurer members are classified under levy regulations and different rates and minimum amounts may apply to different categories.

Any insurer member which contravenes subsection (1)

or (2) commits an offence and shall, on conviction, be liable to a fine not exceeding three million ringgit and shall, in addition, be liable to a daily fine not exceeding thirty thousand ringgit for every day the offence continues after conviction.”.

Amendment of section 78

by renumbering the existing provision as subsection (1);

in subsection (1) as renumbered, by substituting for the word “Any” the words “Subject to subsection (2), any”; and

by inserting after subsection (1) as renumbered the following subsection:

“(2)  The Minister may, on the recommendation of the Corporation, by order published in the Gazette—

provide for the partial or total reduction, waiver, refund or rebate of the amount of any levy or levy surcharge to such insurer member; and

specify any condition in respect of paragraph (a).”.

by substituting for the words “subsection 64(1)” the words

“subsection 116(1)”;

in paragraph (a), by substituting for the words

“section 64” the words “section 116”; and

in paragraph (b), by substituting for the words

“subsections 64(9) and (10)” the words “section 122 and subsections 116(9), 116(10) and 116(12)”.

in subsection (1), by substituting for the words

“section 228” the words “subsection 478(1)”; and

in subsection (3), by substituting for the words

“subsection 232(3)” the words “subsection 479(2)”.

in paragraph (2)(a), by inserting after the words

“its Islamic banking business” the words “including the

Islamic banking funds or any accounts established under subsection 15(3) of the Financial Services Act 2013, subject to paragraph (aa)”;

in subparagraph (2)(a)(ii)—

by substituting for the words “subsection 292(1)”

the words “subsection 527(1)”; and

by inserting after paragraph (2)(a), the following paragraph:

“(aa) notwithstanding subsection 527(1) of the

Companies Act 2016, but subject to any costs and expenses of the winding up set out in paragraph 527(1)(a) of the Companies Act 2016

directly incurred in realising the assets of the investment accounts and any tax set out in paragraph 527(1)(f) of the Companies Act 2016

which is attributable to the investment accounts, the assets of the investment accounts managed by the deposit-taking member in Malaysia, shall be available, in the order set out as follows:

to pay outstanding costs or expenses of the investment accounts;

by deleting subsection (3).

the assets of the deposit-taking member, subject to paragraph (b) shall be available to meet all liabilities of that deposit-taking member in respect of its Islamic deposits in Malaysia in priority to all other unsecured liabilities of that deposit-taking member other than the preferential debts set out in subsection 527(1) of the Companies Act 2016 in the order set out in that subsection and the debts due and claims owing to the Government under section 10 of the Government Proceedings Act 1956

and the order of priority for payments of different categories of Islamic deposits may be prescribed by regulations made under section 209; and

notwithstanding subsection 527(1) of the

Companies Act 2016, but subject to any costs and expenses of the winding up set out in paragraph 527(1)(a) of the Companies Act 2016 directly incurred in realising the assets of the investment accounts and any tax set out in paragraph 527(1)(f) of the

Companies Act 2016 which is attributable to the investment accounts, the assets of the investment accounts managed by the deposit-taking member in

Malaysia, shall be available, in the order set out as follows:

to pay outstanding costs or expenses of the investment accounts;

in paragraph (a), by substituting for the words

“subsection 235(3)” the words “section 485”; and

in paragraph (b), by substituting for the words

“prescribed form referred to in subsection 281(1)”

the words “documents referred to in subsection 514(1)”.

in subsection (1), by substituting for the words

“paragraph 292(1)(f)” the words “paragraph 527(1)(f)”;

and

in subsection (3), by substituting for the words

“subsection 292(1)” the words “subsection 527(1)”.

Amendment of section 142b

in subsection (1), by substituting for the words

“subsection 292(1)” the words “subsection 527(1)”; and

in paragraph (2)(c), by substituting for the words

“subsection 292(1)” the words “subsection 527(1)”.

in subsection (1), by substituting for the words

“, had it been done by or against an individual, would in his bankruptcy under the law of bankruptcy be void or voidable” the words “would in the event of the affected person being wound up under the Companies Act 2016

be void or voidable”; and

in subsection (2)—

by substituting for the words “law of bankruptcy”

the words “Companies Act 2016”; and

in subparagraph 3(6)—

in subsubparagraph (a)—

b y s u b s t i t u t i n g f o r t h e w o r d s

“paragraph 6 a(9)(b)” the words

“paragraph 8(9)(b)”; and

by inserting after the word “money”

the words “or the giving of financing”; and

in subparagraph 6(2), by substituting for the words

“subsection 112a(1)” the words “subsection 359(1)”.

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in subparagraph 3(9)—

in subsubparagraph (a)—

b y s u b s t i t u t i n g f o r t h e w o r d s

“paragraph 6 a(9)(b)” the words

“paragraph 8(9)(b)”; and

by inserting after the word “money”

the words “or the giving of financing”; and

in subparagraph 7(2), by substituting for the words

“subsection 112a(1)” the words “subsection 359(1)”.

Notwithstanding subsubparagraph 41(1)(a)(EA), all investments linked to derivatives previously specified as insured by the Corporation shall continue to be insured by the Corporation until they reach maturity, are fully withdrawn or are otherwise terminated, whichever is earlier.

For the avoidance of doubt, Islamic deposits accepted by a deposit-taking member under the repealed Islamic Banking

Act 1983 [Act 276] which are deemed to be Islamic deposits under section 288 of the Islamic Financial Services Act 2013 and which have been specified as insured by the Corporation shall continue to be insured by the Corporation until they cease to be deemed as

Islamic deposits under the Islamic Financial Services Act 2013.