The short version
Six paragraphs of this policy document shape what an approved broker can say about itself and what it owes a client in public. Paragraph 13.1 requires options from at least three different insurers or takaful operators for a first-time customer, per class of business, with the most suitable recommended. 13.3 covers what happens when three suitable options do not exist. 10.1 sets a professional indemnity floor of RM1,000,000 net of deductibles for any one claim. 11.1 requires a board of at least three directors and 11.2 adds an independent director — that one from 1 January 2027. 16.1 requires the latest audited accounts to be publicly available, at every branch or on the website. None of this is obscure, and none of it is optional. What is striking is how little of it appears on the sector's websites, where it would do the most good.
What the document is, and who it binds
Bank Negara Malaysia issued the Policy Document on Prudent and Professional Conduct of Insurance and Takaful Brokers on 29 August 2025. It came into effect on 1 January 2026. One provision, paragraph 11.2, was deferred by a year and takes effect on 1 January 2027.
It binds approved brokers: an approved insurance broker under the Financial Services Act 2013, and an approved takaful broker under the Islamic Financial Services Act 2013. If your firm appears on Bank Negara's register of approved insurance and takaful brokers, it applies to you in full. Brokers licensed instead under the Labuan regime sit under a separate framework administered by Labuan FSA and are outside this document entirely.
The document ranges wide — capital funds, indemnity cover, board and senior management, auditors, business conduct, staff professionalism, remuneration, notifications to the Bank, and the publication of financial statements. Much of it is internal and prudential, and will never be visible to a client. The paragraphs below are the ones that are not.
A note on paragraph numbers. Several published summaries of this document, including ones we relied on ourselves, cite these requirements under the wrong paragraph numbers — professional indemnity as paragraph 9, the board as paragraph 10. Every number on this page was read from the policy document itself on 26 July 2026. If a number matters to a decision you are making, read it in the document rather than in anyone's summary, including this one.
The paragraphs a client could see
Quoted from the document. Each of these describes something a broker does that a prospective client has no way of knowing unless they are told.
Paragraph 13.1 — Product options for first-time customers
"An approved broker shall provide suitable product options to meet the needs of first-time customers. These options shall be sourced from at least three (3) different licensed insurers or licensed takaful operators for each class of insurance or takaful business and the most suitable option shall be recommended."Policy Document on Prudent and Professional Conduct of Insurance and Takaful Brokers, paragraph 13.1. Read from the policy document itself, 26 July 2026.
Read the scope carefully before repeating it. It applies to first-time customers, and it operates per class of insurance or takaful business — not three quotes for a relationship, but three sources for each class. And it does not stop at comparison: the most suitable option must actually be recommended.
Paragraph 13.3 — When three suitable options do not exist
"In the event that there is less than three (3) or no suitable product options that meet customers' needs, an approved broker shall inform and provide explanation the limitations to the customers accordingly. Before proceeding with any comparisons and recommendations based on the limited product options, the approved broker shall obtain the customer's consent. The approved broker is prohibited from recommending any other insurance or takaful products that is not in the best interest of the customer e.g., for the sole purpose of securing a sale."Same policy document, paragraph 13.3. Read from the policy document itself, 26 July 2026.
13.3 is why 13.1 should never be repeated on its own. A specialist line with two viable markets is not a failure of the rule, it is the situation the rule anticipates. What the broker owes in that case is disclosure, an explanation, and consent before proceeding — plus a standing prohibition on recommending something against the customer's interest to close a sale.
Paragraph 10.1 — Professional indemnity
"An approved broker shall maintain a PI insurance or takaful cover with a minimum limit of indemnity of at least RM1,000,000 net of deductibles for any one claim at all times."Same policy document, paragraph 10.1. Read from the policy document itself, 26 July 2026.
Paragraphs 11.1 and 11.2 — The board
"11.1 The Board shall be of a size that is commensurate with the size and risk of an approved broker's business, with a minimum of three (3) directors.Same policy document, paragraphs 11.1 and 11.2. Read from the policy document itself, 26 July 2026. Paragraph 11.2 takes effect 1 January 2027; that commencement date is reported by Skrine and Rahmat Lim & Partners rather than read from the document's own effective-date clause.
11.2 In relation to paragraph 11.1, the Board shall have at least one (1) independent director at all times."
Paragraph 16.1 is the sixth, and it has its own page on this site because it is the one that speaks directly to what a website is for: the latest audited financial statements must be publicly available at no cost, at every branch in Malaysia or on the broker's website. It is an either/or, and a broker who keeps copies at the counter is fully compliant with nothing online. The full reading of paragraph 16.1 is here, including what we found when we checked eight broker websites.
Six things you already do that your website probably doesn't say
Each of these is an obligation you already meet. Stated plainly in public, each one answers a question a corporate buyer is holding and rarely asks out loud.
What none of this means
This page will be read by people looking for a reason to be worried. There isn't one here, and overstating these rules would be its own kind of error.
Three questions for whoever writes your website
Not compliance questions. Positioning ones, which is where these paragraphs are actually being wasted.
None of this requires a rebuild. It requires knowing which of your obligations are also, read the right way round, the strongest things you could say about yourself.
Questions brokers are asking
How many insurers must a Malaysian broker get quotes from?
For a first-time customer, paragraph 13.1 of Bank Negara Malaysia's Policy Document on Prudent and Professional Conduct of Insurance and Takaful Brokers requires an approved broker to source suitable product options from at least three different licensed insurers or licensed takaful operators, for each class of insurance or takaful business, and to recommend the most suitable option. Paragraph 13.3 covers the case where fewer than three suitable options exist: the broker must inform and explain the limitation to the customer, and obtain the customer's consent before comparing and recommending on the narrower set.
What professional indemnity cover must an approved broker carry?
Paragraph 10.1 requires an approved broker to maintain professional indemnity insurance or takaful cover with a minimum limit of indemnity of at least RM1,000,000 net of deductibles for any one claim, at all times. That is a floor, not a typical figure. Many brokers carry considerably more, and the level appropriate to a firm depends on the volume, nature and risk of its business.
When must an insurance broker appoint an independent director?
Paragraph 11.2 requires the board of an approved broker to have at least one independent director at all times. It is the one provision of the policy document that was deferred: it takes effect on 1 January 2027, a year after the rest of the document. Paragraph 11.1 separately requires a board of at least three directors, sized commensurately with the size and risk of the business, and that has applied since 1 January 2026.
When did the 2026 BNM broker policy document come into force?
The Policy Document on Prudent and Professional Conduct of Insurance and Takaful Brokers was issued on 29 August 2025 and came into effect on 1 January 2026, with the single exception of paragraph 11.2 on independent directors, which takes effect on 1 January 2027.
Does the BNM broker policy document apply to Labuan brokers?
No. The policy document applies to approved brokers, meaning an approved insurance broker under the Financial Services Act 2013 and an approved takaful broker under the Islamic Financial Services Act 2013. Brokers licensed instead under the Labuan regime sit under a separate framework administered by Labuan FSA and are outside this document.
Sources
Every paragraph quoted above was read from the policy document itself. Read it yourself if any of it bears on a decision.
- Bank Negara Malaysia, Policy Document on Prudent and Professional Conduct of Insurance and Takaful Brokers — the instrument, and the source of every quotation on this page. Issued 29 August 2025, effective 1 January 2026. Read the policy document (PDF, bnm.gov.my). Paragraphs 10.1, 11.1, 11.2, 13.1 and 13.3 read directly from this document on 26 July 2026; paragraph 16.1 on 24 July 2026.
- Bank Negara Malaysia, register of approved insurance and takaful brokers — the current list of firms the policy document applies to. View the register (bnm.gov.my). Checked 24 July 2026.
- Skrine, "Bank Negara issues Policy Document on Prudent and Professional Conduct of Insurance and Takaful Brokers" — legal alert, September 2025. Used for the issue and commencement dates and the deferral of paragraph 11.2 to 1 January 2027. Read the alert (skrine.com). Accessed 26 July 2026.
- Rahmat Lim & Partners, alert on the same policy document — used to corroborate the dates and scope independently. Read the alert (rahmatlim.com). Accessed 26 July 2026.
- Related reading on this site: the full reading of paragraph 16.1, including our own check of eight broker websites with its method and limits; the credibility checklist, on what a regulated-sector site needs to show before a buyer takes it seriously.
A note on what this is
This is a website-practice resource, not legal or compliance advice. We build and maintain websites for regulated sectors; we do not advise on prudential compliance, and we are not your compliance function. The authority is the policy document itself, quoted above and linked in full — and where a published summary and the document disagree, the document governs. If a question turns on interpretation, put it to Bank Negara Malaysia or your own compliance counsel rather than relying on our reading. Everything here reflects the position as at 26 July 2026 and has not been re-verified since; policy documents are amended.