Who regulates car insurance in Malaysia?
Bank Negara Malaysia (BNM) regulates insurance companies, takaful operators and approved financial intermediaries in Malaysia. However, the law requiring every vehicle to have insurance comes from the Road Transport Act 1987, not BNM.
- BNM regulates providers. It licenses and supervises insurance companies and takaful operators.
- Different laws apply. The FSA 2013 covers conventional insurance, while the IFSA 2013 covers Islamic financial services.
- PIAM and MTA are not regulators. They represent their respective insurance and takaful industries.
- Insurance is compulsory. The Road Transport Act 1987 requires vehicles to have third-party insurance before being used on the road.
- Consumers have protection. You can seek help through your insurer, FMOS, BNMLINK and PIDM.
How BNM regulates insurers
The laws behind BNM's role
- In force since 30 June 2013. The Financial Services Act (FSA) and Islamic Financial Services Act (IFSA) replaced the Insurance Act 1996 and Takaful Act 1984.
- FSA. Governs conventional financial services, including insurance companies.
- IFSA. Governs Islamic financial services, including takaful operators.
- Their purpose. Maintain financial stability and protect consumers.
PIAM and MTA are not regulators
These industry associations represent insurance and takaful providers, but BNM remains the regulatory authority.
- PIAM
The General Insurance Association of Malaysia represents general insurers and reinsurers.
- MTA
The Malaysian Takaful Association represents takaful operators.
- BNM
Licenses and supervises insurance companies, takaful operators and approved financial intermediaries.
Who can sell you car insurance?
Licensed insurers and takaful operators
They issue your insurance policy or takaful certificate and handle claims according to the coverage terms. Check BNM's list of licensed financial institutions.
Approved insurance and takaful brokers
They arrange insurance or takaful coverage on behalf of customers. See BNM's list of approved brokers.
Approved financial advisers
They provide financial advice and arrange products within their approved activities. Check BNM's list of approved financial advisers.
Where BJAK fits
Bjak Sdn. Bhd. is an Approved Financial Adviser and Approved Islamic Financial Adviser under BNM. BJAK helps customers compare and purchase insurance, while the selected insurer or takaful operator issues the policy or certificate. Read more about BJAK's regulatory approval.
Car insurance rules and pricing
Compulsory cover by law
Under Section 90 of the Road Transport Act 1987, vehicles must have insurance covering third-party bodily injury or death before being used on the road. That is the legal minimum.
The policies you can buy usually go further:
- Third-party policies. Also cover damage to other people's property.
- Comprehensive policies. Also protect your own car against covered damage and losses.
Learn more about third-party cover and comprehensive cover.
Who sets car insurance prices?
BNM regulates insurance providers but does not set every car insurance price.
Since 1 July 2017, insurers and takaful operators have set their own prices for comprehensive and third-party, fire and theft cover. Basic third-party-only cover remains subject to tariff-based rates.
Prices can therefore differ between providers. Read does Bank Negara control how much my car insurance costs?
Where can you complain about your insurer?
Your insurer first
Start with your insurer's or takaful operator's complaints unit. Keep your claim documents and correspondence as supporting evidence.
Financial Markets Ombudsman Service (FMOS)
FMOS provides free and independent dispute resolution for eligible financial complaints, including insurance and takaful disputes. Visit FMOS for its current requirements.
- Monetary limit. Generally up to RM250,000 for eligible disputes, subject to FMOS rules.
- When to refer. Within six months of receiving the provider's final decision, or when the provider has not responded within 60 days.
BNMLINK
You can contact BNM if you need help with an insurance-related enquiry or want to raise concerns about a regulated financial service provider.
- Telephone: 1-300-88-5465
- Online: BNMLINK
PIDM protection
If a member insurer or takaful operator fails, PIDM's Takaful and Insurance Benefits Protection System (TIPS) protects eligible insurance and takaful benefits up to applicable limits. See PIDM's Takaful and Insurance Benefits Protection System.
- Automatic protection. No registration or additional payment is required.
- Eligible benefits. Protection depends on the type of benefit and applicable limits.
- Member providers. The system covers eligible policies and certificates issued by PIDM member institutions.
Frequently asked questions
Bank Negara Malaysia (BNM) licenses and supervises insurance companies and takaful operators under the FSA 2013 and IFSA 2013.
No. PIAM is an industry association representing general insurers and reinsurers. BNM is the regulatory authority.
Yes. The Road Transport Act 1987 requires vehicles to have valid insurance covering third-party risks before being used on the road.
Start with your insurer's complaints unit. If you are not satisfied, you can refer eligible disputes to FMOS or contact BNM through BNMLINK.
If your insurer is a PIDM member, eligible insurance benefits are protected under TIPS, subject to applicable limits and conditions.
Buy from a regulated provider
Choose a licensed insurer, takaful operator or approved intermediary when arranging your car insurance. Compare coverage and policy terms before making a decision.
- Last reviewed:
- 4 Nov 2026
- Reviewed by:
- Compliance
- Next review:
- 1 Jan 2027