MALAYSIA DEPOSIT INSURANCE CORPORATION ACT 2011

LAWS OF MALAYSIA ONLINE VERSION OF UPDATED TEXT OF REPRINT Act 720 MALAYSIA DEPOSIT INSURANCE CORPORATION ACT 2011 As at 21 July 2023 This text is ONLY AN UPDATED TEXT of the Malaysia Deposit Insurance Corporation Act 2011 by the Attorney General’s Chambers. Unless and until reprinted pursuant to the powers of the Commissioner of Law Revision under subsection 14(1) of the Revision of Laws Act 1968 [Act 1], this text is NOT AN AUTHENTIC TEXT. 2 MALAYSIA DEPOSIT INSURANCE CORPORATION ACT 2011 … … … ... 24 January 2011 Date of publication in the Gazette … … … ... 27 January 2011 Date of Royal Assent Latest amendment made by Act A1647 which came into operation on … … … ... 22 February 2022; except sections 12, 13, 14, 15, 16, 17, 22, 23, 24, 25, 26 and 27, 21 July 2023 PREVIOUS REPRINTS First Reprint … … … … … 2016 3 LAWS OF MALAYSIA Act 720 MALAYSIA DEPOSIT INSURANCE CORPORATION ACT 2011 ARRANGEMENT OF SECTIONS PART I PRELIMINARY Section 1. Short title and commencement 2. Interpretation PART II MALAYSIA DEPOSIT INSURANCE CORPORATION Chapter 1 Objects and operations 3. The Corporation established under the Malaysia Deposit Insurance Corporation Act 2005 4. Objects of Corporation 5. Common seal and facsimile seal 6. Execution of documents 7. Establishment of committees 8. Office of Corporation 9. Power to appoint attorney and agent 10. Establishment of subsidiaries 4 Laws of Malaysia ACT 720 Chapter 2 Board of Directors Section 11. Duties and composition 12. Board may make by-laws 13. Term of office of directors 14. Disqualifications and termination of directors of Board 15. Actions and proceedings of Board not affected by vacancy, etc. 16. Remuneration and allowances for directors 17. Duties of directors 18. Meetings Chapter 3 Chief Executive Officer 19. Appointment, functions and accountability 20. Terms and conditions of service Chapter 4 Officers and employees, etc. 21. Appointments, terms and conditions of service 22. Financial assistance to officers, employees and other persons Chapter 5 Duties and powers 23. Restriction on enquiring specifically into affairs of particular customer 24. Secrecy 25. Powers of Corporation 26. Lending of money or provision of financing for specified purposes 27. Prescription of additional member institutions Malaysia Deposit Insurance Corporation 5 Chapter 6 Finance Section 28. Funds and sources of funds 29. Lending of money or provision of financing to Corporation 30. Permitted investments 31. Financial year 32. Requirement to keep books, records, accounts or other documents 33. Auditor 34. Financial statements and annual report 35. Non-consolidation of financial statements PART III MEMBERSHIP, CANCELLATION AND TERMINATION 36. Deemed membership 37. Terms and conditions of membership 38. Cancellation of membership 39. Termination of membership 40. Effects of cancellation or termination PART IV DEPOSIT INSURANCE Chapter 1 Scope of coverage 41. Deposits 42. Scope of coverage for deposits 43. Transfers of deposits among deposit-taking members 44. Deposits of deposit-taking member acquired by non-deposit taking member 45. Deemed deposits 6 Laws of Malaysia ACT 720 Section 46. Not part of deposit Chapter 2 Premiums 46A. Definitions 47. First premium in respect of new deposit-taking members 47A. Calculation of first premium in respect of new deposit-taking members 48. Annual premium in respect of deposit-taking members 49. Calculation of annual premium in respect of deposit-taking members 49A. Annual premium in respect of deposit-taking members under business transfer scheme 50. No set-off in respect of deposit-taking members 51. Premium surcharge in respect of deposit-taking members 52. Overdue charges in respect of deposit-taking members 53. Premium regulations in respect of deposit-taking members 54. Premiums and surcharges on deposit-taking members deemed earned Chapter 3 Payments 55. Payment 56. Obligatory payment 57. Discretionary payment 58. Advance payment 59. Date of computing liability 60. Calculation of return or interest on deposit for obligatory payment 61. Corporation may pay return or interest on obligatory payment 62. Calculation of return or interest on deposit for discretionary payment 63. Return or interest on investments linked to derivatives previously specified as insured by Corporation 64. Discharge of liability, etc., in respect of insured deposit 65. Subrogation Malaysia Deposit Insurance Corporation 7 Section 66. Assignment 67. Time limitation for action in respect of insured deposit PART V TAKAFUL AND INSURANCE BENEFITS PROTECTION Chapter 1 Scope of coverage 68. Definitions 69. Scope of coverage for takaful certificates and insurance policies 70. Transfers of certificates or policies among insurer members Chapter 2 Levies 70A. Definitions 71. First levy in respect of new insurer members 71A. Calculation of first levy in respect of new insurer members 72. Annual levy in respect of insurer members 73. Calculation of annual levy in respect of insurer members 73A. Annual levy in respect of insurer members under business transfer scheme 74. No set-off in respect of insurer members 75. Levy surcharge in respect of insurer members 76. Overdue charges in respect of insurer members 77. Levy regulations in respect of insurer members 78. Levies and surcharges on insurer members deemed earned Chapter 3 Payments 78A. Definitions 8 Laws of Malaysia ACT 720 Section 79. Payment in respect of protected benefit 80. Obligatory payment in respect of protected benefit 81. Discretionary payment in respect of protected benefit 82. Advance payment in respect of protected benefit 83. Cessation of insurance policies and takaful certificates on winding up 84. Determining the obligatory payment for family takaful certificates and life policies 85. Determining the obligatory payment for general takaful certificates and general policies 86. Notification by the Corporation 87. Calculation of return or interest on protected benefit for obligatory payment 88. Corporation may pay return or interest on obligatory payment in respect of protected benefit 89. Calculation of return or interest on protected benefit for discretionary payment 90. Discharge of liability, etc., in respect of protected benefit 91. Subrogation in respect of protected benefit 92. Assignment in respect of protected benefit 93. Time limitation for action in respect of protected benefit 94. (Deleted) PART VI EXAMINATION OF MEMBER INSTITUTIONS 95. Bank Negara Malaysia to provide information 96. Examinations 97. Special examinations 97A. Resolution planning Malaysia Deposit Insurance Corporation 9 PART VII ACTIONS BY THE CORPORATION Chapter 1 Actions in respect of non-viable member institutions Section 98. Notification of non-viability 99. Powers of Corporation in case of non-viability of member institution 100. Notice of assumption of control 101. Provisions in relation to assumption of control 102. Power to reduce share capital and to cancel shares of member institution under paragraph 99(1)(c) 103. Completion of resolution 104. Establishment of Assessor Committee 105. Transition services 106. Appointment of a receiver, etc. 107. Provisions in relation to appointments under paragraph 99(1)(c) and section 106 108. Validity of transaction 109. Stay of proceedings 110. Extension of time 111. Validity of security 112. Assignment not a default, etc. 113. Agreements overridden for purposes of paragraph 99(1)(c) and section 106 114. Further supplies and advances 115. Qualified financial agreements 116. Corporation, etc., not a successor employer 117. Certain claims, proceedings prohibited 10 Laws of Malaysia ACT 720 Chapter 2 Provisions relating to bridge institution Section 118. Designation of bridge institution 119. Publication of notice 120. Bridge institution authorized to carry on business 121. Non-application of requirements 122. Bridge institution not a successor employer 123. Power to give directions 124. Assumption of portion of uninsured deposit or unprotected benefit liability 125. Stay in respect of bridge institution 126. Notice of intention to continue proceedings 127. Assistance to bridge institution 128. Corporation may hold shares of member institution Chapter 2A Provisions relating to compulsory transfer of shares 128A. Definitions 128B. Compulsory transfer of shares 128C. Effect of the transfer order 128D. Replacement transfer order Chapter 3 General provisions relating to winding up 128E. Definitions 129. Winding up of member institution on application by the Corporation 130. Deemed creditor 131. Liquidator’s objectives on a winding up of a member institution 131A. Continuation of family takaful business 131B. Continuation of life business Malaysia Deposit Insurance Corporation 11 Section 132. Appointment and remuneration of liquidators appointed in respect of member institutions 133. Supervision of the Corporation Chapter 4 Specific provision on winding up of deposit-taking member 134. Priority of payments in the winding up of a deposit-taking member 134A. Priority of payments in the winding up of a deposit-taking member carrying on Islamic banking business 134B. Priority of payments in the winding up of a deposit-taking member that is an Islamic bank Chapter 5 Specific provisions on winding up of insurer member 135. Interpretation 136. Winding up of insurer member on application by persons other than the Corporation 137. Notice of winding up proceedings by persons other than Corporation 138. Liquidator’s reports and accounts 139. Statement of affairs 140. (Deleted) 141. (Deleted) 142. (Deleted) 142A. Priority of payments in winding up of takaful operator 142B. Priority of payments in winding up of insurance company 142C. Valuation of assets and liabilities of a takaful operator or insurance company 143. Waiver of strict proof of debt 144. Non-application of certain provisions in the Companies Act 2016, Financial Services Act 2013 and Islamic Financial Services Act 2013 12 Laws of Malaysia ACT 720 PART VIII STABILISATION COVERAGE Section 145. Interpretation 146. Stabilisation coverage order 147. Application of special provisions 148. Stabilisation coverage 149. Fee, premium or levy for stabilisation coverage 150. Application of provisions in respect of member institution 151. Fee, premium or levy deemed earned 152. Extended application of section 51 or 75 153. Surcharge 154. Overdue charges 155. No set-off 156. Funding and losses 157. Continuing application of special provisions PART IX POWERS IN RELATION TO ASSETS ACQUIRED BY THE CORPORATION Chapter 1 Acquisition and disposal by the Corporation 158. Acquisition and disposal of assets by the Corporation 159. Entitlement to dispose of and preserve value of property Chapter 2 Provisions relating to a conservator 160. Interpretation 161. Power to appoint conservator and additional conservators, etc. 162. Qualifications of conservator 163. Two or more conservators Malaysia Deposit Insurance Corporation 13 Section 164. Duration of administration 165. Notification of appointment of conservator 166. Effect of appointment of conservator 167. General powers of conservator 168. General duties of conservator 169. Conservator as affected person’s agent 170. Officers of affected person to perform or exercise function with written approval 171. Dealings with affected person’s asset 172. Compensation 173. Obligations of officer of affected person 174. Investigation of business and affairs 175. Conservator’s rights to books, records, accounts or other documents of affected person 176. C