Business Activity


A Labuan insurance company includes Labuan Insurer, Labuan Reinsurer or both, and Captive Insurer (Both Life and Non-Life, Conventional and Takaful). These companies may transact insurance business whether as direct business or as reinsurance accepted business but these companies cannot transact domestic business except as reinsurance and permitted local risks (subject to the approval of the local authority). Every Labuan company is avail to the Labuan IBFC Tax incentive issued by the Malaysian Inland Revenue Board (Refer to  the Labuan Financial Services Authority FAQ on Labuan companies).

On the Margin of Solvency Requirement, every Labuan insurer, including an insurance licensee which carries on Labuan captive insurance business, shall ensure that the realisable value of its assets exceeds the amount of its liabilities (net assets) at least the higher of:
a) the required working fund amount; or
b) 20% (10% for captives) of the net premium/ contribution income for the preceding year; or
c) 3% (2.5% for captives) of actuarial valuation of liabilities; or
d) For Captives only, 10% of provision for outstanding claims for the preceding year (net basis).