Insurance companies have to comply with a 70% foreign ownership cap by June 2018, reports The Wall Street Journal.
Great Eastern Holdings, the insurance arm of Oversea-Chinese Banking Corporation (OCBC), has reportedly engaged at least one Malaysian bank to explore selling a large stake in its local operations.
Early estimates suggest that the sale could net as much as $1bn (£740m, €834m).
Exempt no more
The cap was introduced in 2009 but foreign insurance firms had enjoyed an exemption to the change.
However, in June 2017, the Malaysian central bank sent letters to wholly-owned foreign insurers asking them to reduce their stakes in line with regulation for domestic insurers, reports newswire Reuters.
Letter recipients reportedly included Hong Kong’s AIA Group, Japan’s Tokio Marine Holdings, and the UK’s Prudential.
At the time, industry commentators expressed concern about the small number of large local funds that could potentially buy the stakes up for sale.
