Zurich General Insurance Malaysia Berhad and Zurich General Takaful Malaysia Berhad, two Malaysian insurance arms of the Zurich group, have been handed combined administrative monetary penalties by Bank Negara Malaysia for breaching targeted financial sanctions requirements.
BNM imposed a penalty of RM1,040,000 on Zurich General Insurance Malaysia Berhad (ZGIMB) and RM520,000 on Zurich General Takaful Malaysia Berhad (ZGTMB), bringing the combined total to RM1,560,000. The penalties, which both entities settled in full by 26 January 2026, relate to failures in meeting obligations around sanctions screening and compliance with TFS rules, with the breaches identified on 19 January 2026.
As reporting institutions, both entities were obligated to keep their sanctions databases current upon publication of the Domestic List, screen customers against both the Domestic List and United Nations Security Council Resolutions (UNSCR) List as part of customer due diligence, and take immediate action — including freezing funds and notifying BNM and the Royal Malaysia Police — upon confirming any true match. These requirements exist to prevent the financial system from being exploited for terrorism financing.
BNM identified the violations through reports submitted by Zurich itself relating to the onboarding of several entities that appeared on the Domestic List. The regulator found that Zurich had failed to update its sanctions database in a timely manner, meaning that screening was carried out against outdated records. The firms also did not adequately investigate potential matches to establish whether they constituted true matches. In the case of ZGIMB specifically, the entity additionally failed to freeze one designated customer’s funds and immediately report the matter to BNM upon confirmation of a match.
The root causes were identified as weaknesses in Zurich’s sanctions screening systems and standard operating procedures (SOPs), compounded by insufficient staff awareness and oversight. In determining the level of the penalties, BNM took into account both aggravating and mitigating factors, including the severity of the breaches, the firms’ history of compliance, and the quality of remedial steps taken following the incidents.
Since the breaches came to light, Zurich has undertaken corrective action, revising its SOPs and delivering refresher training to relevant staff to strengthen adherence to TFS obligations. BNM stated it expects all reporting institutions to comply with TFS requirements and warned that it will pursue supervisory and enforcement action against any institution that falls short of its legal and regulatory responsibilities.
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