Brunei

Principal Legislation

• Insurance Order 2006 and Insurance Regulations 2006
• Takaful Order 2008 and Takaful Regulations 2008
• International Insurance and Takaful Order 2002
• Brunei Darussalam Central Bank Order 2010 (originally the Monetary Authority of Brunei Darussalam Order; renamed in 2021)

These laws govern the licensing, operation, and supervision of conventional insurance and takaful business in Brunei. The International Insurance and Takaful Order 2002 is in force for international insurers.

Supervision

The insurance and takaful sectors are regulated by the Brunei Darussalam Central Bank (BDCB), formerly the Autoriti Monetari Brunei Darussalam (AMBD). The BDCB assumed full regulatory responsibility under the Brunei Darussalam Central Bank Order 2010 (amended in 2021), replacing the Financial Institutions Division of the Ministry of Finance.

BDCB oversees both conventional insurers and takaful operators, including licensing, solvency, conduct, and product approvals. It also regulates intermediaries and bancassurance. In 2025, the BDCB signed a regulatory cooperation MoU with the Monetary Authority of Singapore to strengthen cross-border supervision and information sharing.

Admitted/Non-Admitted

Insurance business in Brunei may only be carried on by a registered insurer licensed by the Brunei Darussalam Central Bank (BDCB) under the Insurance Order 2006 ADB Law and Policy Reform. Non‑admitted insurance placements are not permitted. Private insurers may place reinsurance either offshore or locally, subject to BDCB oversight and counterparty approval.

Compulsory Insurance

• Motor third party bodily injury.
• Professional indemnity insurance – insurance brokers, architects and engineers undertaking government contracts.
• Oil pollution liability
• Workers’ compensation
• Compulsory medical insurance for domestic service workers, visitors, professional/business visitors, and permanent residents.

State Involvement 

The Brunei government owns a single non‑life insurer under the Brunei Investment Agency (BIA), underwriting public and strategic risks. The government also fully owns one takaful operator, effectively retaining full state control in that sector.

Tariff Classes

Since June 2002, a minimum motor tariff has been applied. No other insurance classes are subject to tariffs, although company actuaries must approve life insurance rates.

Premium Taxes and Charges

A stamp duty of BND 0.25 applies to all non-life insurance classes, including personal accident and healthcare. Life insurance policies are subject to a stamp duty of BND 1 per BND 10,000 of the sum assured.

Policy language

English is the official language for insurance and takaful contracts.

Brunei’s insurance market is small, serving a limited population and area, with around 250 non-life agents operating. The Insurance Order 2006 and Insurance Regulations 2006 require agents to be registered and conduct business only with licensed local insurers. Brokers must maintain a minimum capital of BND 200,000 and hold professional indemnity insurance.

The Brunei insurance industry continues to rely heavily on foreign reinsurance support in the non-life sector, due to the small size and limited risk pool of the domestic market. Insurers have full freedom to place reinsurance offshore, and industry estimates indicate that less than 10% of non-life reinsurance premiums are retained locally. Coinsurance is uncommon, with most risk transfer arranged through treaty and facultative reinsurance with international reinsurers.

Brunei’s insurance market is small both in terms of population and of land area and is more than adequately served by around 250 non-life agents. The three conventional life offices in Brunei employ some 350 agents to distribute their products.

Despite its proximity to Indonesia, Brunei is unaffected by major seismic events such as earthquakes and tsunamis, with the risk considered insignificant. Flooding primarily results from heavy tropical rainstorms leading to flash floods, and from the overflow of rivers originating from the interior of Borneo. Flood risks have been exacerbated in recent years due to climate change.