Insurance companies are required to include a detailed breakdown of the premium paid in their e-Invoices. This ensures clarity for policyholders and aligns with classification standards. Premiums must be categorized using appropriate codes, such as:

• 014: Insurance – Education and medical benefits
• 015: Insurance – Takaful or life insurance
• 022: Others
• 024: Private retirement scheme or deferred annuity scheme

This detailed approach enhances transparency and compliance with e-Invoicing requirements.

When a joint insurance policy involves multiple policyholders:

• The principal policyholder, who receives the invoice, should be listed as the Buyer in the e-Invoice.
• If another policyholder requests an e-Invoice, the insurance company must issue a separate one for them.

This maintains the existing process while accommodating specific requests.

For collections made on behalf of third parties (e.g., stamp duty, fees):

• If the insurance company is issued an e-Invoice for these collections, they must include them in their e-Invoice.
• If the collection's e-Invoice is issued directly to the policyholder, these items need not be included in the insurance company’s e-Invoice.

It’s important to note that such collections are not considered the insurance company’s income and must be classified correctly.

Scenario 1: Master Policy

• If the master policy is between the insurance company and an intermediary, the e-Invoice should be issued to the intermediary.
• The intermediary, in turn, must issue an e-Invoice to the end customer for the premium received.
• If the intermediary does not issue an e-Invoice, the insurance company must issue it directly to the end customer.

Scenario 2: Individual Policy

• If the policy is directly between the insurance company and the end customer, the e-Invoice must be issued to the policyholder (end customer), irrespective of intermediary involvement.

In cases of policy termination, a refund note e-Invoice must be issued when there is a return of premium to the policyholder. Exceptions include:

• Payments made incorrectly.
• Overpayments.
• Return of security deposits.

This aligns with the insurance company’s existing billing practices.

If a policyholder is below 18 years of age, the Buyer’s details in the e-Invoice should reflect the responsible party, such as a parent, guardian, or another relevant individual.

For group policies:

• If individual policies are issued to each group entity, e-Invoices should be addressed to each entity.
• If a single group policy is issued, the e-Invoice should be issued to the master policyholder.

To meet specific customer requests, insurance companies may issue separate e-Invoices for respective entities under the master group policy.

When employers collect insurance premiums from employees:

• The e-Invoice should be issued to the employee, who is the policyholder.
• The employer’s role in this context is limited to facilitating payment and does not alter the e-Invoicing process.

Insurance companies following a “cash before cover” policy can maintain their current practices under e-Invoicing:

• For B2B/group transactions, invoices are issued upon policy issuance or when premiums are due.
• For B2C transactions, annual statements can continue to be issued for life, medical, and education policies.

Insurance companies are required to issue self-billed e-Invoices for all payments related to claims, compensations, and benefits, whether the recipient is an individual or a business.

• Supplier Designation: The policyholder or beneficiary is considered the Supplier in the e-Invoice.
• Payments to Third Parties: Even if payments are made to third parties like hospitals, workshops, or attorneys, the Supplier role must still be assigned to the policyholder or beneficiary.
• Consolidated Invoicing: For individuals who are not running a business, companies can issue a consolidated self-billed e-Invoice for multiple claims or benefit payments.

This approach promotes transparency and simplifies the invoicing process, ensuring clear documentation for all transactions.

When dealing with damaged assets, such as scrap or wreck, the e-Invoice requirements depend on who owns the asset:

• Owned by Insurance Company:If the insurance company takes ownership of damaged assets as part of a claim, it must issue an e-Invoice to the workshop or salvage contractor for the disposal.
• Owned by Policyholders in Business:Policyholders who own the damaged asset and operate a business (e.g., companies or partnerships) must issue the e-Invoice to the workshop or salvage contractor.
• Owned by Non-Business Policyholders:For individuals not running a business, non-residents, or entities exempt from e-Invoicing:
  • The workshop or salvage contractor must issue a self-billed e-Invoice for the disposal.

These distinctions ensure clarity and proper compliance based on ownership and operational status.

In a knock-for-knock arrangement, policyholders file claims with their own insurance companies after an accident, even while fault is being determined. For example:

• Driver A claims from their insurance after an accident with Driver B.
• If Driver B is found at fault, Driver A’s insurer recoups the payout from Driver B’s insurer.

• Policyholder Claims:Self-billed e-Invoices for the initial claims made by both Drivers A and B must follow the standard process described above.
• Inter-Insurer Recoupment:Driver B’s insurance company must issue a self-billed e-Invoice to Driver B (the policyholder), even if the payment is made to Driver A’s insurance company.
• Consolidated self-billed e-Invoices are allowed for non-business individuals.

This process ensures consistency in invoicing for claims and recoupments.

The implementation of e-Invoicing enhances accountability, clarity, and compliance in the insurance industry. By clearly defining invoicing responsibilities for claims, damaged assets, and inter-insurer settlements, this framework streamlines processes while maintaining transparency.

• Builds trust with policyholders and stakeholders.
• Reduces administrative complexity.
• Ensures smooth regulatory compliance.

When insurance companies pay registration or examination fees on behalf of their agents to the Insurance Association or Examination Body, the question arises: is this a pass-through transaction where e-Invoicing requirements can be bypassed? Here's what you need to know:

• Builds trust with policyholders and stakeholders.
• Reduces administrative complexity.
• Ensures smooth regulatory compliance.

If the Insurance Association or Examination Body issues the e-Invoice for registration or examination fees directly to the insurance company:

• Inclusion in e-Invoice to Agents:The insurance company must include the payment made on behalf of the agents in the e-Invoice it issues to the agents when recovering the amount.
• Not Recognized as Income:
  • The recovered amount is not treated as the insurance company’s income.
  • An appropriate classification code should be used to reflect this correctly in the e-Invoice.

This ensures compliance and transparency in how pass-through costs are handled.

If the Insurance Association or Examination Body issues the e-Invoice for the registration or examination fees directly to the agents:

• No Inclusion Required: The insurance company is not required to include the fees in the e-Invoice issued to the agents.
  • In this case, the agents directly handle the invoicing and payment process with the association or examination body.

This approach simplifies the transaction, reducing the administrative burden on the insurance company.

Insurance companies manage interfund charges like wakalah fees, qard, and actuarial surplus transfers. These internal transactions within the same legal entity are excluded from e-Invoicing requirements.

• No E-Invoice for Interfund Charges These are internal activities with no external party involvement, so e-Invoicing is unnecessary.
• Flexibility to Continue Practices Companies can continue issuing internal invoices for record-keeping if desired, but it is optional.

This exemption reduces administrative workload and ensures compliance focuses on external transactions.

By excluding interfund charges from e-Invoicing, the regulations simplify processes and allow businesses to prioritize external transaction compliance without added burdens.