By RUPINDER SINGH

RHB Bank Bhd is facing a legal challenge from Tokio Marine Life Insurance Malaysia Bhd over a bancassurance agreement set to expire on December 31, 2024.

The dispute centers on Tokio Marine’s “right of first refusal” under the 2014 agreement.

RHB disclosed in a Bursa filing today that Tokio Marine has filed a lawsuit seeking to enforce this right and is requesting that RHB Bank provide the final bid for a new bancassurance deal.

The Japanese insurer is also seeking an interim injunction to prevent RHB from finalizing new agreements until the court resolves the issue.

The case is scheduled for management on September 11, 2024.

Despite the legal challenge, RHB Bank’s board of directors believes the dispute will not immediately impact the bank’s operations or financial standing.

RHB Bank argues that Tokio Marine’s right of first refusal has already been exercised and discharged, and that Tokio Marine had multiple opportunities to submit and revise bids.

This showdown comes on the heels of reports from September 2023 that RHB Bank was already scouting for a new bancassurance partner, anticipating the end of its current deal with Tokio Marine.

Valued at over RMB1 billion, the agreement has attracted significant interest, especially as rumors swirl that Tokio Marine’s parent company is eyeing a sale of its Southeast Asian life insurance business—a deal that could fetch a staggering US$1 billion.