Pakistan: Takaful authorisation procedures drawn up
Source: Middle East Insurance Review | Feb 2017
The Securities and Exchange Commission of Pakistan (SECP) has proposed a procedure for the authorisation of takaful/window takaful operators, giving a detailed brief of the major conditions likely to be imposed on authorised takaful/window takaful operators. These are set out in the draft Insurance Bill, 2016.
According to sources, while the primary law – the Insurance Ordinance, 2000 – recognises the business of takaful, a need for elaboration is felt for effective regulation of Islamic insurance, reported Business Recorder.
Under the draft Insurance Bill, 2016, no person other than a registered insurer duly authorised by the SECP to transact takaful business shall be eligible to transact takaful business in Pakistan. An insurer registered to transact life insurance business shall be eligible to transact family takaful business and an insurer registered to transact non-life insurance business shall be eligible to transact general takaful.
A takaful or a window takaful operator shall appoint a Shariah advisor or Shariah board, a Shariah-compliance auditor and a Shariah-compliance officer to meet other requirements prescribed by the SECP.
In addition, a window takaful operator shall report its assets, liabilities, revenues and expenses separately for its conventional and takaful businesses.
It shall also appoint a full-time head of window takaful operations who possesses relevant experience and knowledge.