Turkey: Draft takaful regulations to be submitted to Premier
Source: Middle East Insurance Review | Oct 2017
Proposed takaful regulations and a framework for Islamic insurance will be submitted to the Prime Minister soon, said Deputy Premier in charge of the economy Mr Mehmet Simsek.
He noted that the draft takaful regulations are of great importance because when approved, they would be the first such set of regulations in the country.
He told Anadolu Agency that Islamic insurance, which is based on common risk sharing and solidarity principles, offers an alternative model for citizens who avoid traditional insurance methods because of sensitivities about paying interest and adhering to Islamic principles.
Mr Simsek said that the main purpose of the regulations is to ensure the functioning and development of insurance based on Islamic principles and to enforce the rights and interests of participants.
He expected that takaful in Turkey will attract capital from the GCC countries.
Noting that there are companies in Turkey which are already active in the field of Islamic insurance products, Mr Simsek said that some of these companies offer takaful products to customers through windows, without establishing a company separate from that for conventional insurance operations.
He said that the government foresees a three-year transformation period for insurers with takaful windows. He added that this period might be extended for another two years.
However, at the end of this process, the window model would no longer be allowed in the field of Islamic insurance.
Mr Simsek stressed that companies offering takaful products should establish advisory committees that monitor compliance of these products with Islamic finance principles.
The proposed takaful regulations would set out the principles regarding the activities and duties of Shariah advisory committees. M