Global: IFSB issues proposed standard on the conduct of business supervision in takaful
Source: Middle East Insurance Review | May 2023
The Islamic Financial Services Board (IFSB) has issued an exposure draft titled ‘Conduct of Business Supervision in Takaful Undertakings’.
The proposed standard aims to provide a framework of principles of the conduct of business that the regulatory and supervisory authorities (RSAs) can utilise in regulating their markets and supporting the growth and stability of the takaful industry. It intends to promote a climate of confidence and a supportive environment to uphold transparency and fair dealing comparable to conventional insurance frameworks and strengthen the relevant moral, social, and religious dimensions essential in the takaful business.
The objectives of the proposed standard are to:
- Promote fairness, safety and stability in takaful markets by addressing takaful-specific Shariah and conduct issues, as well as considering emerging matters such as digital distribution, intermediaries and new products
- Define appropriate mechanisms to strengthen consumer protection, Shariah compliance assertions, and public confidence in the takaful industry
- Guide in identifying conduct risks through risk indicators and addressing market conduct issues specific to takaful via risk-based supervision by RSAs
- Outline success factors for effective and robust consumer education programmes for takaful with a particular focus on digital financial education Increase harmonisation of regulatory practices in the takaful sector.
The IFSB has launched a public consultation on the exposure draft which ends on 28 May 2023. The IFSB will be conducting an online public hearing and a roundtable as part of the public consultation process. M