Philippines: Insurance regulator stipulates segregation of funds between takaful window participants and shareholders
Source: Middle East Insurance Review | Apr 2026
The Philippine Insurance Commission (IC) has set out guidelines stating that existing regulations, as well as other issuances by the IC, for conventional insurance and mutual benefit associations (MBAs), shall also apply to all entities with takaful window operations.
Among the measures set out in the guidelines is the segregation of funds, books, and records. The capital/fund of the Participants’ Fund shall be completely segregated from that of the takaful window operator’s shareholders. Further, the capital/fund of the Participants’ Fund shall not be invested in/or co-mingled with other funds held by conventional insurance and MBAs.
The books and records of a takaful window shall contain full information relative to its takaful and financing transactions and activities, and shall be kept separate and distinct from the books and records of transactions performed by other departments/units of the conventional insurance and MBAs.
Likewise, adequate internal controls and systems must be implemented and maintained to ensure compliance with the required segregation.
Furthermore, the regulated entity shall implement a transparent, fair, and Shariah-compliant methodology to allocate shared expenses between the takaful operator and the conventional insurance business, using measurable drivers. This allocation shall be subject to review by the Shariah Committee and approval by management.
Insurers and MBAs undertaking takaful window operations shall prepare a separate annual statement (AS) specifically for their respective takaful operations using a prescribed template and submit it to the Commission.
Integration of takaful window operations in composite companies’ books
Composite companies authorised to offer takaful products shall present the takaful window operations within the same unit as its corresponding conventional insurance operation in the AS. This means composite entities engaging in family takaful operations shall incorporate the family takaful accounts in the AS of life insurance operations, while composite entities engaging in general takaful operations shall incorporate the general takaful accounts in the AS of non-life insurance operations. M