IFSB Seminars To Address Takaful Industry

Bernama -- The absence of clear regulatory frameworks, prudential standards and codes of good practice could be the limiting factors in the potential growth and development of the Takaful industry, says the Islamic Financial Services Board (IFSB).
These limitations should be addressed early as the failure to do so will have a negative impact on the development of the Islamic financial services industry (IFSI), it said in a statement Friday.

As part of its efforts to facilitate the industry growth, the board is organising two seminars this November.

Hosted by the Monetary Authority of Singapore, a seminar on Rating of Takaful and Retakaful Firms will be held on Nov 25 while another seminar on Regulation of Takaful will be from Nov 26 - 27.

The one-day Rating of Takaful and Retakaful Firms seminar will address the need for ratings vis-a-vis the expansion of the Takaful and Retakaful industries, the rating methodologies employed by rating agencies and the perspectives of rated institutions.

It will also discuss the building blocks in developing the necessary transparency framework to allow a better understanding of the Takaful industry among the various stakeholders.

The seminar on the Regulation of Takaful, will discuss the issues of risk management, treatment of underwriting surplus, solvency framework as well as regulatory issues in relation to Takaful undertakings.

According to IFSB, the proceedings and discussions of three seminars previously held on the Regulation of Takaful have greatly contributed to its efforts in developing industry guidelines for Takaful.

The first guiding principle for the industry entitled "Guiding Principles on Governance for Islamic Insurance (Takaful) Operations" is scheduled to be issued as an exposure draft by end of this year.

Among the industry experts who have confirmed their participation as chairpersons and speakers for the two seminars are Dr Abdul Rahman Khalil Tolefat, Allianz Takaful, Bahrain; Andrew Cunningham, Financial Services Corps, Egypt; Professsor Volker Nienhaus, University of Marburg, Germany; Martin Roberts, Beachcroft Consulting, UK; Murad Al Haj Mahmoud, Insurance Commission of Jordan; Dr Omar Zuhair Hafiz, Allied Cooperative Insurance Group, Saudi Arabia; and Salah El Din Musa Mohamed, Shiekan Insurance Company, Sudan.

Both Seminars will be held at the Grand Hyatt Singapore.

For more information on the seminars, please visit www.ifsb.org/takaful2008.

Currently there are at least three Takaful (insurance based on Islamic principles) models that are widely used based on the contractual forms of mudaraba, wakalah and waqf or combinations of these.

Whilst the existence of these models demonstrates the flexible and practical nature of Takaful principles, they also raise the questions of contractual relationship between parties and their respective rights and obligations, as well as the need to ascertain the types of risk peculiar or common to each model.

The IFSB is an international standard-setting organisation that promotes and enhances the soundness and stability of the Islamic financial services industry by issuing global prudential standards and guiding principles for the industry, broadly defined to include banking, capital markets and insurance sectors.