The Securities and Exchange Commission of Pakistan has revised the rules governing takaful practices in Pakistan. Existing rules governing takaful practices in Pakistan were issued in 2005: during the course of business activity and implementation, a number of practical issues with these rules were highlighted by stakeholders.
To address these concerns, the Securities and Exchange Commission of Pakistan (SECP) had constituted a committee in 2007 with the mandate to review the existing rules and recommend possible enhancements.
After deliberations, the committee submitted its recommendations; based on which new takaful rules have been drafted. The SECP reviewed the draft rules and, after seeking opinion from Islamic scholars and legal experts, have approved them. The inaugural ceremony of new laws governing the practice took place at a local hotel in Karachi today, in which SECP Chairman Muhammad Ali officially announced the promulgation of Takaful Rules, 2012. Many companies were absent from the occasion to which the SECP Chairman expressed disappointment.
Ali warned the companies that competition will be severe after the rules are enforced however, he argued that increased competition will boost growth in the long-term.
While speaking on the occasion, Commissioner (Insurance) Mohammed Asif Arif informed that at present three General Takaful (non-life insurance) and two Family Takaful (life insurance) companies are operating in Pakistan. It is expected that after promulgation of the new rules, the number of takaful service providers in Pakistan will increase substantially, as conventional insurance companies will now be allowed to offer takaful products.
“Pakistan is the second country in the world, after Indonesia, which has allowed such window takaful operations,” he observed.
Published in The Express Tribune, July 14th, 2012.
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