KARACHI: The Sindh High Court on Thursday restrained the Securities and Exchange Commission of Pakistan (SECP) from implementing the Takaful Rules, 2012 issued by it while hearing a constitutional petition filed by five takaful companies challenging the Takaful Rules, 2012.
The five takaful companies that filed the petition are Takaful Pakistan, Dawood Family Takaful, Pak-Qatar Family Takaful, Pak-Qatar General Takaful and Pak-Kuwait Takaful Company.
The SECP had notified the Takaful Rules, 2012 on July 16, 2012 under which the conventional insurance companies were allowed to carry on takaful business through window operations. The companies had raised serious objections that the new rules will result in the distortion of the takaful business in Pakistan and will allow conventional insurance companies to conduct takaful business in a manner which would be against the principles of Shariah. However, the SECP issued the new rules without considering these objections.
During the hearing, the counsels of the takaful companies contended that the new rules had been issued by the SECP without considering the opinions of religious scholars who would have advised the regulator that the new rules were not in line with the Islamic principles.
They further contended that the new rules allowed conventional insurance companies to conduct takaful business alongside conventional insurance business without any checks or balances to ensure that principles of Shariah were not violated. If the new rules were allowed to be implemented, the existing takaful companies will be seriously prejudiced.
The court after hearing the counsels of the petitioners issued notices to the SECP, the deputy attorney general and the secretaries of the Ministry of Commerce, Ministry of Finance and Ministry of Law and Justice.
Published in The Express Tribune, August 3rd, 2012.