Takaful Pakistan requested the Sindh High Court (SHC) on January 21 that its name be removed from the list of petitioners against the SECP with immediate effect. CREATIVE COMMONS
The Islamic insurance industry of Pakistan has received a fresh blow in its longstanding legal battle with the apex regulator over the controversial Takaful Rules 2012, with one of its key players backing off from the constitutional petition against the Securities and Exchange Commission of Pakistan (SECP).
Takaful Pakistan, a Shariah-compliant general insurance company, requested the Sindh High Court (SHC) on January 21 that its name be removed from the list of petitioners against the SECP with immediate effect.
“That the management of Petitioner No 1 has decided not to pursue the present petition and Petitioner No 1 desires that its name be deleted from the array of petitioners. Petitioners No 1 does not want to remain a party to the present situation,” Takaful Pakistan CEO Dr Syed Arif Hussain stated in the affidavit filed with the SHC on Tuesday.
Subsequent to the promulgation of Takaful Rules 2012 two years ago, three general and two family Takaful companies challenged the new set of regulations in court, saying the SECP’s move would ‘distort’ the Islamic insurance industry.
Claiming that window operators would conduct the Takaful business “in a manner against the principles of Shariah”, the petition filed by five Islamic insurance companies led to a restraining order from the SHC against the implementation of new rules on August 2, 2012.
Speaking to The Express Tribune, Hussain said it is pointless to pick a fight with the regulator in court. “Our board decided that engaging in a legal battle with the SECP is futile. Why should we waste resources in fighting a legal battle if the issue can be resolved amicably through negotiations?”
Hussain said the primary concern of Islamic insurance companies about Takaful Rules 2012 is that the new regulations do not require conventional insurance companies to set aside paid-up capital for Shariah-compliant window operations. “I think the SECP will address our concerns if we set aside all the bitterness and try to resolve the issue through talks,” he said.
Speaking on the condition of anonymity, a source in the Takaful industry said Takaful Pakistan has withdrawn its name from the list of petitioners under pressure from the SECP, which imposed a fine of Rs2.2 million on the company’s directors in May 2013 for not seeking its approval before appointing a new CEO.
The source alleged the fine is going to be revoked, as the company has withdrawn its support for the petition against the SECP over Takaful Rules 2012.
However, an official of the SECP declared the allegation baseless, saying the regulator has nothing to do with the matter.
Similarly, Hussain said the decision to withdraw the company’s name from the petitioners’ list was taken by the company’s board of directors without any pressure. Saying that the company has already appealed against the imposition of the fine in the SHC, Hussain added the appeal has nothing to do with the board’s decision to stay away from the court battle over Takaful Rules 2012.
Published in The Express Tribune, January 23rd, 2014.
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