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PAKISTAN:
Following the recent judiciary and regulatory facilitation from the Sindh
High Court and Securities and Exchange Commission of Pakistan (SECP)
respectively, an increasing number of conventional insurance companies in
the country have voiced their intention of tapping into the Takaful
sector. Insurance providers in both private and public sectors will soon
penetrate the Takaful space with the launch of window operations to
market their Shariah compliant products.
Pakistan’s largest life insurance company, Jubilee Life Insurance, aims
to launch its Takaful window within the coming four to six months.
Speaking to a local daily Javed Ahmed, CEO of Jubilee Life, said: “Just
like conventional business, Jubilee Life will strive to take a lead in
the Takaful business as well. In view of our vast distribution network
and bancassurance partnerships, we are confident that this is
achievable.” Javed expects its Takaful operations to become profitable
within two to three years.
Government-owned State Life Insurance Corporation is also reported to be
launching Takaful products in the near future, following the upcoming
appointment of its board by the Ministry of Commerce. The Takaful market
in Pakistan is presently viewed as an untapped market with huge potential
for growth.
Earlier this week, the SECP received five applications from conventional
insurers to operate Takaful windows. According to Muhammad Kashif
Siddiqee, a joint director at SECP, the regulatory body expects as many
as half of the 44 non-Takaful companies in Pakistan to eventually apply
for a license.
To set up a Takaful window, conventional insurers are required to deposit
PKR50 million (US$502,139) in a separate bank account for Takaful
business in a scheduled bank. Insurers must also submit company
documentation including minutes of the board of directors meeting where
approval for the decision for Takaful is given, along with their
application to operate a Takaful window. For Family Takaful, a statement
of the statutory funds to be established by the operator and participant
Takaful Fund policies need to be submitted, together with a CV of the
proposed Shariah advisor. Additionally, a 10-year business plan is also
required for Family Takaful, with a three-year plan required for non-Life
Takaful operators.
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