Pakistan’s sole reinsurer offering sharia-compliant reinsurance has been granted approval by the country’s capital market regulator as attempts are made to boost the emergent Islamic insurance (takaful) sector, according to reports from Reuters.
Takaful windows allows insurers to offer sharia-compliant and conventional products side by side, provided that client money is segregated.
The Securities and Exchange Commission of Pakistan announced on Saturday it had authorised Pakistan Reinsurance Co to open a so-called takaful window, which would help boost new business opportunities for the state-owned company.
The SECP says this move would enable local takaful companies obtain retakaful cover within Pakistan, avoiding outflow of premiums to reinsurance markets overseas.
Takaful – which is based on the concept of mutuality, where a takaful company oversees a pool of funds contributed by policyholders from which claims are paid – is seen as an important pacemaker of consumer appetite for Islamic financial products.
New takaful rules which allowed the use of takaful windows were introduced by Pakistan in 2012.
