Conventional insurance companies can open window operations of Takaful by taking benefit from Takaful rules 2012, announced by Securities and Exchange Commission of Pakistan (SECP).
The Takaful industry will progress rapidly at national level under thee rules, said Muhammad Zubair Mughal, Chief Executive Officer of AlHuda Centre of Islamic Banking and Economics, while talking to APP on Friday.
He declared the Takaful Rules 2012 a good step for the industry which would promote the industry rapidly at national level and the masses would have an opportunity to fulfill their insurance needs under Shariah.
“In Pakistan, due to elements of interest and gambling in insurance, people avoid insurance. The Pakistan Takaful industry entered into a new era and the insurance industry will grow rapidly by SECP Takaful Rules 2012,” Zubair said.
“The Takaful industry is growing rapidly around the world with 230 companies and 13 re-Takaful companies with a total volume of $11 billion,” he added.
Takaful was started in 2005 in Pakistan when SECP introduced Takaful Rules 2005 according to which only full-fledged Takaful companies had the permission to operate in this regard, five Takaful companies came into being due to efforts of investors of Malaysia, Qatar, Kuwait, UAE, Saudi Arabia and Pakistan.
Among the five companies, three are general whereas two are providing services of Shariah compliance life insurance.
Analyzing the insurance industry, he said that there were 37 general insurance companies, seven life insurance companies; five Takaful and re-Takaful companies are operating in Pakistan and now in accordance with the Takaful Rules 2012, more than 40 insurance companies can start a window operation by fulfilling SECP laws and conventional insurance companies can be transformed into Takaful companies.
He said that there were three types of business opportunities for the industry: 1 people, who do not use insurance due to interest factor; 2 people who use insurance by compulsion but they can come to Islamic insurance when this alternative is introduced; and 3 people who do not fall under the category of insurance as in Pakistan, the penetration of insurance is less than 1 percent.
These rules are a milestone in the Pakistan insurance industry, he added.