ISLAMABAD, April 22: The Securities and Exchange Commission of Pakistan announced here on Thursday the establishment of a 4-member task force for formulating the rules and regulations for the conduct of Takaful (Islamic mode of insurance) business in Pakistan.
Justice (Retired) M. Mahboob Ahmad, former Chief Justice of the Federal Shariat Court of Pakistan, heads the task force. Its other members are: Saifuddin N. Zoomkawala, Managing Director & Chief Executive EFU General Insurance Company Limited; Abdul Rahim, Actuary, Sidat Hyder Morshed Associates; and Shafaat Ahmad, Executive Director, SECP, as Member/Secretary.
The SECP, in pursuance of the government's objective of Islamization of the economy, has allowed Takaful business in the country. Although the Takaful has been defined in the Insurance Ordinance 2000, a senior SECP official explained, rules for the conduct of this business are yet to be formulated.
Terms of reference of the Task Force include: 1) To frame "Takaful" Schemes for life/non-life products in compliance with the provisions of Islamic Shariah; 2) To evaluate the draft rules already framed by the Committee of officers set up earlier by the SECP and to formulate rules, including accounting regulations/formats for reporting purposes, in accordance with the proviso to Section 120 of the Insurance Ordinance, 2000; 3) To consider whether composite Takaful, in line with the practice in other jurisdictions, should be allowed or the existing statutory provisions under section 7(3) of the Insurance Ordinance, 2000, in respect of conventional insurance should be followed; 4) To consider whether or not the existing insurance companies, underwriting conventional insurance business should be allowed to run "window operations"; and 5) To evaluate Re-Takaful arrangements for Takaful companies to operate in Pakistan, with special reference to the normal Re-Takaful arrangements with as well as compulsory cessions to Pakistan Reinsurance Company Limited (PRCL).
The task force, besides carrying out its own research, will study the Takaful models being practised in other Muslim countries, which would enable it to formulate Takaful rules. The induction of Takaful business in Pakistan, the official remarked, would complement the efforts being made to introduce Islamic banking which, like other financial institutions, require Takaful services for their operations.
