5 November 2015, Kuala Lumpur – The Islamic Financial Services Board (IFSB) issues Exposure Draft on Guiding Principles for Retakāful (Islamic Reinsurance) (ED-18) for a Public Consultation period starting 5 November 2015 to 4 January 2016, and invites comments from regulatory and supervisory authorities, international organisations, Retakāful and Takāful undertakings, academics and other interested parties.
The aim of ED-18 is to provide the regulatory and supervisory authorities (RSAs) and market players of the Takāful industry guidance relating to Retakāful. ED-18 identifies and sets forth a set of basic principles and best practices pertaining to Retakāful activities of both Takāful and Retakāful Operators (TOs and RTOs). In particular, the objectives of ED-18 include:
ED-18 draws upon the results of an industry-wide survey conducted by the IFSB, and highlights the distinguishing features of various structures being used in various jurisdictions for offering Retakāful solutions. Furthermore, ED-18 provides highlights on various dimensions of Retakāful arrangements which include inward and outward Retakāful as well as co-Takāful. Other pertinent issues covered in ED-18 are Retakāful windows, business undertaking model, and the many types of Retakāful arrangements.
A key feature of ED-18 is that it provides Retakāful stakeholders with guiding principles on the conduct of the Retakāful business. These guiding principles touch important elements of the Retakāful practice including governance, Sharī`ah principles, transparency, disclosure and supervisory review process. ED-18 also delineates relevant regulatory standards and practices that are to be implemented alongside the aforementioned guiding principles which include the suitable adoption of IAIS’ Core Principles to ensure prudence in Retakāful regulatory supervision, business and operations.
In line with the IFSB due process on the development of Standards and Guiding Principles, the IFSB will be organising a Public Hearing for ED-18 on 30 November 2015 at Sasana Kijang, Kuala Lumpur, Malaysia. A Roundtable Discussion on Retakāful will also be held in January 2016 to have an in-depth discussion on the ED. These platforms aim to provide the industry stakeholders greater understanding of the Exposure Draft, as well as to solicit feedback on its contents, prior to its final submission to the IFSB Council in April 2016. Participation of the Public Hearing and Roundtable is free and open to all.
The contact persons for the events are as follows:
The softcopy of ED-18 and information on the Public Hearing is available on the IFSB website, www.ifsb.org. Accordingly, the IFSB Secretariat invites all interested parties, especially the IFSB members, to send their comments on the EDs to the Secretariat at: [email protected] latest by 4 January 2016.
