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The IFSB issues the Exposure Draft of the Conduct of Business Supervision in Takāful Undertakings (ED-29)

Date posted: 29 March 2023

29 March 2023, Kuala Lumpur - The Islamic Financial Services Board (IFSB) has today issued the Exposure Draft (ED-29) of the Conduct of Business Supervision in Takāful Undertakings standard for a 60-day public consultation period starting from 29 March 2023 until 28 May 2023. The IFSB invites comments from central banks, regulatory and supervisory authorities, international organisations, institutions offering Islamic financial services (IIFS), academics and other interested parties.

The Exposure Draft on Conduct of Business Supervision aims to provide a framework of principles of conduct of business that the regulatory and supervisory authorities (RSAs) can utilise in regulating their markets and supporting the growth and stability of the takāful industry. It intends to promote a climate of confidence and a supportive environment to uphold transparency and fair dealing comparable to the conventional frameworks and strengthen the relevant moral, social, and religious dimensions essential in the takāful business.

More specifically, the objectives of the standard are to: 

• Promote fairness, safety, and stability in takāful markets by addressing takāful specific Sharīʻah and conduct issues, as well as considering emerging matters such as digital distribution, intermediaries, and new products
• Define appropriate mechanisms to strengthen consumer protection, Sharīʻah compliance assertions, and public confidence in the takāful industry
• Guide in identifying conduct risks through risk indicators and addressing market conduct issues specific to takāful via risk-based supervision by RSAs
• Outline success factors for effective and robust consumer education programs for takāful with a particular focus on digital financial education
• Increase harmonisation of regulatory practices in the takāful sector.

The IFSB will be conducting an online public hearing and a roundtable as part of the public consultation process. Participation in the online public hearing is free and open to all. Details will be announced in due course. 

The softcopy of ED-29 is available on the IFSB website, https://www.ifsb.org/exposure.php. The IFSB Secretariat invites all interested parties, especially members of the IFSB, to send their comments to the IFSB Secretariat through email to public_consultation@ifsb.org by 28 May 2023 at the latest.