Kuala Lumpur, December 4, 2008 – In line with their mandate to liaise and cooperate with relevant organizations currently setting standards for the stability of the international monetary and financial systems and those of the member countries, the Islamic Financial Services Board (IFSB) today announced that it has signed an agreement with the International Association of Insurance Supervisors (IAIS) which aims to enhance the cooperation and understanding in mutual areas of supervision in the Takaful industry.
Both organisations have a mutual goal to promote the soundness and stability of the insurance/Takaful industry through the development of international prudential standards and enhancing the cooperation among supervisory authorities. While the specific scope of the IAIS is on the development of the insurance industry, the scope of the IFSB, which is the Islamic financial services industry, encompasses banking, capital markets and insurance/Takaful. The first cooperation between the two organisations resulted in the publishing of a Joint Issues Paper on Issues in Regulation and Supervision of Takaful (Islamic Insurance) published in June 2006. The Working Agreement is a continuation of that cooperation.
The IFSB is an international standard-setting organisation that represents supervisory authorities that recognise Islamic financial services, whether by legislation or regulation or by established practice and international inter-governmental organisations, that have an explicit mandate for promoting Islamic financial services industry. It also admits insurance/Takaful market players as well as banking and capital markets institutions as observer members. The aim of the IFSB is to promote and enhance the soundness and stability of the Islamic financial services industry by issuing global prudential standards and guiding principles for the industry, broadly defined to include banking, capital markets and insurance sectors. Towards this end, the IFSB works closely with relevant international, regional and national organisations, research/educational institutions and market players.
Established in 1994, the IAIS represents insurance regulators and supervisors of some 190 jurisdictions in nearly 140 countries and has also more than 120 insurance professionals, insurers, reinsurers and trade associations as observers. The IAIS issues global insurance principles, standards and guidance papers, provides training and support on issues related to insurance supervision, and organises meetings and seminars for insurance supervisors. The IAIS works closely with other international institutions to promote financial stability.
The IFSB will be issuing an exposure draft entitled Guiding Principles on Governance of Islamic Insurance (Takaful) Operations by the end of 2008. It is also currently preparing a standard on the solvency requirements for Takaful operations.”
