ISLAMABAD (September 09 2003) : Chairman Securities and Exchange Commission of Pakistan (SEC), Dr Tariq Hassan has said that Commission was considering to set up a Task Force to look into different modes of “Takaful” and related business for developing “Takaful industry” in the country.
He was delivering his presentation on the topic “Islamisation of Insurance” system (Takaful) in Pakistan here at a seminar on Islamisation of Insurance at National Institute of Banking and Finance organised by International Islamic University (IIU) on Monday.
Dr Hassan said that the Insurance Ordinance 2000 for the first time recognised Takaful business by defining it as a scheme based on mutual assistance in compliance with the provisions of Islamic Shariah.
He said Takaful also provides for mutual financial and assistance to participants in case of occurrence of certain contingencies and whereby participants mutually' agree to contribute to the common fund for that purpose.
The Chairman SEC said that the Insurance Ordinance prohibits business on dividing principle.
However, he said on exclusion for business of Takaful insurance is provided in Section 120.
Takaful, he said is already in, practice in various countries where Wakalah and Modaraba models are being used.
“I understand that Takaful as a mutual cooperation has been in practice for a very long time; however as a business endeavour on organise level it has a very brief history of less than twenty five years.
While the basic principles emanate from the virtues of cooperation, solidarity and brotherhood, the practice of Takaful in terms of models, process, disclosures and regulatory regime exhibit differences”, he remarked.
Dr Hassan said that there is a need for consultation between the industry, regulators and other stakeholders for creating an enabling environment for the Takaful industry.