February 11, 2015
Mansoori: The Conference seeks to establish a scientific and jurisprudential
reference from Abu Dhabi that can develop the Islamic insurance industry
Dhabi on February 8, 2015
the patronage of H. H. Sheikh Mansour bin Zayed Al Nahyan, Deputy Prime
Minister and Minister of Presidential Affairs, the Insurance Authority has organized
the Islamic Insurance Conference (IIC). The event will be held in Abu Dhabi on 8-9
March 2015 under the motto “Reality and Prospects for the Development of
Islamic Insurance Regulations”.
E. Eng. Sultan Bin Saeed Al Mansoori, Minister of Economy and Chairman of the
Insurance Authority (IA), said that the IIC seeks to establish a scientific and
jurisprudential reference from Abu Dhabi that can develop the Islamic insurance
industry worldwide and achieve a turnaround in the Sharia and legal rules associated
with Takaful insurance activities.
its scientific sessions and through the participation of decision makers,
stakeholders, and specialized experts (in the types of insurance and the
jurisprudence of Islamic financial transactions), the IIC will seek to capture
the reality of the Islamic insurance industry. It will set a comprehensive vision
of the industry’s future and will ensure the development of the Sharia and
legal rules governing the Islamic insurance industry. These efforts will lead
to the sustainable growth of Islamic insurance companies and global Takaful
asserted that the Insurance Authority will organize this international
conference amidst the growth and increasing penetration of the Islamic
insurance industry in the UAE, the region, and international markets. This
growth is largely due to a rising demand for the products of Islamic insurance
by large segments of customers in all markets of the world.
UAE in particular, and the region in general, have seen a strong growth in this
industry during recent years, leading experts to form an optimistic image of
the future of this industry worldwide”, he added.
affirmed that in order to expand the desired scope of this industry, we need to
overcome the obstacles that hinder it. He indicated that it is important to
collectively set a comprehensive framework and vision of the future and look to
empower the industry from the legal, regulatory, and Sharia perspectives.
IIC aims to achieve a pool of objectives that will serve the Islamic insurance
industry, most importantly, by introducing the significant role that the
Takaful insurance sector can play in protecting the national economy. Other
objective include providing economic protection to the members of the society, improving
awareness, boosting the confidence of markets in Islamic insurance products and
Takaful services, and boosting growth opportunities for Islamic insurance
industry worldwide. These objectives can be achieved by setting legislation and
laws that promote development from the legal and Sharia perspectives.
IIC further aims at detect the real challenges that the Takaful insurance
industry faces, pinpoint the methods and tools needed to face and overcome these,
and state the ways of developing the security which is provided to clients by
Takaful insurance companies. The IIC also aims to expand the transparency of
Takaful insurance company operations, in order to create more links between the
company and the participants and thereby improve the general contribution made
by the insurance sector to GDP.
two days, the IIC will focus on many key pillars that address the reality of
the Islamic insurance industry and capture the challenges it faces, thereby
providing the current and future prerequisites of developing the industry. These
pillars represent a source of new perspectives on Takaful insurance activities
in the UAE, the region, and the world.
Other pillars include the Sharia principles and rules that serve as the foundation of Islamic
(Takaful) insurance, how to develop the Sharia principles and rules that govern
the relationship between the participants and the Takaful insurance company (in
terms of the security which is provided by the company to the participants),
the importance of codifying the Takaful sector, the importance of informing the
participants of the work progress made by Takaful insurance companies, how to
engage participants in the technical and financial controls they have over the
company’s business, governance in Islamic insurance companies, the technical aspects
of participants’ accounts (inputs, outputs, outcomes, and how to determine the
cost that the participants’ account is charged with), and the rules governing
the distribution of the surplus accrued by the participants’ account.
is worth mentioning that the Insurance Authority has recently issued resolution
number (26) of 2014 concerning the financial regulations governing Takaful
insurance companies. This resolution regulates the financial, technical,
investment, and accounting activity of public Takaful insurance companies in
issued regulations are consistent with the Takaful insurance regulation which were
issued by the Insurance Authority and are still applicable in the UAE. Furthermore,
they are consistent with the honorable Islamic Law. It can be demonstrated that
the policies required to be adopted in Islamic insurance companies are
consistent with the terms of the Principal-Agent (Wakala) model or the Wakala & Mudarabah
model. In addition, provisions related
to the distribution of the surplus accrued by Takaful insurance participants and
the importance of separating the assets of participants’ accounts from those of
shareholders’ accounts in the company are also consistent with Islamic law.
The issuing of
regulations represents an important turnaround in the development of the
regulatory principles and technical rules. These changes should develop the
performance of the UAE’s Takaful insurance market and protect the participants,
shareholders, and companies from the risks they may be exposed to in the future.
The rules achieve this by by proactively verifying the solvency of companies
and the integrity of their financial procedures.
financial regulations applicable to Takaful insurance companies include seven
key sections that address the financial, technical, investment, and accounting
aspects. These include the principles of investing policyholders’ rights, the solvency
margin and minimum guarantee amounts, the rules for calculating technical
allocations, the ways of determining the
assets of a company against the insurance liabilities that arise, the instructions
concerning the records that the company should create and maintain, the data
and records that should be presented to the Insurance Authority, the rules for
drafting the accounting books and records of the companies, agents, and
brokers, the ways of determining the data that should be listed in these books
and records, and the accounting policies and procedures that should be adopted
by the insurance companies.