Under the patronage of Mansour bin Zayed… Abu Dhabi Islamic Insurance Conference to be inaugurated by Minister of Economy

: 3/8/2015

Under the patronage of Mansour bin Zayed… Abu Dhabi Islamic Insurance Conference to be inaugurated by Minister of Economy

 

  • Al Mansoury: the United Arab Emirates is superior on the Arab and Regional scales in organizing Takaful insurance industry

  • Al Azhar undersecretary: it is required to bring advantages of Islamic economy into view and increase the effectiveness and technically and professionally support Takaful Insurance

  • Al Zaabi: 3 billion dirhams are the amount of investments made by 11 Takaful insurance companies in UAE and 2.3 of their capitals

 

Abu Dhabi on 8 March 2015:

 

Under the patronage of Mansour bin Zayed Al Nahyan, the deputy prime minister of the United Arab Emirates, minister of presidential affairs, events of Islamic Insurance Conference have been launched at Abu Dhabi on (Sunday). This conference is organized by Insurance Authority for two days (in St. Regis Hotel – Abu Dhabi Corniche) under the motto "Reality and Prospects for the Development of Islamic Insurance Regulations". Moreover, regulatory and supervisory bodies, companies, experts and specialists in the Arab world and the Muslim world, in addition to organizations and councils specialized in Islamic financial services around the world will participate in this conference.

 

 H.E. Eng. Sultan bin Saeed Al-Mansouri, Minister of Economy and the Chairman of the Board of Directors of Authority has confirmed in the opening speech that the wise leadership of H.H. Sheikh Khalifa bin Zayed Al Nahian, the President of UAE, is devoted to achieve the comprehensive development in all fields through science and knowledge, in addition to receptiveness to economic, financial, human sciences and world cultures.

 

Al Mansoury added that coping up with scientific development and the approach of development and modernization followed in all fields have a great impact on considering economic development in general and insurance development in particular as priorities at the state level for the purpose of promoting economic growth, in addition to upgrading and insurance care services in order to be in accordance with the best international practices.

 

Furthermore, he states that holding this important conference represents the economic development which UAE witnesses, and reflects achievements of Takaful insurance industry in UAE and the region in terms of significant growth and spread lately. Transactions under Takaful Insurance Industry have exceeded markets of Arab and Islamic worlds to reach world markets.

 

H.E. Al Mansoury also delivered greetings of Conference Sponsor H.H. Sheikh Mansour bin Zayed Al Nahian and his wishes of success to participants and conference.

 

Abu Dhabi is the symbol of tolerance and brotherhood

 

H.E. has pointed out to the importance of holding this conference in the capital Abu Dhabi, which is the symbol of tolerance, brotherhood and upholding values of love, in order to search for modern tools and methods for achieving a significant start in the path of developing Islamic insurance industry and Takaful industry in general.    

 

Besides, H.E. Al Mansoury has discussed the Islamic insurance experience in the United Arab Emirates, stating that: "speaking about Islamic insurance experience in world leads us to discuss UAE experience as being one of this experience's makers worldwide.

 

United Arab Emirates is superior in organizing Takaful insurance:

In addition, Al Mansoury has explained that when following up the path of Islamic insurance in UAE, we will notice that UAE is superior on the Arab and regional levels in organizing Takaful insurance industry. Insurance Authority has issued in the past few years a package of legislations and resolutions to organize Takaful insurance companies, among which is Takaful Insurance System which is regard as the first of its kind in the Arab world and the most comprehensive on the level of the Islamic countries.

 

Al Mansoury has added that Insurance Authority took the initiative at the end of 2014 to issue financial instructions organizing financial, technical, investment and accounting activities of Takaful insurance companies, which aim at protecting the rights of Takaful insurance subscribers, and protecting the companies from future risks. This matter gives UAE superiority in the Middle East in adopting the latest requirements of measuring financial adequacy in simulation of the European model.

 

H.E. indicated that within the continued economic growth in UAE and the flow of foreign investments, Insurance Authority examines many steps and procedures that aim to complement and enhance the legal and jurisprudential rules of Takaful insurance path in UAE, and push it toward more development and progress.

 

Islamic insurance is a supportive tool for economic growth

 

H.E. has confirmed that Islamic insurance industry represents a basic pillar of Islamic economy, and a tool to increase social stability and economic growth in Islamic countries.

 

Moreover, Al Mansoury has explained that the most prominent achievement of Takaful insurance is represented in the success of Takaful insurance in coping up with contemporary developments in the field of financial transactions, providing appropriate alternatives and holding all the requirements of economic life and its variables, in addition to facing crisis and challenging without prejudice to the controls of Sharia.

 

Optimistic and bright image

 

Al Mansoury has also mentioned that this success pushed experts, specialists and stakeholders to draw an optimistic picture of the UAE future, regionally and globally.

 

This bright image, he added, does not mean to turn a blind eye to many of the major challenges and huge constraints that limit the Takaful insurance thought on the technical and Sharia basis. Otherwise, we should work together in order to promote the success of this industry basis and strengthening it from the legal, regulatory and sharia aspects in order to deal our countries to highest levels of progress and prosperity. At the meantime, we should develop a comprehensive vision for the future and seek to find solutions and put them into effect to overcome challenges and difficulties.

 

H.E. has stated that Islamic insurance industry has significant opportunities for growth and spread globally, pointing out that holding this conference emphasizes the significance of moving forward for developing Takaful insurance industry, particularly within the economic growth and the enormous opportunities that are accumulated in markets of our countries.

 

Furthermore, Al Mansoury hopes that the beginning of the new stage in the development of the global insurance market which is in conformity with the provisions of Islamic Sharia will start from Abu Dhabi and through this conference. Therefore, this could benefit markets of Muslim countries and their economies.

 

Speech of Al-Azhar Al-Sharif

 

The opening session also included the speech of Al-Azhar Al-Sharif, which has been delivered by Dr. Abbas Shouman, Al-Azhar undersecretary, who emphasized the fact that Islamic Sharia is a complete system which includes all aspects of life and benefits of people in matters of life and religion. 

 

Dr. Abbas, Al Azhar’s undersecretary figured out that Islamic Shariah calls for solidarity and cooperation, indicating that Zakat and handouts represent investment for the whole nation, development for the rich’s funds and relief for the poor.

Dr. Abbas emphasized on the necessity of highlighting advantages of Islamic economy. Furthermore, it is necessary to increase the effectiveness of Takaful Insurance system, support the same technically and professionally, expand the scope thereof and increase the advantages of such system, in order to replace other types of insurance, on which scientists/ scholars have different opinions.   

 

Proposal

 

In this context, Al Azhar’s undersecretary proposed to approve company system as a substitute for speculation system as a basis for the relationship established between participants and Insurance Company’s officials. Dr. Abbas expressed the hope that Islamic Insurance Conference held in Abu Dhabi shall conclude certain recommendations and proposals on part of scientists, intellectuals and attending economists for the purpose of upgrading and expanding the area/ space of Takaful Insurance for the benefit of Arab and Islamic comminutes.

 

New Vision for Works of Takaful Insurance:

 

Following the opening session, His Excellency Ibrahim Obaid Al Zaabi, Director General of Insurance Authority submitted worksheet entitled “New Vision for Works of Takaful Insurance in the United Arab Emirates, the region and the all world. Zaabi reviewed the reality of industry of insurance in the United Arab Emirates, the region and the whole world. Zaabi also reviewed prospects of development in addition to accomplishments achieved by UAE in the area of Takaful Insurance, opportunities available at markets and how to get benefit of such opportunities in the development of the said industry at the local level.     

 

The Growth of Takaful Insurance:

 

Zaabi refers to the remarkable growth of the Islamic insurance industry in the region and the world markets, despite being recently established. Zaabi figured out that the Gulf Cooperation Council states (GCC) have great contribution to the total size of Takaful Insurance globally. Zaabi confirmed that all figures and data indicate the enormous opportunities of growth in the sector of Takaful Insurance all over the region and the world.

 

Attractions:

 

General Manager of Insurance Authority reviewed the reality of insurance industry and attractions thereof. The General Manager pointed out the large growth in the sector of Islamic investment within the past two decades, besides the increase in the number of companies, the size of Takaful Insurance premiums regionally and globally, breadth of areas of work for Islamic insurance, posing new Islamic products and tools, sustain of awareness, turnout and popularity of Islamic financial products in addition to positive outlook on part of the relevant regulatory and legislative entities toward Takaful. Depending on the aforementioned, all global insurance companies are increasingly interested in establishing Takaful and re-Takaful companies.

 

A huge Market in the United Arab Emirates:

 

Zaabi stated: Insurance Authority is seeking to increase the size of Takaful Insurance markets, taking into account the importance of focus on the quality of companies, the significance of expansion in introducing insurance products and tools to the market, to make best use of the enormous opportunities in the world’s markets.

Zaabi stressed that the United Arab Emirates has a huge market for products of Islamic economy and Takaful Insurance. Furthermore, the initiative of “Dubai as a capital of Islamic economics” as well as the addition of sector of Islamic economy to Dubai economy’s pivotal/ central sectors provide companies with an ideal opportunity to invest in UAE markets, for the purpose of taking advantage of opportunities and benefits provided in all areas.

 

Insurance in the United Arab Emirates:

 

General Manager of Insurance Authority reviewed the reality of insurance market in UAE, indicating that the Emirati insurance market is deemed one of the largest insurance market all over the Arab world in terms of gross written premiums reaching about 33 billion dirhams during 2014 i.e. the growth rate is 12% comparing to 2013. At the same time, investments of insurance companies increased to 40 billion dirhams. The number of insurance companies working/ operating in the state becomes sixty companies. Meanwhile the number of companies having relevant occupations reaches about 313 companies.

 

Takaful Companies’ Capital of 2.3 billion dirhams:

 

In respect of Islamic Takaful Insurance, statistical data at the end of 2014 indicate the increase in number of Takaful Insurance Companies to 11 companies with total capital of 2.3 billion dirhams, meanwhile total investments thereof increased at the end of 2014 reaching 3 billion dirhams.

The significance of Takaful Insurance system issued on part of the authority shall be reflected as the said system has established legal and legitimate bases and principles required to organize works of Takaful Insurance companies in line with provisions of Islamic Sharia, including a number of central principles organizing works of Takaful Insurance. Most importantly, limiting and restricting the practice of Takaful Insurance works on Takaful Insurance companies, agency model or agency and speculation together, premiums paid for donation, Takaful/ solidarity accounts, the surplus of participants’ account, good (Hassan) loan, re-Takaful Insurance as well as legitimate oversight committees.

 

Financial Instructions:

 

Zaabi stressed that the financial instructions given to Takaful Insurance companies completed the structure established by provisions of Takaful Insurance system. Hence, Takaful Insurance became legally and regulatory organized in addition to financial and technical principles.

The financial instructions are purposed to protect rights of Takaful Insurance’s participants and beneficiaries of Takaful Insurance’s documents. Such instructions identify the technical and financial bases organizing the works of Takaful Insurance companies. The financial instructions are also purposed to limit underwriting and investment surges of Takaful Insurance companies. The financial instructions also maintain the continuity of solvency of Takaful Insurance’s companies, enabling the same to fulfill all commitments assigned thereto without exposing such companies’ financial position to any stumble, besides enabling insurance companies to achieve highly competitive evaluation and classification rates.

 

Overcoming Challenges:

Zaabi confirmed that achieving a prosperous future for the industry of Takaful Insurance globally depends on overcoming challenges and obstacles pertaining to regulatory and legal issues as well as challenges associated with not determining outstanding legitimate issues, challenges in terms of lack of experience, default in the development of products and expansion of services in addition to challenges may be confronted in the area of awareness development toward Islamic Insurance and Takaful in general.

 

Sharia (legitimate) Rules of Islamic Insurance:

 

The conference sessions began latter, whereas the first session focused on the legitimate rules and principles upon which the Islamic Insurance (Takaful) is established. The referred sessions are attended by Prof. Dr. Mohamed Abdul Rahim Sultan, Professor of Sharia and Islamic Studies at the UAE University, Mr. Saleh Abdul Ghaffar Al Hashemi, Managing Director of Takaful House, Dr. Mohiuddin Afifi Ahmed, Secretary General of the Islamic Research Academy at Al Azhar Al Sharif and Mr. Mohamed Hussein Aldshich, Chief Executive Officer of Re-Takaful Emirates Company.

Mr. Saleh Abdul Ghaffar Al Hashimi confirmed that Takaful is insurance concept complying with rules and regulations of Islamic Law (Sharia). Mr. Saleh Abdul Ghaffar reviewed features of Islamic Insurance representing in the fact that all contracts of Islamic Insurance must rely on sincerity of intention, in order to ease the burden on others, when confronting difficulties.

 

Developing legitimate (Sharia) Rules governing the relationship between Participants and Company:

 

The second session discussed how to develop Sharia (legitimate) rules and regulations governing the relationship between participants on one hand and Takaful Insurance Company on the other hand, regarding the security to be provided by such company to its participants. The second session was held with the participation of Dr. Musa Mustafa, Assistant Professor (teaching subjects of Islamic Financial Transactions) at the University of World Islamic Sciences, in the Hashemite Kingdom of Jordan. The session was also attended by Executive Member of Sharia’s Supervisory Board at Baraka Takaful Company, Mr. Jihad Fitrona, Director General of Dubai Islamic Insurance & Reinsurance Company (AMAN) as well as Dr. Ashraf Mohamed Hashim of International Academy for Research of Shariah in Malaysia.

In the paper/ report submitted on such axis (point), Dr. Abbas Schumann, Al Azhar’s undersecretary stated that Islamic economics has multiple and diverse applications. Islamic Insurance Companies shall represent such economy’s latest application, which has spread widely.

Dr. Abbas also emphasized that, when applying the company formula to Islamic Insurance Company, the participants shall in such case have the right to take part in choosing members of the board, choosing Sharia’a Supervisory Board, Controller as well as areas of investment allowing participants access to workflow in Islamic Insurance Company in terms of Shariah’s principles.

For his part, Jihad Fitrona emphasized that Takaful is interactive system to manage risks under Islamic Shariah. Such system relies on providing strangers with a helping hand in adversity. Mr. Jihad Fitrona called for developing the religious aspect in Takaful contracts through the creation of the Supreme Committee for Fatwa and Shari’a Supervision determined to be established in pursuance of Takaful Companies’ bill.

In turn, Dr. Ashraf Hashim called for the adoption of appropriate legal structure, enabling insurance’s participants to achieve purposes and objectives without allowing any party to resort to Courts to challenge the rights of beneficiaries.

 

The significance of codifying Takaful Sector:

 

The third session focused on the significance of codifying Takaful sector. The third session was attended by Dr. Jamal Sumaiti, Director General of Dubai Judicial Institute, Dr. Khalid Bin Abdul Aziz Al Janahi, General Council of Dubai Islamic Economy Development Centre), Dr. Salah Al Shalhoub, Faculty Member at Electronic Saudi University in Riyadh, adviser in Islamic finance for Insurance companies, investment funds and financial institutions as well as Mr. Mohamed Ajmal Bhatti, Chairman of Tokyo Marine Middle East Company.               

              

               

 

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