Sunday, October 19, 2014
The Insurance Authority organizes meetings for the four working groups of the Islamic Financial Services Board (IFSB) in Dubai
Abu Dhabi on September 27, 2014
The UAE hosted the meetings of four Islamic Financial Services Board (IFSB) working groups from September 28th until October 1st, 2014.
The Insurance Authority organized these meetings in Dubai, as part of its endeavors to boost its strategic objectives: to develop the UAE’s insurance sector and to promote the UAE as a regional and global insurance hub.
H.E. Ebrahim Obaid Al Zaabi, Director General of the Insurance Authority, asserted the importance of holding meetings like these in the UAE. He claimed that hosting meetings boosts the country’s global position as a hub for Islamic economic practice (such as Takaful insurance). He spoke about the massive efforts being made by the IA to develop the Islamic insurance industry in the Emirati market from legislative, efficiency, sustainability, and precautionary perspectives. Its modern and state-of-the-art approach is consistent with the rules and principles of the tolerant Islamic Law, allowing existing Takaful insurance companies to continue in business and compete in local and international financial markets.
Al-Zaabi pointed out that the IA pursues the development of the Takaful insurance regulations it issues, and aims for the completion of the legal and jurisprudential rules that guide the path of Takaful insurance in the UAE. He noted that the number of Takaful insurance companies in the Emirati market has increased to ten companies, with premiums of nearly AED2.8 billion. This sum constituted 9.3% of the total size of the local insurance market in 2013.
Al Zaabi commended the significant role of the EFSB in developing Islamic financial services. Its efforts have developed the performance of Islamic financial institutions at the global level.
The agenda of the IFSB meetings included four sessions: the working group concerning partial Takaful insurance, the working group on guidelines for re-Takaful, the working group on the core principles of Islamic financing systems, and a meeting of the sub-committee concerning the quantitative measures of liquidity risk management.
These meetings represent an interactive forum that allows communication between key players in the Islamic financial services industry (IFSI), allowing them to exchange views and experiences. Attendants were also encouraged to come up with recommendations that allow effective practices to thrive in the area of Takaful insurance in particular and Islamic financial services in general. The agreements made also included the adoption of a comprehensive and clear approach to developing the Islamic insurance sector and sectors related to capital markets and the Islamic market. Adoptions like these ensure the achievement of a comprehensive and sustainable economic growth that can be used to face off future challenges.
It is worth mentioning that the IFSB is an international board which was established by a group of states and members of the Islamic Development Bank. It aims to issue guiding and supervisory standards which govern the businesses and activities of financial services institutions in line with the rules and principles of Islamic Law.
The IFSB aims to boost the strength and transparency of Islamic financial services by providing new standards or by adopting standards which are currently effective at international levels (and which are also consistent with the principles of Islamic Law). It also aims to provide general guidelines for effective supervision mechanisms and supervision methods in institutions that provide Islamic financial products. The IFSB aims to communicate and cooperate with the relevant international organizations that set the standards required for the stability and rigidity of the international monetary system and financial systems. It also has the objective of improving initiatives that can develop efficient processes and risk management mechanisms and procedures.