In order to develop a robust takaful sector, which can meet the risk mitigation needs of the masses and its commitment to develop the Islamic financial sector, the Securities and Exchange Commission of Pakistan (SECP) has allowed M/s SPI Insurance Company Limited, formerly known as Saudi Pak Insurance Company Limited, to start window takaful operations.
Previously, two conventional insurance companies were allowed to transact takaful business through window operations. Consequently, now the takaful sector comprises of eight takaful operators, out of which two are full-fledged family takaful operators, three full-fledged general takaful operators and three general window takaful operators. Currently, the SECP is processing one more application to start window takaful operations.
The takaful sector in Pakistan has yet to go a long way in fulfilling the risk mitigation needs of the masses. This would lead to an increase in insurance penetration and insurance density of Pakistan, which still remains to be among the lowest in the region.
The SECP’s decision to allow window takaful operations in Pakistan shall help in increasing the insurance base in Pakistan as the takaful sector, on a whole, shall be able to capitalize on the expertise, reach, capital base, relationships with reinsurers and brand image of the conventional insurers. The SECP is also ensuring that a proper Shariah-compliant mechanism is adopted by the window takaful operators.
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