On ICIF Representation – Rajya Sabha Report includes ‘Takaful’
New Delhi: The Rajya Sabha Committee on the Insurance Bill 2008 has included a paragraph on the ‘Takaful’ system of insurance, informs Mr. H. Abdur Raqeeb, Secretary of the Indian Centre for Islamic Finance, New Delhi.
He stated that the ‘Takaful’ system is based on the mutual co-operation, responsibility, assurance, protection and assistance between groups of participants and across the globe 26 to 33% of insurance comes from such mutuality and cooperation. He suggested that in addition to the conventional system, the other systems of insurance viz.‘Takaful’ should be also allowed to promote competition, diversity and to stop fraudulent activities that has been reported in conventional insurance business.
He submitted that homogenization of insurance industry is not good for the country and all kinds of structures and products that are possible to help financial inclusion of people must be looked into. The representative pointed out that the GIC is offering Islamic Insurance in the middle-east countries and is doing good business there. He however added that before its introduction, the aspect of regulatory gap may also be looked into, as many insurance companies are offering products without registration. He suggested the hybrid model of Islamic insurance existing in almost 75 countries, especially in the middle-east, which can bring huge investments in the country from a large number of Islamic Insurance Companies, must be explored.
The proposal for the Rajya Sabha committee was jointly prepared by Dr. Shariq Nisar, Thanveer Mohiyuddeen, both trustees of ICIF and Wahab Masood of AIIRM. Some of the select members have privately acknowledged that the proposal was interesting as well as innovative.