Download - Global Islamic Financial Forum 2014

Regulating the Retakaful Industry:
Malaysian Experience
Global Islamic Finance Forum
Sasana Kijang, Kuala Lumpur
2 September 2014
Wan Mohd. Nazri Wan Osman
Director
Islamic Banking and Takaful Department
Snapshot of Malaysian Takaful & Retakaful Industry
MARKET
STRUCTURE
TOTAL ASSET
PENETRATION
RATE
14.1%
11 Takaful
Operators (TOs)
4 Retakaful
Operators (RTOs)
Takaful - RM
25.17 billion
Retakaful – RM
1.4 billion (as at
Dec 2013)
NET
CONTRIBUTIONS
MARKET
SHARE
10.3%
AVERAGE
GROWTH
Family –
14.7%
General –
9.1%
Family Business –
RM 1.13 billion
General Business
– RM 0.41billion
Source:
BNM Islamic Finance Handbook – Q1 2014
BANK NEGARA MALAYSIA
CENTRAL BANK OF MALAYSIA
2
Overview of Malaysian Regulatory Framework
Islamic Financial Services Act 2013 (IFSA)
OBJECTIVES
Promote financial stability & compliance with Shariah
Strengthen regulation of Islamic financial institutions (IFIs)
Protect the rights and interests of consumer services & products
IFSA enables more comprehensive regulation and supervision of
the takaful and retakaful industry
AREAS of COVERAGE
Shariah governance
Prudential requirements
Business conduct & consumer protection
Financial groups
Intervention & remedial actions e.g. winding
up
Malaysia’s approach to Takaful & Retakaful regulation
Leverage on established field of conventional system
• Regulatory framework for insurance/ reinsurance broadly applicable, but requires
adaptation to be more takaful/ retakaful-attuned
Specific rules to address takaful peculiarities
• Shariah-compliant in all aspects of the takaful & retakaful operation
• Balance between interest of shareholders & participants
• Separation of funds between shareholders & (re)takaful fund
BANK NEGARA MALAYSIA
CENTRAL BANK OF MALAYSIA
3
Focus areas to facilitate growth of retakaful
Harmonising regulatory requirements across
jurisdiction
Clarity in retakaful contract wordings
• IFSB working group on Guiding Principles for Retakaful
Undertakings
 harmonise regulatory framework across different
jurisdictions and practices
 Coverage - governance, prudential, transparency
& disclosures and Shariah compliance
• Industry initiative to ensure contract wordings fully
reflect the underlying retakaful model and in line with
Shariah
 Clarity on actual participants of retakaful
arrangement
Enhancing expertise and talent
Expanding capacity for non-traditional risks
• Structured retakaful awareness/ technical programme
for Shariah scholars to increase understanding on
retakaful and its technical aspects
• Pooling / sharing of experience to enable RTOs to build
sizeable retakaful fund and have expertise to
underwrite volatile risk
BANK NEGARA MALAYSIA
CENTRAL BANK OF MALAYSIA
4
2014 GIFF – Takaful Roundtable
THANK YOU
BANK NEGARA MALAYSIA
CENTRAL BANK OF MALAYSIA
5

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