Act on Islami Shariah-based insurance unlikely

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Jasim Uddin Haroon
The government is unlikely to frame any act covering Islami Shariah-based insurance policies operated by the country's insurance companies.
The council of advisers recently dropped from its agenda the draft act on operating Taqaful policies.
Earlier, the Ministry of Commerce (MoC) sent three separate drafts relating to insurance companies to the council of advisers, aiming to streamline the regulatory process of the country's insurance business.
The drafts are Insurance Ordinance 2007, Independent Insurance Regulatory Authority Ordinance 2007, and 'Taqaful' Ordinance 2007.
The council of advisers approved two drafts excepting the Taqaful Ordinance 2007.
The approved drafts are now lying with the Ministry of Law, Justice and Parliamentary Affairs for its vetting.
However, according to Chief Controller of Insurance (CCI) Mahfuzul Haque, the proposed act covering Taqaful insurance is now in abeyance.
"We will pursue later approval of the act as there are a good number of Islami Shariah-based insurance policy holders," the CCI told the FE Monday.
Currently, there are six insurance companies operating Islami Shariah-based policies directly and around 12 others also offering such products.
Sources said the insurance companies are in favour of giving a complete legal coverage to the Islamic Shariah-based insurance policies.
Only a few insurance companies are in operation under Taqaful, and more such acts are necessary for sustainable growth of the business.
"Currently, we are neither following strictly the model of Islamic insurance in Malaysia nor in Saudi Arabia", the BIA chief, who is also managing director of the Progati Insurance Company Limited, added.
Currently, the insurance companies are operating their business under conventional Islamic laws through the Shariah Board.
Sources at the CCI said the insurance companies, currently operating Islami Shariah-based policies, will be able to continue their functioning until framing such an act for them.
The immediate past BNP-led government took a move for upgrading the insurance acts in 2005.
Under the initiative, an eight-member experts' committee, led by the then CCI, proposed the three separate draft laws on insurance on December 26 of the same year.