Malaysia has been one of the leading countries on takaful globally, with a separate takaful regulations (the Takaful Act) to the conventional insurance regulations that was established in 1984. Since then, the market has grown significantly with more than 10 takaful operators in the country. The regulations for takaful have also evolved rapidly and Malaysia is the first country to issue a Risk-Based Takaful Framework for Takaful.
In recent years, there have been many developing takaful markets, such as Indonesia, with one of the largest Muslim population in the world. One of the key components in encouraging the growth of takaful markets is regulations. Regulations play a significant role in determining whether takaful is simply a name change of conventional insurance or develops into a different offering to the consumer.
Actuarial Partners have written an article looking at Malaysia’s approach to regulating takaful and the possible lessons for Indonesia and other markets.
The key lessons learnt from the Malaysia experience include:
For further details, the article is available here.
If you wish to discuss this article further, please contact the author of the article at Zainal Kassim.