IslamicFinance.de

One of the most controversed issues in Islamic finance is around the initial capital of Islamic banks and takaful companies, especially when initiated by a conventional parent company.
Some people doubt the purity of the capital in Islamic banks and takaful companies and as therefor question whether these organisations are truly Islamic when their capital is not completely halal.
There are two points to be made in relation to this problem:
1. Money itself is not unlawful, but becomes prohibited through the way it is procured, if it's not in line with the Shari’ah law. Sin does not move with the money from one party to another.
2. Capital earned by the parent companies of Islamic banks may not be all from prohibited businesses. Part of the capital is supplied from individuals and permissible government and private organisations, therefore, it is possible that the funds arised only from permitted sources even if combined with prohibited income.

A.M. Best Co. has released its criteria report, "Rating Takaful (Shari'a Compliant) Insurance Companies." The report can be accessed at http://www.ambest.com/ratings/methodology.asp.
The updated criteria report takes into consideration the changes reflective in the Takaful market, especially regarding the increasing development of the regulatory framework within certain countries and the key issues relating to Takaful operating structures.

Takaful is coming out globally as a very viable model and being used successfully as engine of growth in a number of Muslim countries. The statement came from Chief Executive Officer Pak-Qatar Takaful, Pervaiz Ahmad while speaking at Lahore Chamber of Commerce and Industry.
He added that, despite of the fact that it is an untapped market, Islamic mode of banking and all its tools are fast gaining ground in Pakistan when compared to conventional mode of banking.
It seems that Islamic financing products such as Murabaha, Ijara, Musharaka and Islamic Export Refinance, etc, are catering to a diverse cross-section of the economy, including corporate, SME and consumer sectors.

AmTakaful has finally registered with Bank Negara Malaysia allowing it to start selling family Takaful products in the country.
Late last year The Islamic Globe reported on the signing of the shareholder’s agreement between Friends Life and AMMB Holdings.
The license for the JV was issued in 2010 after Malaysia’s 2009 announcement of the liberalization of its financial sector.

Kenya has blocked the licensing of new Takaful companies until a suitable law to manage them is completed. This gives Kenya’s existing Takaful firms the opportunity to grow unrestrained by new competition. But the regulator’s strategy risks losing its position as the leading IF hub in East Africa to neighbors Tanzania and Uganda, who have put no such restrictions on new local and foreign firms entering their markets.
At present Kenya’s insurance law does not admit Takaful as a standalone product, although the law empowers the IRA to launch ad hoc regulations authorizing individual operators on a case-by-case basis to sell Takaful products. The insurance law also does not permit companies to invest in offshore assets, locking out Kenyan Takaful entities from established capital markets in the Middle East and Asia.

AmFamily Takaful Berhad is determined to contribute towards the growth and development of the Islamic finance industry. AmTakaful is registered as a takaful operator by Bank Negara Malaysia (BNM) to continue family takaful business beginning with 9 January 2012.
Combining the expertise of its shareholders and Shariah principles and values, AmTakaful will be presenting a wide range of family takaful solutions to meet the evolving lifestyle needs of all Malaysians.

Allianz SE is searching to further develop its takaful, or Islam-compliant insurance, in the Asia-Pacific region, using its experience in Indonesia where it sees substantial market demand for comprehensive and affordable plans.
Kamesh Goyal, regional chief executive of Allianz Insurance Management in the Asia-Pacific, stated the fact that they are watching Malaysia very closely and would be ready to include takaful in their portfolio when the opportunity comes.

Bahrain’s BMI Bank has signed a strategic agreement with regional insurer Medgulf Allianz Takaful.
This agreement will allow the bank to present customers a suite of life and non-life Takaful products through its branch network.

Takaful Insurance for Africa’s largest shareholder, Cooperative Insurance Company (CIC) is admiring its decision to invest in Kenya’s first Takaful company.
CIC’s GM, Kenneth Kimani, noted TIA’s strong progress and the fact that Takaful in Kenya offers better opportunities for growth than conventional insurance. CIC owns 20% of TIA which saw more than $1m of premiums raised in the first four months of operations.

International Islamic (QIIB) chairman and managing director Sheikh Dr Khalid bin Thani al-Thani and Morocco’s new Prime Minister Abdelilah Benkirane discussed in a meeting the prospects of setting up an Islamic bank and an insurance company in the North African country.
They analyzed ways to further strengthen bilateral ties between the two countries with particular focus on Qatari investments in Morocco.
Sheikh Khalid proposed the opening of a joint venture Islamic bank and an insurance company in Morocco with majority participation (51%) by the North African country’s citizens and the remainder with Qataris (49%).

Barwa Bank has made a strategic partnership with Allianz Takaful, to become the first Islamic lender to offer a comprehensive range of Shariah compliant unit linked takaful products to customers.
The new product range contains children education, retirement, life takaful (life insurance / protection) and lumpsum investment plans.
A professional dedicated relationship manager will help the customers in selecting the best suited products taking into consideration their current and future financial needs.

Capital Market Authority (CMA) is developing a separate set of regulations for Sharia-compliant takaful insurance and Sukuk debt instruments.
Abdulla bin Salem Al Salmi, Acting Executive President of CMA, stated that the new regulations will be ready by the first quarter of next year. CBO, together with Ernst & Young, is currently defining a set of regulation, for Islamic banks.

Islamic Development Bank affiliate the Islamic Corporation for the Development of the Private Sector is helping to conduct a much needed Takaful offering to Azerbaijan through the development of a new Takaful company.
In order to manage this, ICD has included a local private partner for the first time in the form of Amrah Bank, Azerbaijan’s fifth largest bank.

Bank Simpanan National (BSN) has the purpose to aggressively grow its newly launched wealth management division by embracing the underserved takaful market.
Winston E. Jeyaprakas is the deputy chief executive of credit management and business support. He stated that they are looking for the wealth management division, which was launched in June, to provide between 12% and 15% to the bank's revenue by end-2012.
The divisions aim is to supply a full range of financial planning products and services to complement the overall business of the bank with further value-added products and services.

Takaful, or Islam-compliant insurance, operators will have to center the attention on underwriting quality, cost management and investment discipline as financial performance is still a challenge for many markets in the current fluctuating investment environment.
Marcel Omar Papp, head of retakaful at Swiss Re, stated that investment is one challenge for takaful operators, who tend to count on equities or real estate.
Takaful operators generally raise capital through debt, equity or decreasing risk. Papp added that most operators "seem to be well capitalized" as many companies have only been set up in the past few years and their business volumes are not yet important.

Saudi- based Alahli Takaful Company stated that it had assigned US law firm, King & Spalding as advisor to its SAR80m ($21.3m) rights issue and which opened for subscription.
The Takaful firm was originally searching a rights issue of 150% in February of this year, this was pared back to 80% in May and on Sunday at an EGM a 66.67% rights issue was approved by shareholders.

Boubyan Takaful Insurance Company signed a consulting services agreement with Protiviti for Risk Management aimed at supporting the Company's development.
Protiviti will determine the areas of focus and expand them with the management of Boubyan Takaful Insurance to include them within the services of the company, which will make sure that it is working according to the highest standards. The company will also designate a clear risk management, assessment and control strategy and launch an awareness campaign about risk for all its staff members.

It is possible that Legal & General Gulf Takaful will set up business operations in Malaysia at some point to meet the growing demand for takaful products. The statement came from managing director, Manfred Maske.
Land & General Gulf Takaful is a joint venture insurance company formed in 2009 between Legal & General Group and Ahli United Bank.

Despite previous high depletion of shareholders' funds due to start-up and early operational costs, Weqaya Takaful Insurance & Reinsurance Co.'s capitalization remains strong relative to risk.
Standard & Poor's Ratings Services announced that it has assigned its 'BBB' long-term counterparty credit and financial strength ratings to Riyadh-based Weqaya Takaful Insurance & Reinsurance Co. (Weqaya Takaful), with a stable outlook.

The Takaful industry in the UAE has had a remarkable growth over the last five years, with seven Takaful companies currently operating in the UAE and five new Takaful providers set to launch shortly.
Experts from the local Takaful industry discussed whether the rise of Takaful companies are improving or salvaging the local insurance market, at the 8th Middle East Insurex 2011.
The Middle East Insurex 2011 took place under the patronage of Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, Minister of Finance and Industry, U.A.E.