United Insurance applied for Window Takaful

United Insurance Company of Pakistan (UIC)has filed an application with Securities and Exchanges Commission of Pakistan (SECP) for permission to start Window Takaful Operation under Takaful Rules 2012.” Company start process for Window Takaful Operation. company made the necessary change in the Memorandum of Association to include Takaful business approved at the company’s Extra Ordinary General meeting held in June. United Insurance is third one who entered in Takaful,earlirJubilee Insurance and EFU General Insurance have entered the market as new Takaful player, as these are setting up window operations for selling Shariah-compliant insurance products. Although, window operations by leading conventional insurers will likely to capture Takaful market faster because these companies will take advantage from their existing infrastructure, new insurance companies will take five to seven years to reach the break-even point. The entry of conventional players is widely predictable to improve consumer participation in insurance sector as Takaful share in Pakistan’s total insurance market is currently estimated at less than 3 percent. Additionally, source said, the SECP has received five applications for Takaful windows and expected half of all conventional insurers in the country to apply for a license eventually. The government had initiated new Takaful Rules in 2012, allowing the use of Takaful windows, which facilitate insurers to offer Shariah-compliant and conventional products side by side, provided client money is segregated.
Takaful is a co-operative system of reimbursement in case of loss, paid to people and companies concerned about hazards, compensated out of a fund to which they agree to donate small regular contributions managed on behalf by a Takaful Operator. It is defined as an Islamic insurance concept which is grounded in Islamic muamalat (Islamic banking), observing the rules and regulations of Islamic law.
The principles of Takaful are policyholders cooperate among themselves for their common good. Policyholder’s contributions are considered as donations to the fund (pool). Every policyholder pays his subscription to help those who need assistance.