Pakistan's Islamic Insurance Rules In Limbo After Court Hearing

Pakistan’s Islamic Insurance Rules In Limbo After Court Hearing

Pakistan's conventional insurance firms will have to wait a few more weeks to learn if they can open takaful, or Islamic insurance, windows after a state court on Thursday adjourned a case challenging new regulations for the sector.

August 19, 2012 8:07 by Reuters

Pakistan’s five takaful operators filed a petition in a court in Sindh province, the country’s second-largest Islamic banking market, to protest the rules which allow conventional insurers to offer takaful services.

“The court has been adjourned, a date has not been fixed yet,” said Vaseeq Khalid, senior associate at law firm Mohsin Tayebaly & Co, which represents the takaful firms.

Khalid, speaking from Karachi, said the next hearing could be in two to three weeks, while the court’s initial injunction blocking the rules remains in place. On Thursday, the court handled administrative procedures related to the matter.

The new rules, launched last month, would make Pakistan the second country after Indonesia to officially allow takaful windows, which enable firms to offer sharia-compliant and conventional products side by side, provided client money is segregated.

The rules also call for a centralised supervisory board to monitor all takaful operators, including windows. Takaful is seen as a bellwether of consumer appetite for Islamic finance products. (Editing by Amran Abocar)