TAKAFUL POOL PLANNED IN PAKISTAN

State controlled Pakistan Re-Insurance Corp (PRCL) is to establish a Takaful Pool to encourage Islamic insurance business, according to M Jamil Akhtar Khan, CEO of Takaful Pakistan Ltd. Speaking to local publication The News , Captain Khan said at a presentation on the subject of Takaful that his company would begin operations this week. Explaining the principles behind Islamic cover, he said that the management of the insurer acts only as an agent, the Wakeel, of the Waqf Fund. If there is a surplus in the fund at the end of the year, it is distributed to the participants, taking into account any claims benefits received. However, Captain Khan said that takaful companies faced a number of problems, one of which was a serious shortage of retakaful capacity. He said that quota share retakaful was the preferred mode, but non-proportional cover was also possible. A second problem for Islamic insurers was that they did not have as wide a range of investment possibilities as traditional insurers, which could restrict bottom-line performance.