BAKU, Azerbaijan, September 23. Kazakhstan plans to create additional conditions for the development of Islamic insurance, the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market said.
“The program for the development of the insurance market until 2030 provides for an initiative to create additional conditions for the development of Islamic insurance (takaful) and expand the range of insurance products that comply with Sharia principles,” the agency said.
One of the key areas will be the development of an “Islamic windows” mechanism, which would allow existing insurance companies to offer Islamic insurance products without establishing a separate insurance company.
The legal framework for the development of Islamic insurance has been in place in Kazakhstan since 2015. However, specialized Islamic insurance companies have not yet been established in the country, while takaful products have not gained widespread use.
“One possible reason for this situation is the need to establish a separate legal entity and obtain a separate license to conduct Islamic insurance. In this regard, it is proposed to consider the possibility of using the ‘Islamic windows’ mechanism, under which existing insurers will be able to develop takaful activities within their existing organizations,” the agency said.
At the same time, Islamic insurance activities will be separated from conventional insurance. Separate accounting will be maintained for participants’ funds, assets, liabilities, income and expenses, while takaful fund assets will be invested in assets that comply with Sharia principles.
According to the agency, the activities of an Islamic window will be carried out in compliance with Sharia governance requirements and relevant regulatory supervision.
The development of the product range is planned to take place in stages, taking into account actual demand and market readiness.
At the initial stage, basic family and general takaful products may be offered, including life insurance, accident insurance, motor insurance, travel insurance and health insurance.
The range may subsequently be expanded to include savings-based life insurance, critical illness insurance, property insurance for individuals and businesses, liability insurance, as well as more complex investment, pension and corporate products.
