IFSA Launched

Although the Islamic Financial Services Act (IFSA) is expected to see some takaful players, especially those with a composite licence, split their life and general operations, it has not deterred their gameplan to strengthen and grow their takaful business amid the growing and competitive Islamic insurance landscape.

The Financial Services Act (FSA) and the IFSA are likely to come into effect by mid this year and would, among others, require conventional and takaful insurers to relinquish their composite licences, and conduct their life and general insurance businesses under separate units or subsidiaries.

The new ruling could have a “huge impact” on insurance firms, especially takaful players like Syarikat Takaful Malaysia Bhd and Takaful Ikhlas Sdn Bhd. The impact would be felt more deeply in the takaful industry due to the higher number of composite licences issued to them compared with their conventional insurance counterparts.

The brokerage said, however, the rules would not apply to the four takaful companies that secured the latest family takaful licences in 2010. They four are AmFamily Takaful, Great Eastern Takaful, AIA-AFG Takaful and ING-Public Takaful Ehsan.