Bank Negara will undertake further groundwork to strengthen the takaful industry and create an environment that fosters innovation, facilitated by a revised takaful operational framework.
Governor Tan Sri Muhammad Ibrahim said the revised framework would be published for consultation before the middle of the year.
“The revised framework will bring greater clarity on the use of multiple Shariah standards in the models and structures of takaful.
“We will also strengthen the governance of takaful operators, including how takaful funds are managed, to further safeguard the interest of takaful participants,” he said in his speech at the Takaful Annual Dinner and Awards 2018 on Friday.
Muhammad said the industry and public were welcome to provide feedback on the exposure draft.
On the objective of 25% family takaful penetration by 2020, he said it was ambitious, but achievable.
“However, at the rate it is growing, we will only reach 16 % in 2020, from the 14.8% today.
“This would be even lower if we were to correct for double counting of policies.
“Clearly, the data proves that takaful is still far below its full potential, and is nowhere near where it should be,” he added.
Muhammad noted that the industry was lagging in terms of migration to e-payments.
Last year, insurers and takaful operators issued 1.5 million cheques, while 5.7 million were collected from customers, he said, adding, cheques were very costly, inefficient and obsolete.
Muhammad revealed that Bank Negara was close to finalising changes to the regulatory framework that would enable online product aggregators to operate with broad access to the insurance and takaful market by year-end. — Bernama