Takaful companies plan to dispose general biz
At least three Islamic insurers are considering disposing their general takaful business ahead of the Islamic Financial Services Act 2013 (IFSA), which comes into force next month. Among companies that are mulling the sale of their general takaful business are HSBC Amanah Takaful (Malaysia) Sdn Bhd, Prudential BSN Takaful Bhd and Hong Leong MSIG Takaful. The IFSA, which has been enacted but pending implementation, requires existing composite licence of insurers to be separated into two capitalised legal entities, namely life insurance or family takaful and general insurance. It has been reported that the minimum capital for each company will be RM100 million. However, most bank-backed takaful companies’ are not willing to pump the additional capital to set up a separate general takaful unit since the non-life segment is a small contributor to their overall business.