islamic insurance need regulations

Regulators are urged to force insurance companies who have sharia unit to spin-off in accordance with capital in accordance with the regulations.

Indonesia Islamic Insurance Association (AASI)’s chairman M. Shaifie Zein viewed current regulations are equivocal as many conventional insurance companies have a growing sharia unit.

He cited the company that manages Islamic finance with capital as much as IDR50 billion, IDR100 billion, even double, but is still counted as a business unit.

Besides, he added, there is no difference between a company that manages contributions (premiums) with sharia business with hundreds, even thousands of billions of dollars.

Shaifie suggested that insurance companies who have sharia units with specific capital to discharge their unit and become an independent company.

“For example, unit who has IDR100 billion or more capital or able to collect billions sharia premium, should be full place.”

It is important as the bigger premium obtains the higher risk exposure. In addition, with the separation, risk management can also be done with a more serious attempt. (T05/aph)