The end of 2013 witnessed the announcement of a groundbreaking decree by Sheikh Mohammed bin Rashid Al Maktoum, the ruler of Dubai, regarding the creation of the Dubai Islamic Economy Development Center. This center constitutes a part of Dubai’s overall ambition to establish itself as a global hub for the Islamic economy.
This announcement will have a direct impact on the different sectors of the Islamic finance industry, including Takaful. It is a commitment from the government of Dubai to enhance the operational and legal conditions relating to the industry and making it more competitive and reliable.
We are looking forward to witnessing the development of the Shariah compliant finance sector during the course of 2014 in the UAE due to this unprecedented commitment from the ruler of Dubai to further focus on this sector of the financial industry and support Dubai to grow and compete with the international Islamic capitals such as London and Kuala Lumpur.
Apart from the above and in terms of the particular legal changes relating to the Takaful industry, we are expecting the UAE Insurance Authority to issue in the fi rst half of 2014 the new prudential regulations tailored for Takaful, including capital adequacy calculation, technical provisions, solvency margins and investments parameters. These regulations are expected to enhance the foundation of the stable and strong Takaful operators with sound financial abilities. They will also fi ll a huge gap in the existing overall insurance laws and regulations that are considered one of the main reasons behind the different shortfalls in the performance of the Takaful operators in the UAE.
On another note, preparations have now started for the next World Takaful Conference, due to take place in April 2014, which will gather a number of major Takaful and conventional companies. Topics of discussions during this event will include major critical challenges and prospects facing the Takaful industry and the ways to address such challenges with more efficiency.
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|Publication:||Islamic Finance News|
|Title:||Country report – UAE: 2014 – The year for Takaful|
|Practice:||Corporate and M&A, Banking & Finance|