Insurance Commission Circular Letter No. 2022-04, Baseline Regulatory Framework for Takāful Undertakings

The Guidelines apply to all existing and authorized insurance companies and mutual benefit associations that will set up Takāful window. Takāful is a mutual guarantee in return for the commitment to donate an amount in the form of a specified contribution to the participants' risk fund, whereby a group of participants agree among themselves to support one another jointly for the losses arising from specified risks. 

The Guidelines require Takāful operators to establish a comprehensive governance policy framework and maintain procedures for compliance with anti-money laundering and anti-terrorism laws, rules, and regulations. The Guidelines further require approval of the Insurance Commissioner for the issuance or delivery of products by the Takāful operator. The Guidelines also impose solvency and capital adequacy requirements, reporting standards, reserve liabilities, and disclosure requirements.