The London market has taken a significant step forward in its plans to deliver Sharia-compliant capacity for Islamic commercial risks with the Islamic Insurance Association of London (IIAL) launching a set of Guiding Principles for the provision of Sharia-insurance.
The principles, will be unveiled at the Lloyd’s Old Library this morning at an event which will see Economic Secretary to the Treasury, John Glenn, give the UK Government’s backing to the initiative and call on the market’s brokers and underwriters to engage with Islamic businesses worldwide.
The principles have been endorsed by two of the UK’s leading Islamic scholars and set out a framework for the market’s underwriters to create Islamic windows through which they can deliver sharia-compliant insurance and reinsurance capacity.
Currently, if Islamic insurers and businesses cannot source Islamic re/insurance products they are able to use conventional products under the “necessity” rule. However Islamic (takaful) insurers have, for several years, been publicly voicing their disappointment and frustration around the lack of meaningful levels of retakaful capacity.
IIAL Chairman Max Taylor said: “The Principles have been designed to deliver a certainty to both those operating in the market and, more importantly, Islamic clients across the world.
“London has always prided itself in its reputation for innovation, expertise and integrity. These principles will enable underwriters and brokers to be confident that of they adopt the steps with the principles they will be able to deliver Sharia-compliant capacity. Clients will also be assured that the products they are buying are Sharia compliant and their premiums are handled in a way which meets the requirements of Islamic rules.”
He added: “This is not only a huge opportunity for London to access new risks, and new markets, but also it has wider implications. Much has been said about the global protection gap. Some of those issues are around those policyholders who are excluded from accessing insurance on religious grounds. We hope the market and Islamic business will seize the opportunity and insurers can play their part in the UK government’s efforts to make London the leading global centre for Islamic financial services outside of the Islamic nations.