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Etiqa, the insurance arm of the Maybank Group, is interested in introducing the Islamic insurance system “takaful” to the Philippines but Philippine officials said the country may not be ready for it.
Maybank, however, said it would bring takaful once it finds a Philippine Islamic bank to partner with.
The Insurance Commission said the Insurance Code may have to be amended to accommodate takaful, which Insurance Commissioner Dennis B. Fung said was not so easy to implement because “takaful funds cannot be commingled with other funds.”
“Even its terminologies are hard,” said Funa.
Funa said Etiqa and other insurers had offered to provide training on takaful in Malaysia to Philippine commission employees.
Fung pointed out last year that Islamic rules prohibit interests and investments have to be made in so-called sukuk bonds which are not covered by existing Philippine regulations.
Chris Eng Poh Yoon, chief strategy officer at Etiqa Insurance and Takaful in Malaysia, told reporters on Wednesday, Oct. 23, that they the company was interested in entering the Philippine market “once there is an established Islamic bank that has access to the Muslim population.”
Etiqa currently sells takaful in Malaysia through Maybank as well as an agency force, which it lacked in the Philippines, Eng said.
While the Philippines has Al Amanah Islamic Bank—the only lender allowed to offer Islamic banking in the country—its reach was only “small,” according to Eng.
In Malaysia, Etiqa sells takaful to Muslims and non-Muslims as it appeals to customers who preferred products with lower risk and with profit-sharing, Eng said.
Eng said clients who don’t make claims on their insurance under takaful are entitled to profit shares.
If the Philippine market would be ready for takaful, Eng said Etiqa was likely to offer packages starting with small premiums like personal, accident and fire insurance./TSB