IFSB has adopted a set of guiding principles for Retakāful, (Islamic reinsurance) following consultation on the new standard (see FReD 13 November 2015). IFSB-18 sets out a set of basic principles and best practices on Retakāful activities of both Takāful and Retakāful operators. In particular, the objectives of IFSB-18 include:
- to provide a basis for regulatory and supervisory authorities (RSAs) to set rules and guidance on the operational framework of entities undertaking inward Retakāful activities;
- to outline a basis for RSAs to supervise Takāful and Retakāful undertakings’ use of outward Retakāful arrangements; and
- to suggest recommended best practices for Retakāful and Takāful operators and their RSAs to help address regulatory issues concerning Retakāful.
(Source: IFSB adopts Retakāful principles)