IFSB published an exposure draft (ED-25) for a standard on disclosures for Takāful/Retakāful undertakings (ED-25). The comment period for this exposure draft ends on May 25, 2020. The proposed disclosures standard covers both public and private disclosures for takāful/retakāful operators. IFSB is inviting comments from regulatory and supervisory authorities, international organizations, institutions offering Islamic financial services, academics, and other interested parties.
The exposure draft addresses the key disclosures that should be made public by takāful/retakāful operators with a view to market discipline. These disclosures are prudential and aim to ensure the soundness and stability of the industry. Public disclosures about environmental, social, and governance (ESG) issues operate in a broadly similar way and, in governance particularly, overlap with the prudential disclosures. The second area involves disclosures to participants and potential participants about the contract they are considering entering. The main objectives of the proposed disclosures standard are to:
- Facilitate access to relevant, reliable, and timely information by takāful market players and market participants, thus enhancing their capacity to monitor and assess the performance of takāful undertakings
- Improve comparability and consistency of all disclosures made by takāful operators
- Support financial consumer protection for current and potential participants by helping takāful operators to offer useful information disclosures on takāful products
- Enable market players to complement and support, through their actions in the market, the implementation of IFSB standards.
To encourage consistency in implementation of IFSB standards across jurisdictions, IFSB recommends that regulatory and supervisory authorities implement the standard in their jurisdictions effective from January 2023 onward, taking into account an adequate pre-implementation period starting from the issuance date of this standard for the standard to be embedded into national regulations and guidelines and, where applicable, implemented into supervisory practices. The level of implementation of the standard in a particular jurisdiction may be dependent upon, and be without prejudice to, the general legal framework of that jurisdiction. The regulatory and supervisory authorities are encouraged to implement the standard earlier than this date where they are able to do so.
IFSB, in line with its mandate, works to complement the prudential and supervisory standards issued IAIS by addressing the specificities of takāful with the aim of contributing to the soundness and stability of the Islamic financial system, particularly the takāful industry. This standard responds to one of the recommendations made in the paper titled “Issues in Regulation and Supervision of Takāful (Islamic Insurance),” which was published by a Joint Working Group of IFSB and IAIS.
Comment Due Date: May 25, 2020
Keywords: International, Insurance, ESG, Islamic Insurance, Takaful Operators, Disclosures, IFSB
EBA published a report analyzing the impact of the unwind mechanism of the liquidity coverage ratio (LCR) for a sample of European banks over a three-year period, from the end of 2016 to the first quarter of 2020.
In response to questions from a member of the European Parliament, the ECB President Christine Lagarde issued a letter clarifying the possibility of amending the AnaCredit Regulation and making targeted longer-term refinancing operations (TLTROs) dependent on the climate-related impact of bank loans.
IASB started the post-implementation review of the classification and measurement requirements in IFRS 9 on financial instruments and added the review as a project to its work plan.
FSB published a report that examines progress in implementing policy measures to enhance the resolvability of systemically important financial institutions.
EBA published a report on the benchmarking of national loan enforcement frameworks across 27 EU member states, in response to the call for advice from EC.
FSB published a letter from its Chair Randal K. Quarles, along with two reports exploring various aspects of the market turmoil resulting from the COVID-19 event.
RBNZ launched a consultation on the details for implementing the final Capital Review decisions announced in December 2019.
The Trustees of the IFRS Foundation, which are responsible for the governance and oversight of IASB, have announced the appointment of Dr. Andreas Barckow as the IASB Chair, effective July 2021.
HKMA issued a letter to consult the banking industry on a full set of proposed draft amendments to the Banking (Capital) Rules for implementing the Basel standard on capital requirements for banks’ equity investments in funds in Hong Kong.
ESRB published an opinion assessing the decision of Swedish Financial Supervisory Authority (FSA) to extend the application period of a stricter measure for residential mortgage lending, in accordance with Article 458 of the Capital Requirements Regulation (CRR).