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Guidelines and Policies for International Takaful

Guidelines and Policies for International Takaful

Under the Takaful Act 1984 (TA), an International Takaful Operator (ITO) is allowed to carry out non-ringgit composite (general and family) takaful business and re-takaful (Islamic reinsurance) business in Malaysia with non-residents in international currencies other than Malaysian ringgit.
 
The ITO is eligible for full tax exemption accorded under the Income Tax Act 1967 for ten years beginning from the year of assessment 2007.
 
Eligibility

  1. Well established and reputable licensed financial institution
  2. Adopts the international insurance practices set by the International Association of Insurance Supervisor or any other international standard-setting body, or adopts any other international best practices in the financial services related industry
  3. Regulated and supervised by a competent home regulatory authority
  4. Possesses a sound track record 

Capital Requirement and Registration Fees
 
An ITO can be established as an incorporated company or branch.

To operate as an incorporated entity, the requirements are:
1.     A minimum paid-up capital of RM10 million
2.     An annual registration fee of RM5,000
 
To operate as a branch entity, the requirements are:
1.     A minimum net working fund of RM10 million
2.     An annual registration fee of RM5,000
 
Scope of Business
 
The International Takaful Operator* (ITO) may carry out composite takaful (general and family) and retakaful business in foreign currencies with residents and non-residents within the permitted scope of business as stipulated below:
 

Takaful Business Non-Resident Resident
General Takaful All product lines  Any large and specialised risks on co-takaful basis with participation share not exceeding 20% in any one risk.
E.g. aviation, marine, energy, oil and petrochemicals, etc.
Family Takaful All product lines  Investment linked products (e.g. fixed income, equity and hedge fund investments) that are subject to a minimum contribution of:
RM20,000 in any foreign currency for a single contribution certificate; or
RM15,000 in any foreign currency for an annual contribution certificate.
Retakaful All product lines  All product lines 

 
For detailed information on the establishment of an ITO, please refer to the guidelines on the Establishment of an International Takaful Operator.