PROVIDE LEVEL PLAYING FIELD...!
SYED ADNAN HASAN
Aug 20 - Sep 2, 2012
The scenario seems no less than the one where someone is allowed to join a race with just few steps from the finishing line. It even resembles with when a player is given a chance in the national team for reasons of his relation with one of the members of selection committee.
A word file in my laptop is full of such examples but I consider the above one's to be sufficient enough, describing an unethical allowance of Takaful Windows for conventional insurers. Though I have just started my career in the context of writing articles, but do understand the term competition better than my seniors. It is fair competition that is fruitful for the economy, not one which the rest are talking about.
Insurance companies using their existing corporate structure and branch network for takaful windows would actually crush existing takaful operators. With there being no barrier to entry, the prospective new entrants into the industry in the form of takaful windows would run away with the show, making use of the low cost of entry. It would just need them to accommodate the takaful staff in their already built offices and allowing some of their budget for related training. Here comes for you the new takaful operator in a minute or two, "is this what we call fair competition?"
Let me make it simpler, it's just like student "A" making efforts since the start of the term to achieve best grades and student "B" being a failure throughout, passing with flying colors in the final term. Readers might call "B" to have got serious during the final days resulting in improved results, but believe me it is not the case. His parents are simply influential. Put the existing takaful operators under the label "A" and the prospective takaful window operators as "B". How can one justify an unethical entry of those under "B" against the years of struggle by those under "A"? Provide a level playing field and let's see who rules.
My question to all Muslim readers, "will you be willing to refer/discuss your religious matters with a religious scholar of some other belief/religion who also knows something about Islam"? Your answer would undoubtedly be no even if that person knows 100% Islam. It is your satisfaction which is important and in case of takaful products, it can certainly be achieved with your direction towards well established takaful operators (The Experts) operating under the supervision of dedicated Shariah Advisory Board, not those with two bags in hands, one full of non - shariah complaint products and the other one with what they call would be shariah - compliant. What Business would these companies be committed to? How would one measure their commitment towards the cause of promoting takaful? Their commitment would simply be directed towards products/business which seems profitable irrespective of it being complaint or non-complaint.
One of the articles I read stated proudly about Pakistan to be the second country after Indonesia to officially allow takaful windows. The concerned author should note that being second only for an incorrect belief is not a good thing. Following examples set by nations adds value but the rational should be logical, in the best interest of your economy. Following this course the concerned would have to publish another one stating Pakistan to be the second nation after Indonesia, the regulator asking takaful window operators to turn into full-fledged takaful entities along with minimum paid up capital requirement.
An article named, "Market Profile - Indonesia: Takaful prepares to switch to higher gear" by Ridwan Abbas stated about the new insurance law asking the takaful window operators to turn into full-fledged takaful entities, the law is yet to be passed and the regulator is hopeful that it would be tabled in parliament by the end of the year. Kindly also note the subject of the article referred, it talks about switching takaful in Indonesia to higher gear by asking windows to change the status. Consider in this context the news rolled by SECP Takaful Rules 2012, the takaful windows if allowed would let everyone one comment, "Takaful in Pakistan started at top gear but the driver went asleep as they got on the right track". This would now result in a level playing field in Indonesia's takaful industry with takaful window operators being asked to set up takaful entities with minimum capital requirements. This is what we want in Pakistan to allow fair competition and witness who rules this sector in Pakistan.
"The new rule brings new jobs", one of my senior stated in his article. With due respect sir, please note that opening up a window can never create more jobs than setting up a new entity. With new windows been opened, the cost of common departments would be shared out and no related vacancies would be available. Setting up new entities would require a start from scratch, needing each department to be set up, therefore more jobs waiting to welcome the unemployed. Not only will the jobs be available through local investment but the foreign investment would play a major role. The performance of existing takaful operators in a short span of time has attracted many foreign investors but the only thing which makes them reluctant is the issuance of orders allowing the conventional insurers to operate takaful windows. Simply imagine the prosperity it would bring to Pakistan with foreign investment flowing in, all it needs is a logical think tank.
After having debated for the above 910 words, I hope I have made the point clear. This is not to win an argument but to witness a prosperous Pakistan. You might ponder as to how a correction in one industry would result in prosperity. What if I would have been thinking the same way, this single industry might have been overlooked, left to injustice. The first hearing of the case in respect of the petition filed against the new rule by SECP is scheduled for Thursday, August 16, 2012. There have been comments about very few chances for the existing takaful operators to resist against the giants in the industry. Let me add another correction as I go forward, those been called giants might be the ones in their own industry (Conventional Insurance), the giant in takaful industry is yet to be determined and the time will tell.
Finally let's put the stance together in order to ensure a level playing field. For conventional insurers to enjoy a takaful coaster ride must set up full-fledge takaful entities (as subsidiaries) with minimum paid up capital requirement to be decided by SECP and whatever other requirements which were needed to be satisfied by those who gave birth to this industry in Pakistan because SHORTCUTS ARE NOT ALLOWED.
I rest this case in the court of competent jury and plea for justice, Together we prosper.