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experts from Saudi Arabia commented that the insurance industry in the Kingdom is
relatively young and significant investment is required for human capital development
especially in training. The three experts share the sentiment that human capital
development is good for the industry and training centres and licensing of professionals
are commonly available. They said emphasis should be given to Takaful education in
universities and institutes.
8. How effective are the regulations andmarket practices on consumer protection, and
the mechanism of dispute resolution in the Takaful Industry?
The experts have expressed different experiences that varied with the jurisdictions in
the three countries they represent. Generally, however, they share the views that there
is room for improvement in terms of developing specific laws for the protection of
Takaful consumers and enhancing the awareness of Takaful consumers about their
rights and responsibilities. Five out of the six experts from Malaysia concur that
regulations in Malaysia broadly provide protections for consumers and there is no
specific provision for the Takaful consumers. However, the Islamic Financial Service Act
[IFSA 2013] provides a framework for the protection of Takaful consumers especially at
the solvency of Takaful. Thus, the infrastructure is already in place pending specific
laws. Meanwhile Takaful operators have complaint unit and online channels in place
operating 24 hours to receive customers’ complains. This unit is also monitored by Bank
Negara, the central bank of Malaysia. IFSA 2013 also has provisions for dispute
resolutions for the Islamic banking and Takaful industries.
Two of the three experts in Turkey relate that in 2007, the Insurance Law No. 5684 was
adopted to ensure the development of insurance in our country, to protect the rights
and interests of the persons involved in the insurance contract, and to ensure that the
insurance sector operates effectively in a safe and stable environment. In the meantime,
Article 30 of the same law provides for an insurance arbitration system for the
settlement of disputes arising from the insurance contract. Since 2007, the insurance
Arbitration Commission has been conducting proceedings and making decisions on
disputes arising out of the insurance contract, including insurance contracts in which
one of its parties is a consumer within the framework of the procedures and principles
laid down by the legislation. The two experts cautioned the low level of awareness
among the consumers about their rights and responsibilities regarding insurance, and
there is a dire need for remedying the situation.
Meanwhile two experts from Saudi Arabia share the view that at SAMA there is a strong
focus on consumer protection with various legislations supporting the same. The
introduction of Risk-Based Supervision (RBS) in 2010 provides additional focus on
consumer protection. There is also an insurance dispute resolution committee in Saudi
Arabia that is independent of SAMA. Furthermore, the insurance contract is supposed
to be fair in terms of rights and liabilities and provides protection for both contracting