Insurance companies that operate Islamic insurance windows need to finalise a number of studies before separating or spinning off their shariah business units.
Mr Ahmad Syaroni, chairperson of the Indonesian Shariah Insurance Association (AASI), said that there are six studies that need to be undertaken by the insurance companies. These revolve around the business and strategic plans; capital; legal matters; licensing; information technology and human resources, reported Bisnis citing Mr Ahmad.
"After all the studies are carried out, the conclusions are only two -- whether the shariah business is worth spinning off or not," Mr Ahmad said.
The requirement to spin off shariah insurance units is spelt out by the law passed in 2014 concerning “Business Licensing and Institutions of Insurance Companies, Shariah Insurance Companies, Reinsurance Companies and Shariah Reinsurance Companies”. The regulations state that Islamic business units must be separated from conventional business no later than 2024.
In terms of human resources, Mr Ahmad said that insurance companies must map out their manpower and corporate organisation. They need to provide certainty relating to staff positions and pay in their new takaful companies.