Kyrgyzstan to Launch Takaful Islamic Insurance Service

The introduction of Islamic insurance, Takaful, is planned in Kyrgyzstan. Marat Pirnazarov, head of the Service for Regulation and Supervision over the Financial Market, announced this during parliamentary hearings on the draft law "On Insurance and Insurance Activities."

According to him, this is being done because there is demand among the population for such services, The Caspian Post reports citing 24.kg.

It should be noted that traditional insurance is based on the concept and practice of charging interest. In Islamic insurance, part of the participants’ contributions is considered a donation. Therefore, policyholders in Takaful are called participants.

Takaful is an Islamic insurance system based on the principles of mutual assistance and justice. Unlike traditional insurance, which assumes a commercial basis and profit-making, Takaful operates on the principle of collective responsibility and risk distribution among participants.

Takaful is divided into two types: general (property insurance) and family (personal insurance).