The Role Of Takaful In Insurance Companies Operating In Uzbekistan: Institutional Preconditions And The Malaysian Benchmark

Abstract

This article examines the role that takaful may play within the opera- tions of insurance companies currently active in Uzbekistan. The insurance market of Uzbekistan has been characterised throughout its development by low penetration, a weak voluntary segment and a persistent deficit of household confidence in long-term financial intermediation. A portion of unrealised demand originates not from an ab- sence of insurable interest but from religious objection to the structure of conventional insurance contracts, and takaful addresses precisely this segment. Integrating the reg- ulatory literature on Islamic insurance with the development trajectory of the national insurance market, the study argues that the realistic entry route in present conditions is not the establishment of standalone takaful operators but the introduction of takaful windows within existing licensed insurers, and it specifies the institutional conditions under which such windows retain substantive rather than nominal compliance. The Ma- laysian framework, which regulated takaful through dedicated legislation from 1984 and consolidated it under the Islamic Financial Services Act of 2013, serves as the reference benchmark. Findings indicate that the credibility of a takaful segment is determined by the genuineness of fund segregation and the independence of Shariah supervision rather than by product design.