Sonali Life to be converted into an Islamic insurance business
Sonali Life Insurance's board of directors has decided to convert itself into an Islamic life insurance business from a traditional one.
The new generation life insurer would seek shareholders' approval in an extraordinary general meeting to be held on 23 March, according to a disclosure through the Dhaka Stock Exchange.
Islamic insurance operations, also known as Takaful, mainly embrace the principle of mutual cooperation and shared responsibility, instead of the traditional insurance business of risk transfer.
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In Takaful, participants pool their contributions to create a collective fund that is used to provide financial protection to members in case of unforeseen events such as death or disability.
Also, the funds are invested in a Shariah-compliant way and it is a trend nowadays in the financial services industry to convert into Islamic models in the Muslim-majority market.
However, Bangladeshi insurance clients have had bitter experiences with their favourite Islamic life insurers once -- Fareast Life -- as some responsible people embezzled gigantic funds of the company and it turned insolvent to pay back their clients.
Sonali Life shares having a face value of Tk10 each were trading at Tk63 apiece at 12:10pm on the DSE.
