AIG unit gets Malaysian Islamic insurance license

KUALA LUMPUR, Sept 22 (Reuters) - AIA Bhd, the Malaysian unit of American International Assurance Co (AIA), has been awarded Malaysia’s first international takaful (Islamic insurance) licence, the company said on Monday.

Hong Kong-based AIA is the life insurance unit of American International Group AIG.N, which was rescued by the U.S. government in an $85 billion bailout last week.

The licence, given by Malaysia’s central bank, will allow AIA Bhd’s unit, AIA Takaful International Bhd, to offer family and general takaful and takaful re-insurance in international currencies, it said in a statement.

Under Islamic insurance, members contribute to a pool of funds which is used to indemnify participants who suffer a loss.

The funds are invested according to the sharia, or Islamic law, which avoids interest-bearing loans and gambling, pork and alcohol-related activities. Profits made are distributed among members.

“It is significant step for AIA Bhd as we enter the growing Islamic financial market as a niche player offering consumers the choice of takaful solutions in international currencies,” AIA Bhd Chief Executive Khor Hock Seng said. (Reporting by Jalil Hamid, Editing by Lincoln Feast)