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NAICOM Releases Guidelines on Takaful Insurance September

29 May 2012

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Commissioner for Insurance, Fola Daniel

By  Nnamdi Duru  

The National Insurance Commission (NAICOM) said takaful insurance,  a platform for the protection of lives and properties based on risk sharing as against risk transfer would be opened to Nigerians who are interested in non-profit risk protection services.

The Commissioner for Insurance, Mr. Fola Daniel who confirmed this said the guidelines on takaful insurance would be released by the commission before the end of the third quarter of this year.

He also maintained that takaful insurance, which many believe  leans    towards Islam, would go a long way to help the industry deepen insurance penetration in the country.

Fielding questions at the ongoing said this in a chat with newsmen in at the ongoing 39th African Insurance Organisations (AIO) Conference and General Assembly going in Khartoum, Sudan, he said the issuance of the guidelines would make it possible for interested insurance companies to offer profit-free insurance services to policyholders across the country.

“By July, our guidelines for takaful will be ready.  So anytime from August and September, we should have a platform to do takaful, we will be in a position to issue license to people to do takaful insurance not as a window.

 “So before end of September, we should be in a position to issue out licenses for takaful.  So we are ready,” Daniel assured

“It is not about religion really. It is about a way of sharing risks and not transferring risks.  Takaful is a kind of community risk sharing, it is fantastic, people will take it.  It does not matter whether they are Christians or Moslems,” the commissioner added.

He   explained that contrary to what obtains currently in the market where a few operators have approval to open a window to sell takaful products, the commission was desirous of ensuring that platforms are created for full fledged non-profit insurance services in the country.

“We have window operation for takaful which is offered to Niger Insurance, Cornerstone Insurance and African Alliance Insurance but you have proper takaful through a window.  Takaful is not a product, it is a concept.

On the readiness of the commission to introduce this innovation in the market, the commissioner said: “We have a programme for takaful.  Right now we are collaborating with United National Conference on Trade and Development (UNCTAD), Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), International Labour Organisation (ILO) to do a diagnostic study of micro-insurance including takaful and agricultural insurance. The study is meant to last for six months and they would soon send in their report.  That is part of our preparation.”

“On takaful to be specific, we done more than a diagnostic study, we did studies here and there, India, Malaysia and we will be going to another country next month,” he added.

Justifying the introduction of takaful insurance, Daniel stated optimism that this would create another opportunity for more Nigerians to embrace insurance and help operators increase the level of insurance penetration in the country which currently stands at less than 6 per cent.

“The reason we are looking at takaful very seriously now is that the insurance gap in our domain is endemic.  It is for the masses and we still do not have a problem here but we will find a way out.  One of the ways out and in short a quick win is takaful”

“We think this is the quickest thing we can to rebuild insurance gap in our domain.  So for us, we have gone along with the project, it is an offshoot of the Market Development Restructuring and Development Initiative (MDRI),” Daniel said.

Tags: Business, Featured, Nigeria, Fola Daniel, NAICOM

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