NAICOM issues guidelines on Takaful Insurance

 The Nation Insurance Commission (NAICOM) has released the guidelines on Takaful Insurance which it said is in line with the provisions of the 1997 Insurance Act, and the need to complement the current drive for Financial Inclusion to increase insurance penetration in Nigeria.

A circular signed by Ibrahim Hassan, deputy commissioner for Insurance (Technical) NAICOM, noted that with the guidelines, all intending applicants seeking license from the Commission to transact Takaful-insurance business in Nigeria must possess the followings: Certificate of Registration as a full-fledge Takaful-insurance company in accordance with international best practice, adding that such a company must have, as part of its name, words or terminologies that connote Takaful operations.

Inspenonline reports that such a company must maintain a minimum deposit in a non-interest financial institution at all times and that the provision for the establishment of an Advisory Council of Experts (ACE) must be made in the articles of the Company and there should be establishment of investment policy for the participants’ Risk Fund.

Takaful means ‘joint guarantee’ or ‘shared responsibility’ in Arabic, it operates in according to Islamic laws, the products are designed to carter for muslims and non-muslims. The products are meant to encourage savings culture and build capital, over a period of time to meet personal or business needs.

Under takaful plan, people can save regularly for a fixed period that is convenient for them. The accumulated targeted amount can be used to fund obligations such as purchase of land, house, marriage or Hajj. It could also be used to meet other long term financial objectives, such as retirement, children education, travelling expenses as well as expected commitment