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Takaful Insurance Market
in The Sultanate of Oman Presented by: Nasar Ahmed Al-SalhiDirector of Valuation and Risk Management Department
IIFM Awareness Seminar on Islamic FinanceWednesday, 11th September 2019, Muscat Hall, Bank Muscat Head Office, Seeb, Sultanate of Oman
1. Takaful Market in Oman
2. Key Features of Takaful Regulations
3. Key Element to promote the Islamic Finance Industry
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Takaful Market in Oman
• There are two (02) Takaful Companies operating in the Sultanate of
Oman with eighteen (18) Conventional Insurers and one (01)
Conventional Reinsurer.
1. Al Madina Takaful started Takaful operation in
January 2014 after its transformation from
Conventional Insurer to Takaful Operator.
2. Takaful Oman established as a new Takaful operator,
got licensed and started its operations in April 2014.
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Takaful Market in Oman
8.50% 8.80%17.10%
2016 2017 2018
Total Growth in Contribution
42,064,710 45,761,70153,584,444
2016 2017 2018 ‘
Total Contribution
2016 2017 2018
Total Conventional Market GWP 411,710,425 406,634,533 413,084,432
Total Takaful Contribution 42,064,710 45,761,701 53,584,444
Takaful Market Share 9.30% 10.10% 11.48%
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Key Features of Takaful Regulations
- Comprehensive Licensing Requirements;
- Putting various disclosure requirements in the Takaful Policy Documents;
- Obligation on Takaful Operators while determination and structuring its fees including Wakala
Fees and Modarib Share;
- Determination and distribution of Surplus to the Participants;
- Solvency regime applicable on both the Company aggregate level and separately for
Participants Fund as well;
- Provision for Qard-e-Hasan in case of Cash Deficit and Accounting Deficit in the Takaful
Participants Fund;
- Sharia Compliance Framework by introducing requirements of establishing Sharia Supervisory
Committee and appointment of Sharia Compliance Officer and External Sharia Audit;
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Key Features of Takaful Regulations
- Supreme Sharia Supervisory Committee to be established by the CMA;
- Fit and Proper Criteria for CEO, Senior Management and Key Officers;
- Compulsory Actuarial Valuation for Family Takaful Business;
- Re-Takaful Arrangements;
- Training and Awareness of Concept and Operational Aspects of
Takaful.
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Key Element to promote the Islamic Finance Industry
Some steps need to be taken by the regulators to promote and develop the Islamic Financial
Industry by making some compulsions under the laws and regulations.
In Progress by CMA
RETAKAFUL: As per the Takaful Regulation which is under approval withthe Ministry of Legal Affairs, the Takaful Operator shall not be able to cedeits risks to conventional insurers rather than only to the Retakaful operator.The only relaxation shall be given to them unless it has been satisfied to itsShariah Supervisory Committee and the CMA that the Takaful CoverageCapacity is not available worldwide as per the need to the Oman’s Market.
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Suggestions:
IFI’s ASSETS:
•All the assets of the Islamic Financial
Institutions should be covered through
Takaful Operator rather than through
conventional insurers.
RISKS OF SHARIAH COMPLIANT CORPORATE ENTITIES:
•All the assets of the Shariah Compliant
Corporate Entities should be covered
through Takaful Operator rather than
through conventional insurers.
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Suggestions:
IFI’s TO PROMOTE TAKAFUL:
•All the Islamic Financial Institutions should
promote Takaful Business rather than
conventional insurers under through Banc-
assurance agreements.
UNDERLYING ASSETS OF SUKUKS:
•All the underlying assets of the Sukuks
should be covered through Takaful
Operator rather than through
conventional insurers.
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