In accordance with the government’s financial inclusion agenda, which translated into the recent development of Islamic banking and finance in the country, the Tanzania Insurance Regulatory Authority is working on a new framework aimed at accommodating Takaful and bancaTakaful products by the end of the year. MARC ROUSSOT reports.
Having an interest in offering Takaful products since the idea of permitting Shariah compliant coverage was first mentioned, Zanzibar Insurance Corporation has been working on a Takaful plan for more than five years and intends to be ready once the Tanzania Insurance Regulatory Authority issues its Takaful regulation later this year, in a bid to meet a growing demand from the public for Islamic insurance.
“A Shariah committee has already been set up with meetings organized on a regular basis,” shares Said Basleym, the head of the Marketing Department at Zanzibar Insurance Corporation, adding that 98% of the population living in Zanzibar are Muslims while more than 30% of the whole country’s population are Muslims.
Zanzibar Insurance Corporation is one of the companies consulted by the commissioner during the development of the draft regulatory framework, which mandates insurance companies to establish a separate structure to offer Takaful products.
“We advised on changing this particular point in order to ease the process of introducing Islamic insurance in the country. However, it remains uncertain if changes have been made following our suggestions,” details Said.
Zanzibar Insurance Corporation, which plans to offer life Takaful to begin with, followed by bancaTakaful at a later date, believes that within the five years following the introduction of the Islamic insurance regulation, 50% of its activity will come from the provision of Shariah compliant insurance.
Accommodating Takaful has been in the pipeline for at least the past five years and the project grabbed the headlines a few times since 2013 in the Tanzanian press. In 2015, Israel Kamuzora, the then commissioner for insurance, even stated that Shariah compliant insurance products were to be allowed by the end of the year.
“The initiation of new products in the market needs broad consultations among insurance stakeholders, market players, financial institutions and the government. Thus, the authority could not afford to rush onto a wrong footing. So, the delays could be attributed to avoiding quagmires that would have otherwise resulted in the failure of the product,” explains Dr Baghayo Saqware, the commissioner of the Tanzania Insurance Regulatory Authority.