The Capital Market Authority (CMA) has issued the long-awaited regulation for takaful insurance in the sultanate, effective from December 23, 2019.
In a press statement issued by the CMA on Tuesday, the executive president H E Sheikh Abdullah Salim al Salmi said that the issuance of the takaful regulation means finalisation of the legislative framework for takaful products and companies operating in this field.
He added that the new phase of the insurance market is characterised by new takaful products featuring a mature market, diversified products and wider insurance options for individuals and institutions. The CMA’s decision has specified a six months time for the companies to adjust their situation as from the date the regulation coming into force.
H E Salmi also said that the CMA will establish the Supreme Sharia’a Supervisory Committee for takaful sector to be constituted by the board of directors of the CMA. “Such a supreme supervisory committee shall have the powers required to practice its functions. The regulation also obligates all the companies to constitute their own sharia’a supervisory committees. Also, any differences between a company’s sharia’a supervisory committee and its board of directors shall be referred to the Supreme Sharia’a Supervisory Committee of the CMA,” he said.
The regulation also obliges takaful companies to appoint external Sharia’a supervisors to perform Sharia’a supervision for each financial year to ensure all activities are sound. As per the 2018 audited financial indicators, the share of takaful insurance premiums (RO53.6mn) reached to 12 per cent of gross direct premiums in the sultanate, H E Salmi noted.
The CMA had previously licensed two companies – Takaful Oman and Al Madina Takaful – to carry out takaful business in the country, which reflects the desire of a wide segment of the population to get Sharia’a-compliant insurance products.
H E Salmi further said that the new regulation has been issued in response to the growth of takaful companies, which started operations four years ago to meet the requirements of individuals, institutions and Islamic banking entities. The provisions of the regulation provide adequate protection for all parties especially takaful policyholders and enhance the confidence in the market.
H E Salmi said that the nature of the takaful business relies on the segregation of funds of policyholders which is known as the participants fund from the account of the company which is managing the fund.
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