The National Insurance Commission (NAICOM) has issued two sets of guidelines for the (re)takaful sector, including the ‘Market Conduct Guideline for Takaful and Retakaful Insurance Operators’ and ‘Enterprise Risk Management Framework for Takaful and Retakaful Operators in Nigeria’.
The main objective of the market conduct guideline is to set out minimum standards required of takaful operators in their dealings with participants/policyholders, shareholders and other stakeholders and to promote greater fairness and transparency. Another goal of this guideline is to establish strong market conduct and business practices in the Islamic insurance sector, enhance mutual confidence for market efficiency and set out the general licensing and authorisation requirements for takaful operators and intermediaries.
Under this guideline, in claims settlement, the commission said, “When a takaful insurance operator makes an offer of settlement, the takaful insurance operator shall disclose to the participant or claimant the basis used in arriving at the offer of settlement”.
In addition, a takaful provider shall not settle a claim for less than the amount which the participant or claimant would be entitled to receive under the terms of the takaful contract.
Part of the guideline states that after acceptance of liability and an agreement has been reached between the takaful operator and the participant or claimant on the amount of a claim, the takaful operator shall issue a discharge voucher not later than five working days from the date of acceptance of liability.
NAICOM said that the ‘Enterprise Risk Management Framework for Takaful and Retakaful Operators in Nigeria’ is intended to establish minimum risk management standards for takaful insurance operators (TIOs) in Nigeria.
“This guideline discusses how management of risks inherent in a TIO shall be implemented, as a TIO is exposed to risks that may affect its ability to achieve its objectives or even its continuing existence.
“This guideline has been designed to articulate principles that may be applied to a variety of circumstances and does not prescribe specific quantitative standards. This is for practical reasons; differences in the environments in which different TIOs operate, as well as differences in their operational frameworks, meaning that a detailed prescription that might be calibrated to suit one entity would not necessarily be suitable for others,” it said. M