Nigeria: Regulator to ban co-insurance between takaful and conventional insurers wef 1 Jan 2026
Source: Middle East Insurance Review | Oct 2025
The National Insurance Commission (NAICOM) has issued a circular that will ban co-insurance arrangements between takaful companies and conventional insurers with effect from 1 January 2026.
The circular, titled “Prohibition of Coinsurance Arrangements Between Takaful Companies and Conventional Insurance Companies”, said that following a review of current market practices and in alignment with the principles underpinning takaful operations, there is a need to establish clear regulatory boundaries between takaful and conventional insurance businesses.
The circular added, “This decision is driven by the imperative to uphold the integrity of takaful as a Shariah-compliant financial model, ensure financial soundness within the sector, and mitigate potential systemic risks that may arise from operational entanglements with conventional insurers. Most importantly, the Commission must halt practices that could erode public confidence and cause reputational harm to takaful operators in Nigeria.
NAICOM made the following points:
- A takaful operator shall not engage in any coinsurance arrangement that is based on conventional insurance principles with a conventional insurer. Similarly, a conventional insurer shall not participate in any coinsurance arrangement that is based on takaful principles with a takaful operator.
- For the avoidance of doubt, this directive does not extend to retakaful arrangements with conventional reinsurance companies, which may continue pending the development of adequate retakaful capacity in the Nigerian insurance market. M