The legislative framework for takaful business in Oman products has been completed with the issuance of the Takaful Regulation, the executive president of the Capital Market Authority Sheikh Abdullah Salim Al Salmi has said.
The regulation specifies six months for takaful operators to adjust their position from 23 December 2019, the date the regulation entered into force.
Mr Al Salmi said that the legislation was in response to the growth of takaful in Oman.
The Takaful Regulation enhances confidence in the market through regulating the agency contract, board of directors, company management, senior management and their relationship as well as regulating takaful contracts.
Mr Al Salmi added that the Takaful Regulation contains a chapter showing the segregation process between the participants’ account and the account of insurance policyholders. It prohibits combining assets and obligations of the shareholders’ funds and participants’ funds.
He said the regulation obliges the CMA to establish a Supreme Committee for Shariah Supervision for Takaful to be constituted by the board of directors of the CMA, specifying its terms of reference and terms and conditions for the members and their remuneration. The supreme Shariah supervisor shall have the powers required to practise its functions.
He added the regulation obligates all takaful operators to form their respective Shariah supervisory committees and that differences between the Shariah supervisory committee and the board of directors of the company shall be referred to the Supreme Shariah Committee of the CMA, which has the final say.
The regulation also obliges the takaful company to appoint a Shariah external supervisor to perform Shariah supervision each financial year to ensure all activities are sound, and specifies the functions of the external Sharia supervisor.
Mr Al Salmi also said that the audited financial indicators for the year 2018 shows that the share of takaful has reached 12% of gross direct premiums at OMR53.6m ($130.2m). Since 2014, the CMA has licensed two companies to carry out takaful business.