The Guidelines for Takaful Insurance in Nigeria are overdue for review and reform to make the industry more effective and robust, according to Mr Abdullah Abdulrasaq, a lecturer in the Department of Islamic Banking, Insurance & Finance at the Islamic Finance College, Ilorin Kwara State.
In a recent interview on WebTV's Islamic Finance Weekly Programme, he said that an improved regulatory environment is critical for the growth of takaful in Nigeria.
He noted that the National Insurance Commission (NAICOM), the key regulator of the insurance industry, is yet to review its guidelines for takaful, according to a report in ProShare.
Takaful operations in Nigeria began in 2004 when African Alliance Insurance introduced Islamic insurance services to the public in addition to conventional insurance services. In 2013, NAICOM launched the “2013 Takaful Insurance Operational Guidelines”. This serves as the first national guidelines for takaful operations in the country, providing the legal basis and reference for all matters concerning Islamic insurance.
Looking at the opportunities in Islamic insurance, he identified the agriculture sector as a key driver of economic activities in the country, and thus there is the need to ensure there are insurance products for the sector.
"There should be a concept for Islamic microfinance for agriculture as an alternative funding platform." he said.
He added that the agricultural sector needs major attention from the Islamic insurance segment so that farmers will be helped.
Another opportunity is the need for takaful education and training. Mr Abdulrasaq indicated that there are fewer than 10 professors of Islamic insurance in Nigeria. This academic area of study lacks deeper scholarly learning and contributions. Islamic insurance and Islamic banking in Nigeria are still poorly understood and operated.
He also decried the relatively small number of Islamic finance teaching institutions in Nigeria.
"The preliminary level of Islamic finance education should be focused on the syllabus and curriculum, changing it to suit what the country needs."