THE first ever Islamic re-insurance is expected to be launched this year as the Kenya Reinsurance Corporation ventures into Sharia-compliant business. After the successful launch of Takaful Insurance of Africa , the first fully Sharia-compliant insurance company in Kenya , in January 2011 , time is now ripe for the launch of Islamic re-insurance. The Capital Markets Authority says in its new master plan that since Kenya Re has presence in West Africa and Middle East markets, the listed Kenyan company has the potential to provide a regional platform for this product. "The market for Islamic financial services is still nascent in Kenya ," says the 10-year master plan published yesterday. "However, given the country's geographical position, sizeable Muslim population, and infrastructure funding needs, there is great potential to develop a centre of excellence in Islamic financial products in the country and for the region. The Central Bank of Kenya has to date licensed two Islamic banks, Gulf African Bank and with various other banks offering Sharia-compliant services and products through Islamic windows. First Community Bank has been authorised to act as an Islamic insurance ( Takaful ) broker for general Takaful products. The master plan has proposed for the creation of a regulatory framework for Islamic capital markets focusing on corporate governance, disclosures, a policyholder compensation fund and responsible pricing. The CMA has in addition proposed the development of a separate policy, legislative and regulatory framework for Islamic products and services covering Islamic financial institutions, financial regulators, Islamic groups and the Ministry of Finance . This policy will run parallel to the conventional Act. "As the policymaker for the financial sector, the National Treasury should take the lead on this initiative as part of a concrete financial sector strategy to acknowledge that Kenya will become a hub for Islamic finance services," the plan says in part.
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