News Column

Call for Law On Islamic Insurance

July 31, 2014

THE government has been advised to look into the possibility of enacting a law to regulate establishment and operations of Islamic insurance, also known as Takaful, in the country.

The Commissioner of Insurance, Mr Israel Kamuzora, said this in Dar es Salaam recently when briefing the Minister of State in the President's Office (Special Duties) on the activities of the Tanzania Insurance Regulatory Authority (TIRA).

He said the proposed law would provide guidelines in establishment and operations of insurers providing services that are in compliance with Shariah - Takaful.

Takaful is a co-operative system of reimbursement in case of loss, paid to people and companies concerned about hazards, compensated out of a fund to which they agree to donate small regular contributions managed on behalf by a Takaful Operator.

It is defined as an Islamic insurance concept which is grounded in Islamic muamalat (Islamic banking), observing the rules and regulations of Islamic law.

Takaful is practised in some countries, global but yet to take root in Africa, although a handful of African nations including Kenya have adopted the system.

In Tanzania, however, several banks including the National Bank of Commerce (NBC), Amana Bank, People's Bank of Zanzibar (PBZ) and KBC Bank offer Shariah compliant services.

The Minister for Finance, Ms Saada Mkuya Salum, last month encouraged more local banks to provide Shariah compliant banking services to attract more Muslim customers.

The service is in line with the clear guidelines Shariah lays down for the management of money, one of these guidelines being the absence of interest on current and savings accounts. The Shariah Law forbids the earning of interest.

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Source: AllAfrica

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