The Muslim Public Affairs Centre (MPAC) has called on the National Insurance Commission (NAICOM) to reverse its recent directive banning coinsurance arrangements between Takaful operators and conventional insurance companies.
In a statement issued on Tuesday by its Executive Chairman, Disu Kamor, MPAC expressed serious concern that the policy announced on August 19 could hinder the growth of ethical insurance and financial inclusion in Nigeria.
The directive, which prohibits collaboration between Takaful (Islamic insurance) providers and conventional insurers, has sparked criticism from stakeholders who argue it could further marginalize the nascent Takaful sector.
“Instead of enabling partnerships that could promote market growth, NAICOM’s ban threatens to isolate Takaful and entrench its peripheral status,” Kamor said.
MPAC cited examples from countries such as Malaysia, Saudi Arabia, the UAE, Indonesia, and Pakistan, where collaboration between Islamic and conventional insurers has supported innovation, expanded market access, and improved financial inclusion.
“In Malaysia, the Takaful industry thrived in its early stages by working with conventional insurers. That model of phased integration is something Nigeria can learn from,” Kamor added.
The organization warned that the real impact of the ban would be felt by consumers, particularly Muslims and ethically minded individuals who rely on Takaful options but depend on the broader infrastructure of the conventional insurance industry.
With Nigeria’s insurance penetration still below 2% of GDP, MPAC argued that restricting coinsurance could worsen access to insurance products, especially for under served populations.
The group outlined several benefits of allowing coinsurance between Takaful and conventional insurers, including increased market access, enhanced consumer choice, improved product innovation, healthy competition, and the sharing of resources and expertise.
While acknowledging NAICOM’s responsibility to uphold the integrity of Takaful, MPAC urged the commission to adopt a regulatory rather than prohibitive approach.
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It called for the development of a clear framework that ensures Shariah compliance, transparency, and sound risk management in coinsurance agreements.
MPAC also pointed to the precedent set by the Central Bank of Nigeria (CBN), which permits collaboration between Islamic and conventional banks, a model that has helped Islamic banking grow without compromising regulatory standards.
To promote an inclusive insurance landscape, the group recommended the development of Shariah-compliant guidelines for coinsurance arrangements, implementation of robust oversight and risk management systems, assurance of transparency and full disclosure in collaborative agreements, and regular monitoring and auditing to ensure consumer protection and compliance
MPAC concluded its statement with a direct appeal to NAICOM to reconsider the August 19 directive, stressing its far-reaching implications for financial inclusion, industry development, and Nigeria’s broader economic objectives.
