Diversification of Islamic Financial Insturments
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(in contrast with the Islamic banking sector where the regulations allow non-Islamic banks to
own and operate Islamic ‘windows’). These combined capital-centered and market regulatory
provisions aim to create a level playing field for Oman’s fledgling takaful industry which, like in
other GCC markets, faces the challenge of an established and fiercely-competitive conventional
insurance industry.
The CMA has power to suspend issuance of new licenses at any time if it is of the opinion that
the market is saturated and may, at any time, withdraw a license for breach of a condition. The
regulator could to intervene in the management of a takaful insurer in certain circumstances,
by conducting administrative investigations, requiring the company actuary or another
actuary to report on the financial standing of the company, appointing a non-voting auditor to
the board or dissolving the board and appointing a committee to run the company until a new
board is constituted. Moreover, Shariah committee with a minimum of three members
including Fiqh specialists in financial transactions and a takaful expert is obligatory by statue.
Other provisions govern the maintenance of solvency margins, fund set-up and management
and the transfer of takaful business from one company to another.
This latest regulatory development in the sector is expected to raise awareness and fuel
consumer appetite for takaful insurance as well as other faith-based products and services.
Industry analysts predict significant growth potential for takaful insurance in Oman due to the
low current rate of insurance penetration (1.1%). The global takaful market led by Saudi
Arabia and GCC (63%) and Malaysia and Indonesia (30%) has maintained double-digit growth
since 2011 and is forecast to be worth $20bn by 2017 (ICD, 2016).